SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
__________________________________

SCHEDULE 13E-3

Amendment No. 4

RULE 13E-3 TRANSACTION STATEMENT
(Pursuant to Section 13(e) of the Securities Exchange Act of 1934 and
Rule 13e-3 ((S)240.13e-3) thereunder)

Petroleum Heat and Power Co., Inc.
(Name of Issuer)

Petroleum Heat and Power Co., Inc.
Star Gas Partners, L.P.
Star Gas Corporation
(Name(s) of Person(s) Filing Statement)

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

Class A Common Stock, par value $.10 per share
(Title of Class of Securities)

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

716600 309
(Cusip Number of Class of Securities)

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

Joseph P. Cavanaugh                   Irik P. Sevin
President                             Chairman of the Board and
Star Gas Corporation                   Chief Executive Officer
2187 Atlantic Street                  Petroleum Heat and Power Co., Inc.
P.O. Box 120011                       2187 Atlantic Street
Stamford, Connecticut 06912-0011      Stamford, Connecticut  06902

(Name, Address and Telephone Number of Persons Authorized
to Receive Notices and Communications on Behalf of Person(s)
Filing Statement)

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

With Copies To:

Michael Rosenwasser, Esq.  Alan Shapiro, Esq.       R. Joel Swanson, Esq.
Andrews & Kurth, L.L.P.    Phillips Nizer Benjamin  Baker & Botts, L.L.P.
805 Third Avenue            Krim & Ballon LLP       One Shell Plaza
New York, NY 10022         666 Fifth Avenue         910 Louisiana
(212) 850-2800             New York, NY 10103-0084  Houston, TX 77002-4995
(212) 977-9700           (713) 229-1300

This statement is filed in connection with (check the appropriate box):

a.  [X]  The filing of solicitation materials or an information statement
subject to Regulation 14A, Regulation 14C or Rule 13e-3(c) under the
Securities Exchange Act of 1934.

b.  [X]  The filing of a registration statement under the Securities Act of
1933.

c.  [_]  A tender offer.

d.  [_]  None of the above.

Check the following box if the soliciting materials or information
statement referred to in checking box (a) are preliminary copies: [X]

Calculation of Filing Fee

- ------------------------------------------------------------------------------ 
Transaction Valuation*                             Amount of Filing Fee
- ------------------------------------------------------------------------------

$26,148,106.30                                       $5,230

*    Calculated by multiplying $0.9844, by 26,562,481, the sum of the number of
shares of Common Stock to be converted in the Transaction.

[X]  Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the Form
or Schedule and the date of its filing.

Amount Previously Paid:  $9,825
Form or Registration No.: Registration Statement on Form S-4; 
SEC File No. 333-66005
Filing Party:  Star Gas Partners, L.P.
Date Filed:  October 22, 1998

INTRODUCTION

This Rule 13e-3 Transaction Statement on Schedule 13E-3 (the "Schedule 13E-
3") is being filed by (1) Petroleum Heat and Power Co., Inc, a Minnesota
corporation (the "Issuer"); (2) Star Gas Partners, L.P., a Delaware limited
partnership and an indirect subsidiary of the Issuer (the "Partnership"); and
(3) Star Gas Corporation, a Delaware corporation and a wholly-owned subsidiary
of the Issuer ("Star Gas") and the general partner of the Partnership, pursuant
to Section 13(e) of the Securities Exchange Act of 1934, as amended, and Rule
13e-3 thereunder, in connection with a transaction (the "Transaction")
consisting of (a) the merger of a wholly-owned indirect subsidiary of the
Partnership ("Mergeco"), with and into the Issuer (the "Merger"), with the
Issuer surviving the Merger as an indirect wholly-owned subsidiary of the
Partnership, and the conversion of each outstanding share of Class A and Class C
common stock, par value $.10 per share of the Issuer, (the "Common Stock"), into
senior subordinated units of limited partner interest ("Senior Subordinated
Units") of the Partnership, upon the terms and subject to the conditions set
forth in a certain Amended and Restated Agreement and Plan of Merger dated as of
February 3, 1999 (the "Merger Agreement") among the Issuer, the Partnership and
Mergeco, et al., a copy of which is filed as Exhibit (c)(1) hereto; and (b) the
exchange (the "Exchange") (1) by certain holders of shares of Common Stock of
the Issuer that are affiliates of the Issuer (the "LLC Owners") with (A) Star
Gas LLC, a Delaware limited liability company, of a portion of the Common Stock
(the "LLC Shares") held by the LLC Owners for 100% of the limited liability
company interests in Star Gas LLC (which in turn will exchange the LLC Shares
with the Partnership for General Partner Units) and (B) with the Partnership, of
their remaining shares of Common Stock held by the LLC Owners, for junior
subordinated units of limited partner interest ("Junior Subordinated Units") of
the Partnership, and (2) by certain other holders of Common Stock, that are
affiliates of the Issuer with the Partnership, of their Common Stock for Senior
Subordinated Units, upon the terms and subject to the conditions set forth in a
certain exchange agreement dated October 17, 1998, as amended (the "Exchange
Agreement") among the Issuer, the Partnership, the LLC Owners and the other
affiliated holders of Common Stock referred to above, a copy of which is filed
as Exhibit (c) (2) hereto.

The following Cross Reference Sheet, prepared pursuant to General
Instruction F to Schedule 13E-3, shows the location in the joint proxy statement
and prospectus of the Partnership (the "Proxy Statement"), included in the
registration statement on Form S-4 (the "S-4") filed by the Partnership with the
Securities and Exchange Commission on the date hereof, of the information
required to be included in this Schedule 13E-3.  The information set forth in
the S-4, including all exhibits thereto and the Annual Report on Form 10-K of
the Issuer for its fiscal year ended December 31, 1997 (the "Petro 10-K"), the
Proxy Statement of the Issuer for its 1998 annual meeting of shareholders (the
"Petro Annual Meeting Proxy Statement") and the Annual Report on Form 10-K of
the Partnership for its fiscal year ended September 30, 1998 (the "Partnership
10-K") are hereby expressly incorporated herein by reference as set forth in the
Cross Reference Sheet and the responses in this Schedule 13E-3, and such
responses are qualified in their entirety by reference to the information
contained in the Proxy Statement, the

2

annexes thereto, the Petro 10-K, the Petro Annual Meeting Proxy Statement and
the Partnership 10-K which are incorporated by reference in and/or accompany the
Proxy Statement.

The information contained in this Schedule 13E-3 concerning the Issuer,
including, without limitation, the information concerning the background of the
Transaction, the deliberations of the Issuer's Board of Directors in connection
with the Transaction, the opinion of the Issuer's financial advisor and the
Issuer's capital structure and historical financial statements of the Issuer,
was supplied by the Issuer.  The Partnership and Star Gas take no responsibility
for the accuracy or completeness of such information.

The information contained in this Schedule 13E-3 concerning the
Partnership, including, without limitation, the information concerning the
background of the Transaction, the opinion of the financial advisor to the
special committee (the "Special Committee") of the board of directors of Star
Gas, the Partnership's capital structure and historical financial statements of
the Partnership, was supplied by Star Gas, on behalf of the Partnership.  Petro
takes no responsibility for the accuracy or completeness of such information.

3

CROSS REFERENCE SHEET

Item in                                            Where Located in
Schedule 13E-3                                     Proxy Statement
- --------------                                     ----------------

Item 1(a).............................  Cover Page, "Summary - Parties - 
Petro" and "Parties  - Petro"

Item 1(b).............................  Cover Page, "Proxy Solicitations - The
Petro Special Meeting - Petro Record
Date," "Proxy Solicitations - The Petro
Special Meeting - Voting Rights; Vote
Required" and "Proxy Solicitations - The
Petro Special Meeting - Voting Rights of
Holders of Petro Preferred Stock"

Items 1(c) and (d)....................  "Comparative Security Price and
Distribution Information - Petro Capital
Stock - Class A Common Stock,"
"Comparison of Securities -
Distributions and Dividends" and
"Incorporation of Certain Documents by
Reference"

Item 1(e).............................  *

Item 1(f).............................  *

Items 2(a) - (d) and (g)..............  Cover Page, "Summary - Parties," 
"Parties," "Management of Star Gas
Partners After the Transaction -
Officers and Employees of Star Gas
Propane and Petro," "Beneficial
Ownership of Principal Unitholders and
Management" and "Incorporation of
Certain Documents by Reference"

Items 2(e) and (f)....................  *

Items 3(a) and (b)....................  "Summary - The Transaction," "Summary -
The Transaction - The Merger," 
"The Transaction - Description of the
Transaction," "The Transaction -

4

Description of the Merger and the 
Exchange," "Special Factors - 
Background of the Transaction,"
"Management of Star Gas Partners 
After the Transaction" and
"Incorporation of Certain Documents by
Reference"

Item 4(a) and (b).....................  Cover Page, "Summary - The Transaction,"
"Summary - The Transaction - The
Merger," "The Transaction - Description
of the Transaction," "The Transaction -
Description of the Merger and the
Exchange" and "The Transaction -
Description of the Merger Agreement"

Items 5(a) - (g)......................  "Summary - The Transaction," "Summary -
The Transaction - The Merger," 
"Summary - The Transaction - Star Gas
Partners Current Organization," 
"Summary - Transaction - Star Gas
Partners Organization Immediately
Following Transaction," "The 
Transaction - Description of the
Transaction," "The Transaction -
Description of the Merger and the
Exchange" "The Transaction - Related
Financing and Refinancing Transactions,"
"The Transaction - Description of the
Merger Agreement," "Management of Star
Gas Partners After the Transaction -
General Partner," and "Management of
Star Gas Partners After the 
Transaction - Board of Directors of Star
Gas LLC"

Item 6(a).............................  "Summary - The Transaction - Raising the
Money to Pay Down Petro's Debt and
Redeem Petro's Preferred Stock,"
"Summary - Financial Information -
Estimated Sources and Uses of Funds of
the Equity Offering and Debt Offering"
"The Transaction - Related Financing and
Refinancing Transactions" and
"Description of Indebtedness - New
Indebtedness - Petro Notes"

Item 6(b).............................  "Summary - Financial Information -
Estimated Sources and Uses of Funds of
the Equity Offering and Debt Offering,"
"Proxy Solicitations - The Star Gas
Partners Unitholders Meeting - Cost of
Solicitation of Proxies," "Proxy
Solicitation - The Petro Special Meeting -
Cost of Solicitation of Proxies,"
"Special Factors - Opinion of A.G.
Edwards - Terms of A.G. Edwards'
Engagement," "Special Factors - Opinion
of Dain Rauscher Wessels - Dain Rauscher
Wessels' Engagement Agreement" and "The
Transaction - Description of the Merger
Agreement - Expenses"

Item 6(c).............................  "Summary - The Transaction - Raising the
Money to Pay Down Petro's Debt and
Redeem Petro's Preferred Stock"

5

Transaction - Related Financing and
Refinancing Transactions" and
"Description of Indebtedness - New
Indebtedness - Petro Notes"

Item 6(d)...........................  *

Item 7(a)...........................  "Summary - Special Factors - Potential
Advantages to Petro's Common
Stockholders," "Summary - Special 
Factors - Recommendations of Petro Board
of Directors and Opinion of Dain
Rauscher Wessels," "Summary - 
Description of Star Gas Partners Units
After Amendment of the Partnership
Agreement" "Special Factors - Background
of the Transaction," "Special Factors -
Reasons for the Transaction that the
Petro Board Considered; Recommendation
of the Petro Board," "Cash Available for
Distribution" and "Description of the
Star Gas Partners Units"

Items 7(b) and (c)..................  "Summary - The Transaction" and "The
Transaction - Background of the
Transaction"

Item 7(d)...........................  "Summary - Parties - Relationship of the
Parties," "Summary - The Transaction -
Star Gas Partners Current Organization,"
"Summary - The Transaction - Star Gas
Partners Organization Immediately
Following Transaction," "Summary-Special
Factors - Potential Advantages to Petro's
Common Stockholders," "Summary - Special
Factors - Potential Disadvantages and
Risks to Petro's Common Stockholders,"
"Summary - Financial Information -Summary
Selected Unaudited Pro Forma Condensed
Consolidated Financial Information,"
"Risk Factors - Risks to Petro Common
Stockholders," "Risk Factors - Tax Risks
to Petro Common Stockholders," "Risk
Factors - Risks to Star Gas Partners
Common Unitholders -Conflicts of
Interest Were Present in Negotiating and
Structuring the Transaction," "Risk
Factors - Risks to Petro Common
Stockholders - Conflicts Were Present in
Structuring and Negotiating the
Transaction," "Special Factors - Reasons
for the Transaction that the Petro Board
Considered; Recommendation of the Petro
Board,"

6

"Management of Star Gas Partners After
the Transaction," "The Amended and
Restated Partnership Agreement,"
"Cash Distribution Policy," "Cash
Available for Distribution,"
"Description of the Units,"
"Comparison of Securities" and "Federal
Income Tax Considerations"

Items 8(a) - (e)......................  Cover Page, "Summary - Special Factors -
Recommendations of Petro Board of
Directors and Opinion of Dain Rauscher
Wessels," "Risk Factors - Risks to Star
Gas Partners Common Unitholders -
Conflicts of Interest Were Present in
Negotiating and Structuring Negotiating
Transaction," "Risk Factors - Risks to
Petro Common Stockholders - Conflicts
Were Present in Structuring and
Negotiating the Transaction," "Proxy
Solicitations - The Petro Special
Meeting -Petro Board Recommendation,"
"Proxy Solicitations - The Petro Special
Meeting -Voting Rights; Vote Required,"
"Special Factors -Background of the
Transaction," "Special Factors - Reasons
for the Transaction that the Petro Board
Considered; Recommendation of the Petro
Board" and "Special Factors - Opinion of
Dain Rauscher Wessels"

Item 8(f).............................  *

Items 9(a) - (c)......................  "Summary - Special Factors -
Recommendation of Petro Board of
Directors and Opinion of Dain Rauscher
Wessels," "Special Factors - Background
of the Transaction - Petro Retains Dain
Rauscher Wessels to Provide a Fairness
Opinion to Petro's Public Common
Stockholders" and "Special Factors -
Opinion of Dain Rauscher Wessels"

Items 10(a)...........................  "Proxy Solicitations - The Petro Special
Meeting - Voting Rights; Vote Required"

Item 10(b)............................  *

Item 11...............................  "Summary - Parties - Relationship of the
Parties," "Summary - The Transaction,"

7

"Summary - The Transaction - The
Merger," "Summary - The Transaction -
Raising the Money to Pay Down Petro's
Debt and Redeem Petro's Preferred
Stock," "The Transaction -Description of
the Transaction," "The Transaction -
Description of the Merger and the
Exchange," "The Transaction -Related
Financing and Refinancing Transactions,"
"Risk Factors - Risks to Star Gas
Partners Common Unitholders -Conflicts
of Interest Were Present in Negotiating
and Structuring the Transaction," "Risk
Factors - Risks to Petro Common
Stockholders - Conflicts Were Present in
Structuring and Negotiating the
Transaction," and "Description of
Indebtedness - New Indebtedness - Petro
Notes"

Items 12(a) and (b)...................  "Summary - Special Factors -
Recommendation of Petro Board of
Directors and Opinion of Dain Rauscher
Wessels," "Proxy Solicitations - The
Petro Special Meeting - Petro Board
Recommendation," "Proxy Solicitations -
The Petro Special Meeting - Voting
Rights; Vote Required" and "Special
Factors -Reasons for the Transaction
that the Petro Board Considered;
Recommendation of the Petro Board"

Item 13(a)............................  "Proxy Solicitations - The Petro Special
Meeting - Dissenters' Rights,"
"Dissenters' Rights," and Annex F to the
Proxy Statement

Item 13(b)............................  *

Item 13(c)............................  *

Item 14(a) and (b)....................  "Summary - Financial Information -
Summary Selected Historical Financial
and Operating Data of Petro," "Summary -
Financial Information - Summary Selected
Unaudited Pro Forma Condensed
Consolidated Financial Information,"
"Comparative Security Price and
Distribution Information - Comparative
Per Share/Per Unit Information
(Unaudited)," "Unaudited Pro Forma
Condensed Consolidated Financial
Information" and "Incorporation of
Certain Documents by Reference"

Item 14(b)............................  *

Item 15(a)............................  "Summary - The Transaction," "Summary -
The Transaction - 

8

Raising the Money to Pay Down Petro's
Debt and Redeem Petro's Preferred
Stock," "Summary - Financial Information-
Estimated Sources and Uses of Funds of
the Equity Offering and Debt Offering,"
"Proxy Solicitations - The Star Gas
Partners Unitholders Meeting - Cost of
Solicitation of Proxies," "Proxy
Solicitations - The Petro Special
Meeting - Cost of Solicitation of
Proxies," "The Transaction - Related
Financing and Refinancing Transactions -
Equity Offering and Debt Offering" "The
Transaction - Description of the Merger
Agreement - Expenses" and "Description
of Indebtedness - New Indebtedness -
Petro Notes"

Item 15(b)............................  "Proxy Solicitations - The Star Gas
Partners Unitholders Meeting - Cost of
Solicitation of Proxies," "Proxy
Solicitations - The Petro Special
Meeting - Cost of Solicitation of
Proxies," "Special Factors - Opinion of
A.G. Edwards - Terms of A.G. Edwards'
Engagement" and "Special Factors -
Opinion of Dain Rauscher Wessels - Dain
Rauscher Wessels' Engagement Agreement"

Item 16...............................  The Proxy Statement in its entirety

Item 17...............................  *

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

* The Item is located in the Schedule 13E-3 only.

9

ITEM 1.  ISSUER AND CLASS OF SECURITY SUBJECT TO THE TRANSACTION.

(a) The relevant information set forth in the Proxy Statement on the cover
page thereof and under "Summary - Parties - Petro" and "Parties - Petro" is
incorporated herein by reference.

(b) The information set forth in the Proxy Statement on the cover page
thereof and under "Proxy Solicitations - The Petro Special Meeting - Petro
Record Date," "Proxy Solicitations - The Petro Special Meeting - Voting Rights;
Vote Required" and "Proxy Solicitations - The Petro Special Meeting - Voting
Rights of Holders of Petro Preferred Stock" is incorporated herein by reference.

(c)  and (d)  The relevant information set forth in the Proxy Statement
under "Comparative Security Price and Distribution Information - Petro Capital
Stock - Class A Common Stock," "Comparison of Securities - Distributions and
Dividends" and "Incorporation of Certain Documents by Reference" is incorporated
herein by reference. The information set forth in Item 5, Part II of the Petro
10-K under the heading "Market for Registrant's Common Equity and Related
Stockholder Matters" is incorporated herein by reference.

(e) On December 22, 1997, the Partnership offered, in an underwritten
public offering registered under the Securities Act, 832,727 of its common units
representing limited partner interests (the "Common Units"), at an offering
price to the public of $21.25 per Common Unit.  809,000 of such Common Units
were offered by the Partnership and 23,727 of such Common Units were offered by
Star Gas as the selling unitholder.  The Partnership received net proceeds of
$16,244,720 for 809,000 Common Units sold by the Partnership, and Star Gas
received net proceeds of $2,966.358 for 87,000 Common Units sold by Star Gas
(including 62,273 Common Units sold by Star Gas pursuant to the over-allotment
option to purchase an additional 124,000 Common Units granted to the
underwriters, which was exercised in part on January 7, 1998).

(f) Not Applicable.

ITEM 2.  IDENTITY AND BACKGROUND.

(a)-(d) and (g) This Statement is being filed by the Issuer, the
Partnership and Star Gas. The information set forth on the cover page thereof
and under "Summary - Parties," "Parties," - "Management of Star Gas Partners
After the Transaction - Officers and Employees of Star Gas Propane and Petro"
and "Beneficial Ownership of Principal Unitholders and Management" and
information appearing under Item 10 of the Petro 10-K and under "Election of
Directors" and "Executive Officers" in the Petro Annual Meeting Proxy Statement
and information appearing under Item 10 of the Partnership 10-K, which
information is incorporated by reference in the Proxy Statement under
"Incorporation of Certain Documents by Reference" and is incorporated herein by
reference.

10

(e) and (f)  During the last five years, none of (i) the Issuer, the
Partnership or Star Gas or, (ii) to the best knowledge of the Issuer, the
Partnership and Star Gas, any person who is a director or executive officer of
the Issuer, the Partnership or Star Gas has been (i) convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors) or (ii) a
party to a civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject to a judgment,
decree or final order enjoining future violations of, or prohibiting activities
subject to, federal or state securities laws or finding any violation of such
laws.  The Partnership and the Operating Partnership do not have any officers,
directors or employees.

ITEM 3.  PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS.

(a) and (b) The relevant information set forth in the Proxy Statement under
"Summary - The Transaction," "Summary - The Transaction - The Merger," "The
Transaction - Description of the Transaction," "The Transaction - Description of
the Merger and the Exchange," "Special Factors - Background of the Transaction"
and "Management of Star Gas Partners After the Transaction" and information
appearing under Item 13 of the Petro 10-K and under "Election of Directors -
Certain Transactions" in the Petro Annual Meeting Proxy Statement and
information appearing in Note 16 (Related Party Transactions) to the
Consolidated Financial Statements of the Partnership and its subsidiary included
in the Partnership 10-K, which information is incorporated by reference in the
Proxy Statement under "Incorporation of Certain Documents" and is incorporated
herein by reference.

ITEM 4.  TERMS OF THE TRANSACTION.

(a) and (b) The information set forth in the Proxy Statement on the cover
page thereof and under "Summary - The Transaction," " Summary - The 
Transaction - The Merger," "The Transaction - Description of the Transaction,"
"The Transaction - Description of the Merger and the Exchange" and "The
Transaction - Description of the Merger Agreement" is incorporated herein by
reference.

ITEM 5.  PLANS OR PROPOSALS OF THE ISSUER OR AFFILIATE.

(a)-(g) The information set forth in the Proxy Statement under "Summary -
The Transaction," "Summary - The Transaction - The Merger," "Summary - The
Transaction - Star Gas Partners Current Organization," "Summary - Transaction -
Star Gas Partners Organization Immediately Following Transaction," "The
Transaction - Description of the Transaction," "The Transaction - Description of
the Merger and the Exchange" "The Transaction - Related Financing and
Refinancing Transactions," "The Transaction - Description of the Merger
Agreement," "Management of Star Gas Partners After the Transaction - General
Partner," and "Management of Star Gas Partners After the Transaction - Board of
Directors of Star Gas LLC" is incorporated herein by reference.

11

ITEM 6.  SOURCE AND AMOUNTS OF FUNDS OR OTHER CONSIDERATION.

(a) The information set forth in the Proxy Statement under "Summary -The
Transaction - Raising the Money to Pay Down Petro's Debt and Redeem Petro's
Preferred Stock," "Summary - Financial Information - Estimated Sources and Uses
of Funds of the Equity Offering and Debt Offering," "The Transaction - Related
Financing and Refinancing Transactions" and "Description of Indebtedness - New
Indebtedness - Petro Notes" is incorporated herein by reference.

(b) The information set forth in the Proxy Statement under "Summary -
Financial Information - Estimated Sources and Uses of Funds of the Equity
Offering and Debt Offering," "Proxy Solicitations - The Star Gas Partners
Unitholders Meeting -Cost of Solicitation of Proxies," "Proxy Solicitations -
The Petro Special Meeting -Cost of Solicitation of Proxies," "Special Factors -
Opinion of A.G. Edwards -Terms of A.G. Edwards' Engagement," "Special Factors -
Opinion of Dain Rauscher Wessels - Dain Rauscher Wessels' Engagement Agreement"
and "The Transaction -Description of the Merger Agreement - Expenses" is
incorporated herein by reference.

(c) The information set forth in the Proxy Statement under "Summary -
Transaction - Raising the Money to Pay Down Petro's Debt and Redeem Petro's
Preferred Stock," "The Transaction - Related Financing and Refinancing
Transactions" and "Description of Indebtedness - New Indebtedness - Petro Notes"
is incorporated herein by reference.

(d) Not applicable.

ITEM 7.  PURPOSE(S), ALTERNATIVES, REASONS AND EFFECTS.

(a) The information set forth in the Proxy Statement under "Summary -
Special Factors - Potential Advantages to Petro's Common Stockholders," 
"Summary -Special Factors - Recommendations of Petro Board of Directors and
Opinion of Dain Rauscher Wessels," "Summary - Description of Star Gas Partners
Units After Amendment of the Partnership Agreement," "Special Factors -
Background of the Transaction," "Special Factors - Reasons for the Transaction
that the Petro Board Considered; Recommendation of the Petro Board," "Cash
Available for Distribution" and "Description of the Star Gas Partners Units" is
incorporated herein by reference.

(b) and (c) The information set forth in the Proxy Statement under 
"Summary - The Transaction" and "Special Factors - Background of the
Transaction" is incorporated herein by reference.

(d) The information set forth in the Proxy Statement "Summary - Parties -
Relationship of the Parties," "Summary - The Transaction - Star Gas Partners
Current Organization" "Summary - The Transaction - Star Gas Partners
Organization Immediately Following Transaction," "Summary - Special Factors -
Potential Advantages to Petro's Common Stockholders," "Summary - Special 
Factors - Potential Disadvantages and Risks to Petro's Common Stockholders,"
"Summary -Financial Information -Summary Selected Unaudited Pro Forma Condensed
Consolidated Financial Information," "Risk Factors - Risks to Petro Common
Stockholders," "Risk Factors -Tax Risks to Petro Common Stockholders," "Risk
Factors - Risks to Star Gas Partners Common Unitholders -Conflicts of Interest
Were Present in Negotiating and Structuring the Transaction," "Risk Factors -
Risks to Petro Common Stockholders - Conflicts Were Present in Structuring and
Negotiating the Transaction,"

12

"Special Factors - Reasons for the Transaction that the Petro Board Considered;
Recommendation of the Petro Board," "Management of Star Gas Partners After the
Transaction," "The Amended and Restated Partnership Agreement," "Cash
Distribution Policy," "Cash Available for Distribution," "Description of the
Units," "Comparison of Securities" "Federal Income Tax Considerations"
and "Description of Indebtedness - Transaction Indebtedness" is incorporated
herein by reference.

ITEM 8.  FAIRNESS OF THE TRANSACTION.

(a) - (e) The information set forth in the Proxy Statement on the cover
page thereof and under "Summary - Parties - Relationship of the Parties," 
"Summary - Special Factors - Recommendation of Petro Board of Directors and
Opinion of Dain Rauscher Wessels," "Risk Factors - Risks to Star Gas Partners
Common Unitholders - Conflicts of Interest Were Present in Negotiating and
Structuring the Transaction," "Risk Factors - Risks to Petro Common 
Stockholders - Conflicts Were Present in Structuring and Negotiating the
Transaction," "Proxy Solicitations - The Petro Special Meeting - Petro Board
Recommendation," "Proxy Solicitations - The Petro Special Meeting - Voting
Rights; Vote Required" "Special Factors - Background of the Transaction,"
"Special Factors - Reason for the Transaction that the Petro Board Considered;
Recommendations of the Petro Board," and "Special Factors - Opinion of Dain
Rauscher Wessels" is incorporated herein by reference.

(f) Not applicable.

ITEM 9.  REPORTS, OPINIONS, APPRAISALS AND CERTAIN NEGOTIATIONS.

(a) - (c) The information set forth in the Proxy Statement under "Summary -
Special Factors - Recommendation of Petro Board of Directors and Opinion of Dain
Rauscher Wessels," "Special Factors - Background of the Transaction - Petro
Retains Dain Rauscher Wessels to Provide a Fairness Opinion to Petro's Public
Common Stockholders" and "Special Factors - Opinion of Dain Rauscher Wessels" is
incorporated herein by reference. The opinion of Dain Rauscher Wessels is
attached to the Proxy Statement as Annex E.

ITEM 10. INTEREST IN SECURITIES OF THE ISSUER.

(a)  The information set forth in the Proxy Statement under "Proxy 
Solicitations - The Petro Special Meeting - Voting Rights; Vote Required" and
the information set forth in the Petro Annual Meeting Proxy Statement under
"Ownership of Equity Securities" is incorporated herein by reference.

(b) Not applicable.

13

ITEM 11. CONTRACTS, ARRANGEMENTS OR UNDERSTANDINGS WITH RESPECT TO THE ISSUER'S
SECURITIES PROXY STATEMENT - SUMMARY - THE TRANSACTION.

The information set forth in the Proxy Statement under "Summary - Parties -
Relationship of the Parties," "Summary - The Transaction," "Summary - The
Transaction - The Merger," "Summary - The Transaction - Raising the Money to 
Pay Down Petro's Debt and Redeem Petro's Preferred Stock," "The Transaction -
Description of the Transaction," "The Transaction - Description of the Merger
and the Exchange," "The Transaction - Related Financing and Refinancing
Transactions," "Risk Factors - Risks to Star Gas Partners Common Unitholders -
Conflicts of Interest Were Present in Negotiating and Structuring the
Transaction," "Risk Factors - Risks to Petro Common Stockholders - Conflicts
Were Present in Structuring and Negotiating the Transaction," "Description of
Indebtedness - New Indebtedness - Petro Notes" is incorporated herein by
reference.

ITEM 12. PRESENT INTENTION AND RECOMMENDATION OF CERTAIN PERSONS WITH REGARD TO
THE TRANSACTION.

(a) and (b) The information set forth in the Proxy Statement under 
"Summary - Special Factors - Recommendation of Petro Board of Directors
and Opinion of Dain Rauscher Wessels," "Proxy Solicitations - The Petro Special
Meeting - Petro Board Recommendation," "Proxy Solicitations - The Petro Special
Meeting - Voting Rights; Vote Required" and "Special Factors - Reasons for the
Transaction that the Petro Board Considered; Recommendation of the Petro Board"
is incorporated herein by reference.

ITEM 13. OTHER PROVISIONS OF THE TRANSACTION.

(a) The information set forth in the Proxy Statement under "Proxy
Solicitations - The Petro Special Meeting - Dissenters' Rights," "Dissenters'
Rights," and Annex F to the Proxy Statement is incorporated herein by reference.

(b) Not applicable.

(c) Not applicable.

ITEM 14. FINANCIAL INFORMATION.

(a) The information set forth in the Proxy Statement under " Summary -
Financial Information - Summary Selected Historical Financial and Operating Data
of Petro," "Summary - Financial Information - Summary Selected Unaudited Pro
Forma Condensed Consolidated Financial Information," "Comparative Security Price
and Distribution Information - Comparative Per Share/Per Unit Information
(Unaudited)" and "Unaudited Pro Forma Condensed Consolidated Financial
Information" is incorporated herein by reference. The consolidated financial
statements of Petro and its subsidiaries included in the Petro 10 - K have been
incorporated by reference in the Proxy Statement under "Incorporation of Certain
Documents by Reference" are incorporated herein by reference.

14

(b) Not applicable.

ITEM 15. PERSONS AND ASSETS EMPLOYED, RETAINED OR UTILIZED.

(a) The relevant information set forth under "Summary - The Transaction,"
"Summary - The Transaction - Raising the Money to Pay Down Petro's Debt and
Redeem Petro's Preferred Stock," "Summary - Financial Information - Estimated
Sources and Uses of Funds of the Equity Offering and Debt Offering," "Proxy
Solicitations - The Star Gas Partners Unitholders Meeting - Cost of Solicitation
of Proxies," "Proxy Solicitations - The Petro Special Meeting - Cost of
Solicitation of Proxies," "The Transaction - Related Financing and Refinancing
Transactions - Equity Offering and Debt Offering" "The Transaction - Description
of the Merger Agreement - Expenses" and "Description of Indebtedness - New
Indebtedness - Petro Notes" is incorporated herein by reference.

(b) The relevant information set forth under "Proxy Solicitations - The
Star Gas Partners Unitholders Meeting - Cost of Solicitation of Proxies," "
Proxy Solicitations - The Petro Special Meeting - Cost of Solicitation of
Proxies," "Special Factors -Opinion of A.G. Edwards - Terms of A.G. Edwards'
Engagement" and "Special Factors - Opinion of Dain Rauscher Wessels - Dain
Rauscher Wessels' Engagement Agreement" is incorporated herein by reference.

ITEM 16. ADDITIONAL INFORMATION.

The information set forth in the Proxy Statement, a copy of which is filed
as Exhibit (d)(l) hereto, is incorporated herein by reference.

15

ITEM 17. MATERIAL TO BE FILED AS EXHIBITS.

(a)     Not Applicable.

(b)(1)  Opinion of Dain, Rauscher Wessels, dated October 22, 1998 (attached
as Annex E to the Proxy Statement).**

(b)(2)  Dain Rauscher Wessels' Presentation to the Issuer's Board of 
Directors.*

(b)(3)  PaineWebber Incorporated's Presentations to the Issuer's Board of 
Directors.****

(b)(4)  Opinion of A. G. Edwards, dated October 16, 1998 (attached as Annex
D to the Proxy Statement).**

(b)(5)  A. G. Edwards' Preliminary Report to Star Gas' Special Committee 
dated April 28, 1998.****

(b)(6)  A. G. Edwards' Appendices to Preliminary Report to Star Gas'
Special Committee dated April 28, 1998.****

(b)(7)  A. G. Edwards' Preliminary Status Report to the Partnership's
Board of Directors draft dated May 4, 1998.****

(b)(8)  A. G. Edwards' Round II Appendices to Preliminary Report to the
Special Committee-Analyses Performed at $2.00 per share dated
May 4, 1998.****

(b)(9)  A. G. Edwards' Round II Appendices to Preliminary Report to the
Special Committee-Analyses Performed at $2.50 per share dated
May 4, 1998.****

(b)(10) A. G. Edwards' Preliminary Status Report to the Partnership's
Board of Directors dated May 7, 1998.****

(b)(11) A. G. Edwards' Proposal to Star Gas' Special Committee draft
dated May 20, 1998.****

(b)(12) A. G. Edwards' Round III Update to Preliminary Report to Star
Gas' Special Committee dated May 21, 1998.****

(b)(13) A. G. Edwards' Round III Appendices to Preliminary Report to
Star Gas' Special Committee-Analyses Performed at $2.50 per
share plus issuances of DPUs dated May 21, 1998.****

(b)(14) A. G. Edwards' Revised Proposal to Star Gas' Special Committee
draft dated May 26, 1998.****

(b)(15) A. G. Edwards' Revised Proposal to Star Gas' Special Committee
draft dated July 28, 1998.****

(b)(16) A. G. Edwards' Fairness Opinion Presentation to Star Gas' Special
Committee dated October 16, 1998.****

(b)(17) A. G. Edwards' Appendix I to Fairness Opinion Presentation to
Star Gas' Special Committee dated October 16, 1998.****

(b)(18) A. G. Edwards' Appendix II to Fairness Opinion Presentation to
Star Gas' Special Committee dated October 16, 1998.****

(b)(19) A. G. Edwards' Fairness Opinion Presentation to Star Gas' Special 
Committee dated February 10, 1999. *

(b)(20) A. G. Edwards' Appendix I to Fairness Opinion Presentation to Star
Gas' Special Committee dated February 10, 1999. *

(b)(21) A. G. Edwards' Appendix II to Fairness Opinion Presentation to Star
Gas' Special Committee dated February 10, 1999. *

(c)(1)  Agreement and Plan of Merger dated October 22, 1998, among Issuer,
the Partnership, the Operating Partnership, and Mergeco and the
Company (attached as Annex A to the Proxy Statement).**

(c)(2)  Exchange Agreement dated October 22, 1998 among the Partnership and
certain affiliated Common Stockholders of Petro (attached as Annex
B to the Proxy Statement).**

(d)(l)  Preliminary Proxy Statement/Prospectus dated January 21, 1999.**

(d)(2)  Form of Letter of Transmittal to holders of Petro Common Stock.**

(d)(3)  Form of Notice of Special Meeting.**

(d)(4)  Press Release issued by Parent on August 14, 1998.****

(e)     Section 302A-471 and 302A-473 of the Minnesota Business Corporation
Act (attached as Annex F to the Proxy Statement).***

(f)     Not applicable.

-  -  -  -  -  -  -  - 
*    Filed herewith.

**   Incorporated by reference to the Registration Statement on Form S-4 filed
by the Issuer with the Securities and Exchange Commission on October 22,
1998.

***  Filed on October 22, 1998.

**** Filed on December 23, 1998.

16

SIGNATURES

After due inquiry and to the best of my knowledge and belief, each of the
undersigned hereby certifies that the information set forth in this statement is
true, complete and correct.

February 10, 1999

PETROLEUM HEAT AND POWER CO., INC.

By:  /s/ Irik P. Sevin
------------------------------------
Name:  Irik P. Sevin
Title: Chairman of the Board and Chief
Executive Officer

STAR GAS PARTNERS, L.P.

By:   Star Gas Corporation 
------------------------------------
its General Partner

By:  /s/ Joseph P. Cavanaugh                    
------------------------------------
Name:   Joseph P. Cavanaugh
Title:  President

STAR GAS CORPORATION

By:  /s/ Joseph P. Cavanaugh
------------------------------------
Name:   Joseph P. Cavanaugh
Title:  President

17

EXHIBIT INDEX

EXHIBIT NO.  DESCRIPTION

(a)     Not Applicable.

(b)(1)  Opinion of Dain, Rauscher Wessels, dated October 22, 1998 (attached
as Annex E to the Proxy Statement).**

(b)(2)  Dain, Rauscher Wessels' Presentation to the Issuer's Board of 
Directors.*

(b)(3)  Paine Webber Incorporated's Presentations to the Issuer's Board of 
Directors.****

(b)(4)  Opinion of A.G. Edwards, dated October 16, 1998 (attached as Annex 
D to the Proxy Statement).**

(b)(5)  A.G. Edwards' Preliminary Report to Star Gas' Special Committee 
dated April 28, 1998.****

(b)(6)  A. G. Edwards' Appendices to Preliminary Report to Star Gas'
Special Committee dated April 28, 1998.****

(b)(7)  A. G. Edwards' Preliminary Status Report to the Partnership's
Board of Directors draft dated May 4, 1998.****

(b)(8)  A. G. Edwards' Round II Appendices to Preliminary Report to the
Special Committee-Analyses Performed at $2.00 per share dated
May 4, 1998.****

(b)(9)  A. G. Edwards' Round II Appendices to Preliminary Report to the
Special Committee-Analyses Performed at $2.50 per share dated
May 4, 1998.****

(b)(10) A. G. Edwards' Preliminary Status Report to the Partnership's
Board of Directors dated May 7, 1998.****

(b)(11) A. G. Edwards' Proposal to Star Gas' Special Committee draft
dated May 20, 1998.****

(b)(12) A. G. Edwards' Round III Update to Preliminary Report to Star
Gas' Special Committee dated May 21, 1998.****

(b)(13) A. G. Edwards' Round III Appendices to Preliminary Report to
Star Gas' Special Committee-Analyses Performed at $2.50 per
share plus issuances of DPUs dated May 21, 1998.****

(b)(14) A. G. Edwards' Revised Proposal to Star Gas' Special Committee
draft dated May 26, 1998.****

(b)(15) A. G. Edwards' Revised Proposal to Star Gas' Special Committee
draft dated July 28, 1998.****

(b)(16) A. G. Edwards' Fairness Opinion Presentation to Star Gas' Special
Committee dated October 16, 1998.****

(b)(17) A. G. Edwards' Appendix I to Fairness Opinion Presentation to
Star Gas' Special Committee dated October 16, 1998.****

(b)(18) A. G. Edwards' Appendix II to Fairness Opinion Presentation to
Star Gas' Special Committee dated October 16, 1998.****

(b)(19) A.G. Edwards' Fairness Opinion Presentation to Star Gas' Special 
Committee dated February 10, 1999 .*

(b)(20) A.G. Edwards' Appendix I to Fairness Opinion Presentation to Star 
Gas' Special Committee dated February 10, 1999.*

(b)(21) A.G. Edwards' Appendix II to Fairness Opinion Presentation to Star 
Gas' Special Committee dated February 10, 1999.*

(c)(1)  Agreement and Plan of Merger dated October 22, 1998, among Issuer,
the Partnership, the Operating Partnership, and Mergeco and the
Company (attached as Annex A to the Proxy Statement).**

(c)(2)  Exchange Agreement dated October 22, 1998 among the Partnership and
certain affiliated Common Stockholders of Petro (attached as Annex
B to the Proxy Statement).**

(d)(l)  Preliminary Proxy Statement/Prospectus dated January 21, 1999.**

(d)(2)  Form of Letter of Transmittal to holders of Petro Common Stock.**

(d)(3)  Form of Notice of Special Meeting.**

(d)(4)  Press Release issued by Parent on August 14, 1998.****

(e)     Section 302A-471 and 302A-473 of the Minnesota Business Corporation
Act (attached as Annex F to the Proxy Statement).***

(f)    Not applicable.

- ----------------- 
*    Filed herewith.

**   Incorporated by reference to the Registration Statement on Form S-4 filed
by the Issuer with the Securities and Exchange Commission on October 22,
1998.

***  Filed on October 22, 1998.

**** Filed on December 23, 1998.

19

[LOGO] PETRO(TM)  Project Intense Heat

================================================================================

Transaction Summary

- --------------------------------------------------------------------------------
Dain Rauscher Wessels                                                     Page 1

[LOGO] PETRO(TM) Transaction Summary
Summary of Proposed Terms

PROJECT INTENSE HEAT
Summary of Proposed Terms
(In thousands, except as otherwise indicated)

Pro Forma Star Units       
Historical   --------------------------------------------------
Petro       Common         Sr Sub      Jr Sub          GP          
Petro Shareholders (A only)                         Common       Units          Units       Units         Units        
- -------------------------------------------       ----------   ----------    ----------   ----------   ----------     

Class A                                               10,178           --         1,197           --           --      

Petro Shareholders (excluding A only)
- -------------------------------------------      
Class A (to receive Sr Sub Units)                     11,011           --         1,295           --           --      
Class A & C (to receive Jr Sub Units)                  5,262           --            --          430          323      
Class B                                                   11           --            --           --           --      
----------   ----------    ----------   ----------   ----------     
Total Petro Shareholders (excluding A only)           16,285           --         1,295          430          323      
----------   ----------    ----------   ----------   ----------     
Total Petro Shareholders                              26,463           --         2,491          430          323      
==========   ==========    ==========   ==========   ==========  

Existing Star Public Unitholders                          --        3,859            --           --           --      

New Star Units
- -------------------------------------------     
Debt and Preferred Stock Exchange                         --          103            --           --           --      
Public Offering                                           --        8,947            --           --           --      
----------    ----------   ----------   ----------     
Pro Forma Star Units Outstanding                          --       12,909         2,491          430          323      
==========   ==========    ==========   ==========   ==========     

General Assumptions
- -------------------------------------------
Exchange Ratio (Star Unit / Petro Share)                  --           --       0.11758      0.14318      0.14318      
Star Historical MQD                                   $2.200
Star Pro Forma MQD                                    $2.300
GP Interest                                             2.0%

Pro Forma Star Units     
--------------------------------------------------      GP
Total        DPUs      Total Units Fully-Diluted  Incentive
Petro Shareholders (A only)                          Units      (Sr Sub)    (incl. DPUs)   Ownership Distributions
- -------------------------------------------       ----------   ----------    ----------    --------- -------------     

Class A                                                1,197          335         1,532         9.0%        36.9%

Petro Shareholders (excluding A only)
- -------------------------------------------       
Class A (to receive Sr Sub Units)                      1,295

363         1,657         9.7%        39.9%
Class A & C (to receive Jr Sub Units)                    753          211           965         5.7%        23.2%
Class B                                                   --           --            --           --           --
----------   ----------    ----------    --------- -------------     
Total Petro Shareholders (excluding A only)            2,048          574         2,622        15.4%        63.1%
----------   ----------    ----------    --------- -------------     
Total Petro Shareholders                               3,245          909         4,154        24.3%       100.0%
==========   ==========    ==========    ========= =============     

Existing Star Public Unitholders                       3,859           --         3,859        22.6%           --

New Star Units                                                                             
Debt and Preferred Stock Exchange                        103           --           103         0.6%           --
Public Offering                                        8,947           --         8,947        52.4%           --
----------   ----------    ----------    --------- -------------     
Pro Forma Star Units Outstanding                      16,154          909        17,063       100.0%       100.0%
==========   ==========    ==========    ========= =============     
General Assumptions                                                                        
- -------------------------------------------       
Exchange Ratio (Star Unit / Petro Share)                  --           --            --           --           --  
Star Historical MQD                                                                        
Star Pro Forma MQD                                                                        
GP Interest                                       

DPU Distribution                  Pro rata distribution of Sr Sub Units based
upon Petro pro forma ownership of total Star
Units issued to Petro. Up to 303,000 DPUs can
be earned each year if Petro provides $0.50
per Unit accretion to Star, up to a maximum of
909,000 DPUs.

GP Incentive Distributions        Pro rata distribution based upon Petro pro 
forma ownership of total Star Units issued to
Petro. 

Petro Debt & Preferred Exchange   Petro will issue to holders of certain
Petro debt and preferred stock 3.37 shares of
Petro Junior Convertible Preferred Stock for
each $1,000 in principal or liquidation value.
Each share of Petro Junior Convertible
Preferred Stock will be exchangeable into 0.13
Star Common Units.

- --------------------------------------------------------------------------------
Dain Rauscher Wessels                                                     Page 2

[LOGO] PETRO(TM) Project Intense Heat

================================================================================

Pro Forma Analysis

- --------------------------------------------------------------------------------
Dain Rauscher Wessels                                                     Page 3

[LOGO] PETRO(TM) Pro Forma Analysis
Petro Summary Historical Financial Data

================================================================================

PETROLEUM HEAT AND POWER CO., INC.
Summary Historical Financial Data
(In thousands, except as otherwise indicated)

At or For the Year Ended December 31,        
---------------------------------------------------    
INCOME STATEMENT DATA                                         1993          1994          1995          1996      
- ----------------------------------------------------       ---------     ---------     ---------     ---------     

Net Sales                                                  $ 538,526     $ 546,677     $ 609,507     $ 608,161    
Gross Profit (after direct delivery expense)                 141,815       150,701       185,048       147,671    
EBITDA (excluding SGU Distributions) (1)                      48,436        55,387        56,753        42,070    
EBITDA (including SGU Distributions) (1)                      48,436        55,387        56,753        46,383    
EBIT                                                          13,772        22,992        17,710        12,125    
Net Income (Loss) before Extraordinary Items                  (7,564)       (3,611)      (22,043)      (21,901)   
Net Income (Loss)                                             (8,431)       (4,265)      (23,479)      (28,315)   
Net Income (Loss) to Common                                  (11,798)       (7,776)      (26,742)      (30,704)   
Cash Flow (Loss) to Common                                    25,971        28,905        16,028         8,764    
Less: Maintenance Capex (2)                                    3,000         3,000         3,000         3,000    
Free Cash Flow (Loss)                                         22,971        25,905        13,028         5,764    

PER SHARE DATA
- ---------------------------------------------------- 
Earnings (Loss) per Share before Extraordinary Items          ($0.50)       ($0.33)       ($1.00)       ($0.95)   
Earnings (Loss) per Share                                     ($0.54)       ($0.36)       ($1.06)       ($1.20)   
Cash Flow (Loss) per Share                                     $1.19         $1.32         $0.63         $0.34    
Free Cash Flow (Loss) per Share                                $1.06         $1.18         $0.51         $0.23    
Dividends Paid per Share                                       $0.53         $0.55         $0.60         $0.60    
Weighted Average Shares Outstanding                           21,755        21,897        25,324        25,593    

BALANCE SHEET DATA
- ---------------------------------------------------- 
Working Capital (Deficit)                                  $  16,694     $  28,345     $  65,408     $  18,093    
Total Assets                                                 256,589       397,174       357,241       275,025    
Total Debt (including short-term)                            213,344       315,562       341,430       316,384    
Preferred Stock (including current maturities)                25,000        20,834        16,667        12,500    
Total Stockholders' Equity (Deficiency)                      (61,964)      (66,176)     (100,903)     (145,733)   
Total Capitalization                                         176,380       270,220       257,194       183,151    

FINANCIAL RATIO DATA
- ----------------------------------------------------
Interest Expense                                           $  22,156     $  25,282     $  41,084     $  34,669    
EBITDA to Interest Expense                                                                                        
EBITDA (including SGU Distributions) to Interest Expense       2.2 x         2.2 x         1.4 x         1.3 x    
Total Debt to EBITDA                                           4.4 x         5.7 x         6.0 x         7.5 x    
Total Debt to EBITDA (including SGU Distributions)             4.4 x         5.7 x         6.0 x         6.8 x    
Total Debt to Total Capitalization                             121.0%        116.8%        132.8%        172.7%   
Total Debt & Preferred to Total Capitalization                 135.1%        124.5%        139.2%        179.6%   

At or For the Year Ended December 31, 1997               
-----------------------------------------------------------------    
INCOME STATEMENT DATA                                          Q1            Q2            Q3            Q4          Total      
- ----------------------------------------------------       ---------     ---------     ---------     ---------     ---------    

Net Sales                                                  $ 248,095     $  87,972     $  50,788     $ 161,286     $ 548,141    
Gross Profit (after direct delivery expense)                  72,443        17,793         4,161        43,990       138,387    
EBITDA (excluding SGU Distributions) (1)                      47,147        (6,945)      (20,908)       16,716        36,010    
EBITDA (including SGU Distributions) (1)                      48,524        (5,568)      (19,532)       18,093        41,517    
EBIT                                                          39,796       (14,380)      (28,362)        9,210         6,264    
Net Income (Loss) before Extraordinary Items                  33,388       (27,454)      (40,316)       11,483       (22,899)   
Net Income (Loss)                                             33,388       (27,454)      (40,316)       11,483       (22,899)   
Net Income (Loss) to Common                                   32,492       (28,375)      (42,177)       10,517       (27,543)   
Cash Flow (Loss) to Common                                    39,328       (17,035)      (30,400)        7,000        (1,107)   
Less: Maintenance Capex (2)                                      750           750           750           750         3,000    
Free Cash Flow (Loss)                                         38,578       (17,785)      (31,150)        6,250        (4,107)   

PER SHARE DATA
- ---------------------------------------------------- 
Earnings (Loss) per Share before Extraordinary Items           $1.26        ($1.09)       ($1.61)        $0.40        ($1.06)   
Earnings (Loss) per Share                                      $1.26        ($1.09)       ($1.61)        $0.40        ($1.06)   
Cash Flow (Loss) per Share                                     $1.53        ($0.66)       ($1.16)        $0.27        ($0.04)   
Free Cash Flow (Loss) per Share                                $1.50        ($0.69)       ($1.19)        $0.24        ($0.16)   
Dividends Paid per Share                                       $0.08         $0.08         $0.08         $0.08         $0.30    
Weighted Average Shares Outstanding                           25,759        25,935        26,147        26,359        26,050    

BALANCE SHEET DATA
- ---------------------------------------------------- 
Working Capital (Deficit)                                  $  78,544     $  54,179     $   5,414     $  12,436     $  12,436    
Total Assets                                                 296,338       259,761       223,918       247,846       247,846    
Total Debt (including short-term)                            297,888       291,654       291,472       294,348       294,348    
Preferred Stock (including current maturities)                42,500        42,500        38,334        36,656        36,656    
Total Stockholders' Equity (Deficiency)                     (116,158)     (145,848)     (189,361)     (177,033)     (177,033)   
Total Capitalization                                         224,230       188,306       140,445       153,971       153,971    

FINANCIAL RATIO DATA
- ----------------------------------------------------
Interest Expense                                           $   8,805     $   8,344     $   8,432     $   8,232     $  33,813    
EBITDA to Interest Expense                                                                               2.2 x         2.2 x    
EBITDA (including SGU Distributions) to Interest Expense          --            --            --            --         1.2 x    
Total Debt to EBITDA                                              --            --            --            --         8.2 x    
Total Debt to EBITDA (including SGU Distributions)                --            --            --            --         7.1 x    
Total Debt to Total Capitalization                             132.8%        154.9%        207.5%        191.2%        191.2%   
Total Debt & Preferred to Total Capitalization                 151.8%        177.5%        234.8%        215.0%        215.0%   

LTM                        
Fiscal 1998                    Ended             
-------------------------------------     Sept. 30,          
INCOME STATEMENT DATA                                         Q1            Q2            Q3          1998             
- ----------------------------------------------------      ---------     ---------     ---------     ---------          

Net Sales                                                 $ 183,139     $  66,227     $  42,113     $ 452,765          
Gross Profit (after direct delivery expense)                 63,483        14,081         4,997       126,551          
EBITDA (excluding SGU Distributions) (1)                     40,733        (6,355)      (16,165)       34,929          
EBITDA (including SGU Distributions) (1)                     42,154        (4,934)      (14,744)       40,569          
EBIT                                                         33,318       (13,432)      (23,113)        5,983          
Net Income (Loss) before Extraordinary Items                 26,978       (22,974)      (34,215)      (18,728)         
Net Income (Loss)                                            26,978       (22,974)      (34,215)      (18,728)         
Net Income (Loss) to Common                                  25,415       (23,939)      (35,777)      (23,784)        
Cash Flow (Loss) to Common                                   32,165       (12,857)      (24,504)        1,804         
Less: Maintenance Capex (2)                                     750           750           750         3,000         
Free Cash Flow (Loss)                                        31,415       (13,607)      (25,254)       (1,196)        

PER SHARE DATA                                                                                                        
- ----------------------------------------------------                                                                  
Earnings (Loss) per Share before Extraordinary Items          $0.96        ($0.90)       ($1.35)       ($0.90)        
Earnings (Loss) per Share                                     $0.96        ($0.90)       ($1.35)       ($0.90)        
Cash Flow (Loss) per Share                                    $1.21        ($0.48)       ($0.92)        $0.07         
Free Cash Flow (Loss) per Share                               $1.18        ($0.51)       ($0.95)       ($0.05)        
Dividends Paid per Share                                      $0.00         $0.00         $0.00          0.08         
Weighted Average Shares Outstanding                          26,564        26,571        26,574        26,517         

BALANCE SHEET DATA                                                                                                    
- ----------------------------------------------------                                                                  
Working Capital (Deficit)                                 $  40,653     $  23,139       ($7,479)      ($7,479)         
Total Assets                                                248,777       229,120       198,678       198,678          
Total Debt (including short-term)                           287,010       286,978       286,885       286,885          
Preferred Stock (including current maturities)               36,819        36,854        32,722        32,722          
Total Stockholders' Equity (Deficiency)                    (151,137)     (175,066)     (209,618)     (209,618)         
Total Capitalization                                        172,692       148,766       109,989       109,989          

FINANCIAL RATIO DATA                                                                                                   
- ----------------------------------------------------                                                                   
Interest Expense                                          $   8,275     $   8,210     $   8,320     $  33,037          
EBITDA to Interest Expense                                       --            --            --         1.1 x          
EBITDA (including SGU Distributions) to Interest Expense         --            --            --         1.2 x          
Total Debt to EBITDA                                             --            --            --         8.2 x          
Total Debt to EBITDA (including SGU Distributions)               --            --            --         7.1 x          
Total Debt to Total Capitalization                            166.2%        192.9%        260.8%        260.8%         
Total Debt & Preferred to Total Capitalization                187.5%        217.7%        290.6%        290.6%         

- ----------------
(1) EBITDA excludes non-recurring expenses.
(2) Petro provided estimate for maintenance capital expenditures.

- --------------------------------------------------------------------------------
Dain Rauscher Wessels                                                     Page 4

[LOGO] PETRO(TM) Pro Forma Analysis
Star Gas Summary Historical Financial Data

================================================================================

STAR GAS PARTNERS, L.P.
Summary Historical Financial Data
(In thousands, except as otherwise indicated)

At or For the Year Ended September 30, 1997            
---------------------------------------------------    
INCOME STATEMENT DATA                                         1993          1994          1995          1996      
- ----------------------------------------------------       ---------     ---------     ---------     ---------     

Sales                                                       $143,216      $128,040      $104,550      $119,634     
Gross Profit (after delivery and branch expense)              23,103        27,957        19,668        26,327     
EBITDA                                                                                               
EBIT                                                          19,437        21,946        13,541        19,870     
Net Income (Loss)                                            (30,313)        8,907         3,468        10,062     
Limited Partners' Interest in Net Income (Loss)              (47,049)       (1,404)       (6,169)        2,593     
Cash Flow (Loss)                                                   
Maintenance Capex                                              4,271        11,966         5,626        13,083     
Distributable Cash Flow (Loss)                                 4,688         5,419         7,988         5,332     
(417)        6,547        (2,362)        7,751     
PER UNIT DATA                                                                                                      
Net Income (Loss) per Unit                                                                                         
Cash Flow (Loss) per Unit                                                                                          
Distributable Cash Flow (Loss) per Unit                                                                            
Cash Distributions per Unit                                                                              $1.17(1)  
Weighted Avg. Limited Partner Units Outstanding                                                                    

BALANCE SHEET DATA
Working Capital (Deficit)                                                 $  1,976         ($486)     $  7,546     
Total Assets                                                               147,608       155,393       156,913     
Total Debt (including short-term)                                           74,929         2,137        87,350     
Cumulative Redeemable Preferred Stock                                        8,264         8,625             
Total Partners' Capital                                                     44,328        44,305        61,398     
Total Capitalization                                                       127,521        55,067       148,748     

FINANCIAL RATIO DATA
Interest Expense                                            $16,479        $10,497        $8,549        $7,124     
EBITDA to Interest Expense                                    1.2 x          2.1 x         1.6 x         2.8 x     
Total Debt to EBITDA                                                         3.4 x         0.2 x         4.4 x     
Total Debt to Total Capitalization                                           58.8%          3.9%         58.7%     

At or For the Year Ended September 30, 1997            
-----------------------------------------------------------------   
INCOME STATEMENT DATA                                          Q1            Q2            Q3            Q4          Total     
- ----------------------------------------------------       ---------     ---------     ---------     ---------     ---------   

Sales                                                        $50,876       $46,442       $20,078       $17,763      $135,159 
Gross Profit (after delivery and branch expense)              12,001        12,019         1,744           757        26,521 
EBITDA                                                                                                                       
EBIT                                                          10,402         9,725           253          (677)       19,703 
Net Income (Loss)                                              7,816         7,095        (2,400)       (3,213)        9,298 
Limited Partners' Interest in Net Income (Loss)                5,892         5,325        (4,143)       (5,062)        2,012 
Cash Flow (Loss)                                               5,774         5,218        (4,060)       (4,960)        1,972 
Maintenance Capex                                              8,650         8,049        (1,245)       (2,430)       13,024 
Distributable Cash Flow (Loss)                                 2,517         1,271           666           825         5,279 
6,133         6,778        (1,911)       (3,255)        7,745 
PER UNIT DATA                                                                                                                
Net Income (Loss) per Unit                                     $1.10         $0.99        ($0.77)       ($0.94)        $0.37   
Cash Flow (Loss) per Unit                                      $1.61         $1.50        ($0.23)       ($0.45)        $2.42   
Distributable Cash Flow (Loss) per Unit                        $1.14         $1.26        ($0.36)       ($0.61)        $1.44   
Cash Distributions per Unit                                    $0.55         $0.55         $0.55         $0.55         $2.20   
Weighted Avg. Limited Partner Units Outstanding                5,271         5,271         5,271         5,271         5,271   

BALANCE SHEET DATA                                                                                                           
Working Capital (Deficit)                                   $ 12,428      $ 14,583      $  9,684      $  3,319      $  3,319   
Total Assets                                                 168,485       158,678       153,767       147,469       147,469   
Total Debt (including short-term)                             91,850        85,000        85,000        85,000        85,000   
Cumulative Redeemable Preferred Stock                             --            --            --            --            -- 
Total Partners' Capital                                       64,332        66,699        59,598        51,578        51,578   
Total Capitalization                                         156,182       151,699       144,598       136,578       136,578   

FINANCIAL RATIO DATA                                                                                                           
Interest Expense                                              $1,848        $1,771        $1,671        $1,676        $6,966   
EBITDA to Interest Expense                                        --            --            --            --         2.8 x 
Total Debt to EBITDA                                              --            --            --            --         4.3 x 
Total Debt to Total Capitalization                             58.8%         56.0%         58.8%         62.2%         62.2%   

AT OR FOR THE YEAR ENDED SEPTEMBER 30, 1999
-------------------------------------------------------------        
INCOME STATEMENT DATA                                         Q1            Q2            Q3         Q4         1998             
- ----------------------------------------------------      ---------     ---------     ---------   ---------   ---------     

Sales                                                       $41,844       $37,884       $16,243     $15,714    $111,685        
Gross Profit (after delivery and branch expense)             10,041        12,736         1,187       1,007      24,971        
EBITDA                                                        8,672        11,287          (415)       (638)     18,906      
EBIT                                                          5,847         8,381        (3,328)     (3,632)      7,268             
Net Income (Loss)                                             3,707         6,363        (5,235)     (5,790)       (955)            
Limited Partners' Interest in Net Income (Loss)               3,633         6,236        (5,130)     (5,675)       (936)            
Cash Flow (Loss)                                              6,690         9,421        (2,179)     (2,739)     11,193             
Maintenance Capex                                             2,085           943           797       1,190       5,015             
Distributable Cash Flow (Loss)                                4,605         8,478        (2,976)     (3,929)      6,178             

PER UNIT DATA                                          
- ----------------------------------------------------  
Net Income (Loss) per Unit                                    $0.66         $1.00        ($0.82)     ($0.91)     ($0.16)        
Cash Flow (Loss) per Unit                                     $1.20         $1.48        ($0.34)     ($0.43)      $1.82         
Distributable Cash Flow (Loss) per Unit                       $0.82         $1.33        ($0.47)     ($0.62)      $1.00         
Cash Distributions per Unit                                   $0.55         $0.55         $0.55       $0.55       $2.20         
Weighted Avg. Limited Partner Units Outstanding               5,474         6,228         6,228       6,210       6,035         

BALANCE SHEET DATA                                                                                                           
- ----------------------------------------------------  
Working Capital (Deficit)                                  $ 10,475      $ 14,841      $  4,242    $     35   $     35       
Total Assets                                                179,451       178,308       173,265     179,607    179,607       
Total Debt (including short-term)                            96,000        96,000        96,950     109,770    109,770       
Cumulative Redeemable Preferred Stock                            --            --            --          --         --       
Total Partners' Capital                                      71,883        74,751        66,020      57,347     57,347       
Total Capitalization                                        167,883       170,751       162,970     167,117    167,117       

FINANCIAL RATIO DATA                                                                                                         
- ----------------------------------------------------  
Interest Expense                                             $2,086        $1,875        $1,873      $2,093     $7,927       
EBITDA to Interest Expense                                       --            --            --          --      2.4 x       
Total Debt to EBITDA                                             --            --            --          --      5.8 x       
Total Debt to Total Capitalization                            57.2%         56.2%         59.5%       65.7%      65.7%       

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

Note:  Financial  data prior to December  20, 1995  reflects  operations  of the
Predecessor Company.

(1)    Includes two quarters of distributions and a pro rata distribution of
$0.0725 per Unit for the period December 20, 1995 to December 31, 1995.

- --------------------------------------------------------------------------------
Dain Rauscher Wessels                                                     Page 5

[LOGO] Petro(TM) Pro Forma Analysis 
Pro Forma Unit Coverage Analysis

================================================================================

PROJECT INTENSE HEAT
Pro Forma Unit Coverage Analysis
(In thousands, except as otherwise indicated)

Projected for the Year Ending September 30,            
---------------------------------------------------------------------------
15 Year Weather Case                         
----------------------------------------------------------------
Estimated  Normalized Estimated  Normalized                                  
Pro Forma EBITDA                                         1998E      1998E      1999E      1999E      2000E      2001E      2002E    
- ---------------------------------------------          ---------  ---------- ---------  ---------- ---------  ---------  ---------  

Star                                                    $18,906    $22,316    $20,093    $22,674    $23,749    $25,182    $26,615   
Petro                                                    30,612     44,749     43,613     45,013     47,551     50,924     54,081   
Synergies                                                   500        500        500        500        500        500        500   
---------  ---------- ---------  ---------- ---------  ---------  ---------  
Pro Forma EBITDA                                        $50,018    $67,565    $64,206    $68,187    $71,800    $76,606    $81,196   

Distributable Cash Flow
- ---------------------------------------------
Pro Forma EBITDA                                        $50,018    $67,565    $64,206    $68,187    $71,800    $76,606    $81,196   
Interest Expense                                        (23,465)   (24,036)   (24,139)   (24,139)   (24,869)   (26,226)   (27,588)  
Maintenance Capex                                        (6,125)    (6,110)    (6,194)    (6,194)    (6,313)    (6,434)    (6,558)  
Other                                                      (525)      (525)      (525)      (525)      (525)      (525)      (525)  
---------  ---------- ---------  ---------- ---------  ---------  ---------  
Distributable Cash Flow                                 $19,903    $36,894    $33,348    $37,329    $40,093    $43,421    $46,525   

Weighted Average Units Outstanding
- ---------------------------------------------    
Common Units                                             12,909     12,909     13,319     13,319     14,044     14,646     15,202   
Senior Subordinated Units (incl. DPUs)                    2,491      2,491      2,491      2,491      2,491      2,491      2,491   
Junior Subordinated & General Partner Units                 753        753        753        753        753        753        753   
---------  ---------- ---------  ---------- ---------  ---------  ---------  
Total Weighted Average Units Outstanding                 16,154     16,154     16,564     16,564     17,289     17,891     18,447   

Distributable Cash Flow per Unit
- ---------------------------------------------      
Common Units                                              $1.54      $2.86      $2.50      $2.80      $2.85      $2.96      $3.06   
Senior Subordinated Units (incl. DPUs)                    $1.29      $2.40      $2.11      $2.36      $2.42      $2.53      $2.63   
Junior Subordinated & General Partner Units               $1.23      $2.28      $2.01      $2.25      $2.32      $2.43      $2.52   
---------  ---------- ---------  ---------- ---------  ---------  ---------  
Total Units Outstanding                                   $1.23      $2.28      $2.01      $2.25      $2.32      $2.43      $2.52   

Distributions per Unit
- ---------------------------------------------  
MQD per Unit                                              $2.30      $2.30      $2.30      $2.30      $2.30      $2.30      $2.30   
Indicated Distribution per Unit                           $2.30      $2.30      $2.30      $2.30      $2.32      $2.40      $2.40   

MQD Coverage per Unit
- ---------------------------------------------   
Common Units                                             0.67 x     1.24 x     1.09 x     1.22 x     1.24 x     1.29 x     1.33 x   
Common and Senior Subordinated Units 
(incl. DPUs)                                            0.56 x     1.04 x     0.92 x     1.03 x     1.05 x     1.10 x     1.14 x   
---------  ---------- ---------  ---------- ---------  ---------  ---------  
Total Units                                              0.54 x     0.99 x     0.88 x     0.98 x     1.01 x     1.06 x     1.10 x   

Indicated Distribution Coverage per Unit
- ---------------------------------------------
Common Units                                             0.67 x     1.24 x     1.09 x     1.22 x     1.23 x     1.24 x     1.28 x   
Common and Senior Subordinated Units 
(incl. DPUs)                                            0.56 x     1.04 x     0.92 x     1.03 x     1.05 x     1.06 x     1.10 x   
---------  ---------- ---------  ---------- ---------  ---------  ---------  
Total Units                                              0.54 x     0.99 x     0.88 x     0.98 x     1.00 x     1.01 x     1.05 x   

Projected for the Year Ending September 30,
--------------------------------------------------------------------------
30 Year Weather Case
---------------------------------------------------------------
Estimated  Normalized Estimated  Normalized
Pro Forma EBITDA                                          1998E      1998E      1999E      1999E      2000E      2001E      2002E
- ---------------------------------------------           ---------  ---------- ---------  ---------- ---------  ---------  --------

Star                                                     $18,906    $23,722    $20,734    $24,106    $25,260    $26,797    $28,335
Petro                                                     30,612     46,900     44,298     47,215     50,369     54,883     59,097
Synergies                                                    500        500        500        500        500        500        500
---------  ---------- ---------  ---------- ---------  ---------  --------
Pro Forma EBITDA                                         $50,018    $71,122    $65,532    $71,821    $76,129    $82,180    $87,932

Distributable Cash Flow
- ---------------------------------------------
Pro Forma EBITDA                                         $50,018    $71,122    $65,532    $71,821    $76,129    $82,180    $87,932
Interest Expense                                         (23,465)   (24,036)   (24,672)   (24,672)   (26,122)   (27,845)   (29,557)
Maintenance Capex                                         (6,125)    (6,110)    (6,273)    (6,273)    (6,393)    (6,516)    (6,641)
Other                                                       (525)      (525)      (525)      (525)      (625)      (675)      (725)
---------  ---------- ---------  ---------- ---------  ---------  --------
Distributable Cash Flow                                  $19,903    $40,451    $34,062    $40,351    $42,989    $47,144    $51,009

Weighted Average Units Outstanding
- ---------------------------------------------    
Common Units                                              12,909     12,909     12,951     12,951     13,270     13,816     14,366
Senior Subordinated Units (incl. DPUs)                     2,491      2,491      2,491      2,491      2,794      3,097      3,400
Junior Subordinated & General Partner Units                  753        753        753        753        753        753        753
---------  ---------- ---------  ---------- ---------  ---------  --------
Total Weighted Average Units Outstanding                  16,154     16,154     16,196     16,196     16,818     17,667     18,520

Distributable Cash Flow per Unit
- ---------------------------------------------      
Common Units                                               $1.54      $3.13      $2.63      $3.12      $3.24      $3.41      $3.55
Senior Subordinated Units (incl. DPUs)                     $1.29      $2.63      $2.21      $2.61      $2.68      $2.79      $2.87
Junior Subordinated & General Partner Units                $1.23      $2.50      $2.10      $2.49      $2.56      $2.67      $2.75
---------  ---------- ---------  ---------- ---------  ---------  --------
Total Units Outstanding                                    $1.23      $2.50      $2.10      $2.49      $2.56      $2.67      $2.75

Distributions per Unit
- ---------------------------------------------  
MQD per Unit                                               $2.30      $2.30      $2.30      $2.30      $2.30      $2.30      $2.30
Indicated Distribution per Unit                            $2.30      $2.30      $2.30      $2.30      $2.50      $2.63      $2.70

MQD Coverage per Unit
- ---------------------------------------------   
Common Units                                              0.67 x     1.36 x     1.14 x     1.35 x     1.41 x     1.48 x     1.54 x
Common and Senior Subordinated Units 
(incl. DPUs)                                              0.56 x     1.14 x     0.96 x     1.14 x     1.16 x     1.21 x     1.25 x
---------  ---------- ---------  ---------- ---------  ---------  --------
Total Units                                               0.54 x     1.09 x     0.91 x     1.08 x     1.11 x     1.16 x     1.20 x

Indicated Distribution Coverage per Unit
- ---------------------------------------------
Common Units                                              0.67 x     1.36 x     1.14 x     1.35 x     1.30 x     1.30 x     1.32 x
Common and Senior Subordinated Units 
(incl. DPUs)                                             0.56 x     1.14 x     0.96 x     1.14 x     1.07 x     1.06 x     1.06 x
---------  ---------- ---------  ---------- ---------  ---------  --------
Total Units                                               0.54 x     1.09 x     0.91 x     1.08 x     1.02 x     1.01 x     1.02 x

- --------------------------------------------------------------------------------
Dain Rauscher Wessels                                                     Page 6

[LOGO] Petro(TM) Pro Forma Analysis 
Pro Forma Credit Analysis

================================================================================

PROJECT INTENSE HEAT
Pro Forma Credit Analysis
(In thousands, except as otherwise indicated)

Projected for the Year Ending September 30,                     
--------------------------------------------------------------------------    
15 Year Weather Case                        
-------------------------------------------------------------    
Estimated    Estimated    Normalized                                          
Pro Forma EBITDA                          1998E        1999E        1999E        2000E        2001E        2002E      
- ---------------------------------       ---------    ---------    ----------   ---------    ---------    ---------

Star                                     $18,906      $20,093      $22,674      $23,749      $25,182      $26,615     
Petro                                     30,612       43,613       45,013       47,551       50,924       54,081     
Synergies                                    500          500          500          500          500          500     
---------    ---------    ----------   ---------    ---------    ---------
Pro Forma EBITDA                         $50,018      $64,206      $68,187      $71,800      $76,606      $81,196     

Distributable Cash Flow
- ---------------------------------
Pro Forma EBITDA                         $50,018      $64,206      $68,187      $71,800      $76,606      $81,196     
Interest Expense                         (23,465)     (24,139)     (24,139)     (24,869)     (26,226)     (27,588)    
Maintenance Capex                         (6,125)      (6,194)      (6,194)      (6,313)      (6,434)      (6,558)    
Other                                       (525)        (525)        (525)        (525)        (525)        (525)    
---------    ---------    ----------   ---------    ---------    ---------
Distributable Cash Flow                  $19,903      $33,348      $37,329      $40,093      $43,421      $46,525     

Fixed Charges
- ---------------------------------
Interest Expense                          23,465       24,139       24,139       24,869       26,226       27,588     
Lease and Rental Expense                   5,281        4,829        4,829        4,165        3,724        3,639     
---------    ---------    ----------   ---------    ---------    ---------
Total Fixed Charges                       28,746       28,968       28,968       29,034       29,950       31,227     

Pro Forma Balance Sheet Data
Working Capital                              536          536          536          536          536          536     
Total Assets                             376,801      366,642      366,642      373,104      378,524      381,099     
Total Debt                               283,851      284,002      284,002      302,775      321,996      340,358     
Total Partners' Capital (Deficit)         (8,229)     (19,372)     (19,372)     (36,520)     (56,754)     (78,686)    
---------    ---------    ----------   ---------    ---------    ---------
Total Capitalization                     275,622      264,630      264,630      266,255      265,242      261,672     

Pro Forma Credit Analysis
- ---------------------------------  
Interest Coverage Ratio (1)               2.13 x       2.66 x       2.82 x       2.89 x       2.92 x       2.94 x     
Fixed Charge Coverage Ratio (2)           1.74 x       2.22 x       2.35 x       2.47 x       2.56 x       2.60 x     
Total Debt to Total Capitalization        103.0%       107.3%       107.3%       113.7%       121.4%       130.1%    
Total Debt to EBITDA                      5.67 x       4.42 x       4.17 x       4.22 x       4.20 x       4.19 x     
Total Debt to Distributable Cash Flow    14.26 x       8.52 x       7.61 x       7.55 x       7.42 x       7.32 x     

Projected for the Year Ending September 30,
-------------------------------------------------------------------------
30 Year Weather Case
------------------------------------------------------------
Estimated    Estimated   Normalized
Pro Forma EBITDA                          1998E        1999E        1999E        2000E        2001E        2002E
- ---------------------------------       ---------    ---------    ----------   ---------    ---------    ---------
Star                                     $18,906      $20,734      $24,106      $25,260      $26,797      $28,335
Petro                                     30,612       44,298       47,215       50,369       54,883       59,097
Synergies                                    500          500          500          500          500          500
---------    ---------    ----------   ---------    ---------    ---------
Pro Forma EBITDA                         $50,018      $65,532      $71,821      $76,129      $82,180      $87,932

Distributable Cash Flow
- ---------------------------------   
Pro Forma EBITDA                          50,018       65,532       71,821       76,129       82,180       87,932
Interest Expense                         (23,465)     (24,672)     (24,672)     (26,122)     (27,845)     (29,557)
Maintenance Capex                         (6,125)      (6,273)      (6,273)      (6,393)      (6,516)      (6,641)
Other                                       (525)        (525)        (525)        (625)        (675)        (725)
---------    ---------    ----------   ---------    ---------    ---------
Distributable Cash Flow                   19,903       34,062       40,351       42,989       47,144       51,009

Fixed Charges
- ---------------------------------
Interest Expense                          23,465       24,672       24,672       26,122       27,845       29,557
Lease and Rental Expense                   5,281        4,829        4,829        4,165        3,724        3,639
---------    ---------    ----------   ---------    ---------    ---------
Total Fixed Charges                       28,746       29,501       29,501       30,287       31,569       33,196

Pro Forma Balance Sheet Data
- ---------------------------------
Working Capital                              536          536          536          536          536          536
Total Assets                             376,801      366,777      366,777      378,583      389,218      396,254
Total Debt                               283,851      298,719      298,719      322,620      346,822      369,831
Total Partners' Capital (Deficit)         (8,229)     (34,010)     (34,010)     (51,584)     (72,845)     (96,135)
Total Capitalization                     275,622      264,709      264,709      271,036      273,977      273,696

Pro Forma Credit Analysis
- ---------------------------------
Interest Coverage Ratio (1)               2.13 x       2.66 x       2.91 x       2.91 x       2.95 x       2.97 x
Fixed Charge Coverage Ratio (2)           1.74 x       2.22 x       2.43 x       2.51 x       2.60 x       2.65 x
Total Debt to Total Capitalization         103.0%       112.8%       112.8%       119.0%       126.6%       135.1%
Total Debt to EBITDA                      5.67 x       4.56 x       4.16 x       4.24 x       4.22 x       4.21 x
Total Debt to Distributable Cash Flow    14.26 x       8.77 x       7.40 x       7.50 x       7.36 x       7.25 x

- ---------------
(1)Interest coverage ratio is EBITDA divided by interest expense.
(2)Fixed charge coverage ratio is EBITDA divided by total fixed charges.

- --------------------------------------------------------------------------------
Dain Rauscher Wessels                                                    Page 7

[LOGO] PETRO(TM)   Project Intense Heat

================================================================================

Unit Reference Value Analysis

================================================================================

- --------------------------------------------------------------------------------
Dain Rauscher Wessels                                                    Page 8

[LOGO] PETRO(TM)   Unit Reference Value Analysis
Unit Reference Value Analysis Summary

================================================================================

PROJECT INTENSE HEAT
Unit Reference Value Analysis Summary

Dain
15 Year     30 Year   Rauscher
Downside     Weather     Weather    Wessels
Indicated Reference Values per Star Unit                            Case        Case        Case        Case
- -----------------------------------------------------------       --------    --------    --------   ---------

Common Unit                                                        $19.57      $23.63      $27.49      $21.03
Senior Subordinated Unit                                           $15.22      $18.75      $28.67      $16.56
Junior Subordinated / General Partner Unit                         $11.09      $13.49      $21.16      $12.02

Exchange Ratio (Star Unit / Petro Share)
- -----------------------------------------------------------     
Senior Subordinated Unit                                          0.11758     0.11758     0.11758     0.11758
Junior Subordinated / General Partner Unit                        0.14318     0.14318     0.14318     0.14318

Implied Reference Value per Petro Share                                     Senior Subordinated Unit
- -----------------------------------------------------------       --------------------------------------------
Implied Reference Value (excluding DPUs and GP Incentives)          $1.79       $2.20       $2.74       $1.95
DPUs and GP Incentives Value                                           --        0.00        0.63        0.00
--------    --------    --------   ---------
Total Implied Reference Value                                       $1.79       $2.20       $3.37       $1.95
========    ========    ========   =========

Implied Reference Value per Petro Share                             Junior Subordinated/ General Partner Unit
- -----------------------------------------------------------       --------------------------------------------
Implied Reference Value (excluding DPUs and GP Incentives)          $1.59       $1.93       $2.43       $1.72
DPUs and GP Incentives Value                                           --        0.00        0.60        0.00
--------    --------    --------   ---------
Total Implied Reference Value                                       $1.59       $1.93       $3.03       $1.72
========    ========    ========   =========

- --------------------------------------------------------------------------------
Sain Rauscher Wessels                                                     Page 9

[LOGO]  PETRO(TM)  Unit Reference Value Analysis 
Unit Reference Value Analysis Discount Rate Assumptions

================================================================================

PROJECT INTENSE HEAT
Unit Reference Value Analysis Discount Rate Assumptions

15 Year                   
Downside Case                      Weather Case                
--------------------------         ----------------------
Discount        Bps Spread         Discount    Bps Spread             
Rate           to Common           Rate       to Common             
--------        ----------         --------    ----------

Common Unit                                               12.00% (1)            --           10.25%             --             

Senior Subordinated Unit
- ---------------------------------------------------
Senior Subordinated Unit Distributions                    14.50%           250 bps           12.25%              200 bps       

Deferred Participation Units (DPUs)                           --                --           14.25%              400 bps       

GP Incentive Distributions                                    --                --           14.75%              450 bps       

Junior Subordinated / General Partner Unit
- ---------------------------------------------------
Junior Subordinated Unit Distributions                    15.50%           350 bps           13.25%              300 bps       

Deferred Participation Units (DPUs)                           --                --           14.25%              400 bps       

GP Incentive Distributions                                    --                --           14.75%              450 bps       

Dain Rauscher
Weather Case                           Wessels Case
--------------------------                ----------------------
Discount        Bps Spread                Discount    Bps Spread
Rate           to Common                  Rate       to Common
----------      ----------                --------    ----------

Common Unit                                               9.75%                 --                 11.50%             --

Senior Subordinated Unit
- ---------------------------------------------------
Senior Subordinated Unit Distributions                   11.00%            125 bps                 13.75%        225 bps

Deferred Participation Units (DPUs)                      13.75%            400 bps                 15.50%        400 bps

GP Incentive Distributions                               14.25%            450 bps                 16.00%        450 bps

Junior Subordinated / General Partner Unit
- ---------------------------------------------------
Junior Subordinated Unit Distributions                   11.75%            200 bps                 14.75%        325 bps

Deferred Participation Units (DPUs)                      13.75%            400 bps                 15.50%        400 bps

GP Incentive Distributions                               14.25%            450 bps                 16.00%        450 bps

- ---------------
(1)  Common Unit  discount  rate is derived by using the midpoint  discount rate
between the appropriate  discount rates required to calculate a net present
value equal to the  1/22/99  closing  price of $19.00  using flat $2.20 and
$2.30  distributions  representing  Star  stand  alone and Star pro  forma,
respectively.

- --------------------------------------------------------------------------------
Dain Rauscher Wessels                                                   Page 10

[LOGO] PETRO(TM) Unit Reference Value Analysis 
Projected Indicated  Distribution per Unit and Cash 
Distributions per Unit Class

PROJECT INTENSE HEAT
Projected Indicated Distribution per Unit and Cash Distributions per Unit Class
(In thousands, except as otherwise indicated)

Projected for the Year Ending September 30,
------------------------------------------------
15 Year Weather Case               
------------------------------------------------
Distributable Cash Flow                                                          1999E       2000E         2001E          2002E  
- ----------------------------------------------                                  -------     -------       -------        -------

Distributable Cash Flow                                                         $37,329     $40,093       $43,421        $46,525 
Indicated Distribution per Unit                                                   $2.30       $2.32         $2.40          $2.40 

Cash Distributions
- ----------------------------------------------
Distributions to Unitholders                                                    $38,097     $40,110       $42,937        $44,273 
GP Incentive Distributions                                                            0           0             0              0 
-------     -------       -------        -------
Total Cash Distributions                                                        $38,097     $40,110       $42,937        $44,273 
=======     =======       =======        =======
Weighted Average Units Outstanding
- ----------------------------------------------
Common Units                                                                     13,319      14,044        14,646         15,202 
Senior Subordinated Units (incl. DPUs)                                            2,491       2,491         2,491          2,491 
Junior Subordinated Units                                                           430         430           430            430 
General Partner Units                                                               323         323           323            323
-------     -------       -------        -------
Total Units Outstanding                                                          16,564      17,289        17,891         18,447 
Splits
-------------------
Annual    Unit-      GP
GP Incentive Distribution Targets              Target   holders  Incentives
- --------------------------------------------   ------   -------  ----------
Minimum Quarterly Distribution                 $2.30    100.00%     0.00%
First Target Distribution                      $2.42    100.00%     0.00%
Second Target Distribution                     $2.84     86.70%    13.30%
Third Target Distribution                      $3.70     76.50%    23.50%
Thereafter                                        --     51.00%    49.00%

Cash Distributions prior to First Target
- ----------------------------------------------
Cash Distributed to Unitholders                                                  38,097      40,110        42,937         44,273 
Allocation to Common Units                                                       30,634      32,582        35,149         36,485 
Allocation to Senior Subordinated Units                                           5,730       5,780         5,980          5,980 
Allocation to Junior Subordinated Units                                             990         999         1,033          1,033 
Allocation to General Partner Units                                                 743         750           775            775 
GP Incentive DistributionsTotal Cash Distributed                                 38,097      40,110        42,937         44,273

Cash Distributions First to Second Target
- ----------------------------------------------
Cash Distributed to Unitholders                                                       0           0             0              0
Allocation to Common Units                                                            0           0             0              0
Allocation to Senior Subordinated Units                                               0           0             0              0
Allocation to Junior Subordinated Units                                               0           0             0              0
Allocation to General Partner Units                                                   0           0             0              0
GP Incentive Distributions                                                            0           0             0              0
Total Cash Distributed                                                                0           0             0              0

Cash Distributions Second to Third Target
- ----------------------------------------------
Cash Distributed to Unitholders                                                      $0          $0            $0             $0
Allocation to Common Units                                                            0           0             0              0
Allocation to Senior Subordinated Units                                               0           0             0              0
Allocation to Junior Subordinated Units                                               0           0             0              0
Allocation to General Partner Units                                                   0           0             0              0
GP Incentive Distributions                                                            0           0             0              0
Total Cash Distributed                                                                0           0             0              0

Cash Distributions Third to Thereafter Target
- ----------------------------------------------
Cash Distributed to Unitholders                                                      $0          $0            $0             $0
Allocation to Common Units                                                            0           0             0              0
Allocation to Senior Subordinated Units                                               0           0             0              0
Allocation to Junior Subordinated Units                                               0           0             0              0
Allocation to General Partner Units                                                   0           0             0              0
GP Incentive Distributions                                                            0           0             0              0
Total Cash Distributed                                                                0           0             0              0

Projected for the Year Ending September 30,   
---------------------------------------------------------       
30 Year Weather Case                    
---------------------------------------------------------       
Distributable Cash Flow                                          1999E            2000E           2001E            2002E        
- ----------------------------------------------                  -------          -------         -------          -------       

Distributable Cash Flow                                         $40,351          $42,989         $47,144          $51,009       
Indicated Distribution per Unit                                   $2.30            $2.50           $2.63            $2.70       

Cash Distributions                                                                                                              
- ----------------------------------------------                                                                                  
Distributions to Unitholders                                    $37,251          $42,044         $46,465          $50,004       
GP Incentive Distributions                                            0              217             580              807  
-------          -------         -------          -------   
Total Cash Distributions                                        $37,251          $42,261         $47,045          $50,810       
=======          =======         =======          =======       
Weighted Average Units Outstanding                                                                                              
- ----------------------------------------------                                                                                  
Common Units                                                     12,951           13,270          13,816           14,366       
Senior Subordinated Units (incl. DPUs)                            2,491            2,794           3,097            3,400       
Junior Subordinated Units                                           430              430             430              430       
General Partner Units                                               323              323             323              323  
-------          -------         -------          -------   
Total Units Outstanding                                          16,196           16,818          17,667           18,520       

GP Incentive Distribution Targets                                                                    
- ---------------------------------------------                                                        
Minimum Quarterly Distribution                                                                       
First Target Distribution                                                                            
Second Target Distribution                                                                           
Third Target Distribution                                                                            
Thereafter                                                                                           

Cash Distributions prior to First Target                                                             
- ----------------------------------------------                                                                                  
Cash Distributed to Unitholders                                  37,251           40,632          42,684           44,744       
Allocation to Common Units                                       29,788           32,060          33,380           34,708       
Allocation to Senior Subordinated Units                           5,730            6,752           7,484            8,216       
Allocation to Junior Subordinated Units                             990            1,040           1,040            1,040       
Allocation to General Partner Units                                 743              781             781              781       
GP Incentive Distributions                                                                                                      
Total Cash Distributed                                           37,251           40,632          42,684           44,744       

Cash Distributions First to Second Target                                                                                       
- ----------------------------------------------                                                                                  
Cash Distributed to Unitholders                                       0            1,413           3,781            5,260       
Allocation to Common Units                                            0            1,115           2,957            4,080       
Allocation to Senior Subordinated Units                               0              235             663              966       
Allocation to Junior Subordinated Units                               0               36              92              122       
Allocation to General Partner Units                                   0               27              69               92       
GP Incentive Distributions                                            0              217             580              807       
Total Cash Distributed                                                0            1,629           4,361            6,066       

Cash Distributions Second to Third Target                                                                                       
- ----------------------------------------------                                                                                  
Cash Distributed to Unitholders                                      $0               $0              $0               $0       
Allocation to Common Units                                            0                0               0                0       
Allocation to Senior Subordinated Units                               0                0               0                0       
Allocation to Junior Subordinated Units                               0                0               0                0       
Allocation to General Partner Units                                   0                0               0                0       
GP Incentive Distributions                                            0                0               0                0       
Total Cash Distributed                                                0                0               0                0       

Cash Distributions Third to Thereafter Target                                                                                   
- ----------------------------------------------                                                                                  
Cash Distributed to Unitholders                                      $0               $0              $0               $0       
Allocation to Common Units                                            0                0               0                0       
Allocation to Senior Subordinated Units                               0                0               0                0       
Allocation to Junior Subordinated Units                               0                0               0                0       
Allocation to General Partner Units                                   0                0               0                0       
GP Incentive Distributions                                            0                0               0                0       
Total Cash Distributed                                                0                0               0                0      

- --------------------------------------------------------------------------------
Dain Rauscher Wessels                                                   Page 11

[LOGO APPEARS HERE]
Unit Reference Value Analysis
Projected Indicated Distribution per Unit and Cash Distributions per Unit Class

====================================================================================================================================

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

PROJECT INTENSE HEAT
Projected Indicated Distribution per Unit and Cash Distributions per Unit Class
(In thousands, except as otherwise indicated)

Projected for the Year Ending September 30,
--------------------------------------------------------------------------------
15 Year Weather Case             30 Year Weather Case
---------------------------------------- ---------------------------------------
Common Unit Cash Distributions                      1999E     2000E      2001E     2002E     1999E     2000E     2001E     2002E
- -----------------------------------------------   --------- ---------  --------- --------- --------- --------- --------- ---------

Cash Distributions prior to First Target           $30,634   $32,582    $35,149   $36,485   $29,788   $32,060   $33,380   $34,708
Cash Distributions First to Second Target                0         0          0         0         0     1,115     2,957     4,080
Cash Distributions Second to Third Target                0         0          0         0         0         0         0         0
Cash Distributions Third to Thereafter Target            0         0          0         0         0         0         0         0
--------- ---------  --------- --------- --------- --------- --------- ---------
Total Cash Distributions                           $30,634   $32,582    $35,149   $36,485   $29,788   $33,174   $36,337   $38,788
Total Cash Distributions per Unit                   $2.300    $2.320     $2.400    $2.400    $2.300    $2.500    $2.630    $2.700
Weighted Average Units Outstanding                  13,319    14,044     14,646    15,202    12,951    13,270    13,816    14,366

Senior Subordinated Unit Cash Distributions                                                                               
- -----------------------------------------------
Cash Distributions prior to First Target            $5,730    $5,780     $5,980    $5,980    $5,730    $6,752    $7,484    $8,216
Cash Distributions First to Second Target                0         0          0         0         0       235       663       966
Cash Distributions Second to Third Target                0         0          0         0         0         0         0         0
Cash Distributions Third to Thereafter Target            0         0          0         0         0         0         0         0
--------- ---------  --------- --------- --------- --------- --------- ---------
Total Cash Distributions                            $5,730    $5,780     $5,980    $5,980    $5,730    $6,986    $8,146    $9,181
Total Cash Distributions per Unit                   $2.300    $2.320     $2.400    $2.400    $2.300    $2.500    $2.630    $2.700
Weighted Average Units Outstanding                   2,491     2,491      2,491     2,491     2,491     2,794     3,097     3,400

Junior Subordinated Unit Cash Distributions                                                                               
- -----------------------------------------------
Cash Distributions prior to First Target              $990      $999     $1,033    $1,033      $990    $1,040    $1,040    $1,040
Cash Distributions First to Second Target                0         0          0         0         0        36        92       122
Cash Distributions Second to Third Target                0         0          0         0         0         0         0         0
Cash Distributions Third to Thereafter Target            0         0          0         0         0         0         0         0
--------- ---------  --------- --------- --------- --------- --------- ---------
Total Cash Distributions                              $990      $999     $1,033    $1,033      $990    $1,076    $1,132    $1,162
Total Cash Distributions per Unit                   $2.300    $2.320     $2.400    $2.400    $2.300    $2.500    $2.630    $2.700
Weighted Average Units Outstanding                     430       430        430       430       430       430       430       430

General Partner Unit Cash Distributions                                                                                   
- -----------------------------------------------
Cash Distributions prior to First Target              $743      $750       $775      $775      $743      $781      $781      $781
Cash Distributions First to Second Target                0         0          0         0         0        27        69        92
Cash Distributions Second to Third Target                0         0          0         0         0         0         0         0
Cash Distributions Third to Thereafter Target            0         0          0         0         0         0         0         0
--------- ---------  --------- --------- --------- --------- --------- ---------
Total Cash Distributions                              $743      $750       $775      $775      $743      $808      $850      $872
Total Cash Distributions per Unit                   $2.300    $2.320     $2.400    $2.400    $2.300    $2.500    $2.630    $2.700
Weighted Average Units Outstanding                     323       323        323       323       323       323       323       323

GP Incentive Distributions                                                                                                
- -----------------------------------------------
Cash Distributions prior to First Target                --        --         --        --        --        --        --        --
Cash Distributions First to Second Target               $0        $0         $0        $0        $0      $217      $580      $807
Cash Distributions Second to Third Target                0         0          0         0         0         0         0         0
Cash Distributions Third to Thereafter Target            0         0          0         0         0         0         0         0
--------- ---------  --------- --------- --------- --------- --------- ---------
Total Cash Distributions                                $0        $0         $0        $0        $0      $217      $580      $807
Total Cash Distributions per Unit (Sr, Jr & GP)     $0.000    $0.000     $0.000    $0.000    $0.000    $0.061    $0.151    $0.194
Weighted Average Units Outstanding (Sr, Jr & GP)     3,245     3,245      3,245     3,245     3,245     3,548     3,851     4,154

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

====================================================================================================================================
Dain Rauscher Wessels                                                                                                     Page 12

[LOGO APPEARS HERE]
Unit Reference Value Analysis
Cumulative Incremental DPU per Unit Calculation

====================================================================================================================================

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

PROJECT INTENSE HEAT
Cumulative Incremental DPU per Unit Calculation
(In thousands, except as otherwise indicated)

Projected for the Year Ending September 30,
--------------------------------------------------------------------------------
15 Year Weather Case             30 Year Weather Case
---------------------------------------- ---------------------------------------
Units to Receive DPUs                               1999E     2000E      2001E     2002E     1999E     2000E     2001E     2002E
- -----------------------------------------------   --------- ---------  --------- --------- --------- --------- --------- ---------

Senior Subordinated Units (includes DPUs)             2,491     2,491      2,491     2,491     2,491     2,794     3,097     3,400
Junior Subordinated Units                               430       430        430       430       430       430       430       430
General Partner Units                                   323       323        323       323       323       323       323       323
--------- ---------  --------- --------- --------- --------- --------- ---------
Total Units                                           3,245     3,245      3,245     3,245     3,245     3,548     3,851     4,154

Cumulative Incremental DPU per Unit                                                                                          
- -----------------------------------------------
DPUs Distributed                                          0         0          0         0         0       303       303       303
DPU per Outstanding Unit                              0.000     0.000      0.000     0.000     0.000     0.093     0.085     0.079

- ------------------------------------------------------------------------------------------------------------------------------------
Cumulative Incremental DPU per Unit                   0.000     0.000      0.000     0.000     0.000     0.093     0.187     0.280
- ------------------------------------------------------------------------------------------------------------------------------------

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

====================================================================================================================================
Dain Rauscher Wessels                                                                                                        Page 13

[LOGO APPEARS HERE]
Unit Reference Value Analysis
Unit Reference Value Analysis (Downside Case)

==================================================================================================================================

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

PROJECT INTENSE HEAT
Unit Reference Value Analysis (Downside Case)

Downside Case
--------------------------------------------------------------------------------
Projected for the Year                     
Ending September 30,            Terminal    Total  Liquidity  Adjusted
----------------------------------------                     Discount
Common Unit (1)                                     1999E     2000E      2001E     2002E    Value (3)    NPV     (4)        NPV
- -----------------------------------------------   --------- ---------  --------- ---------  --------- -------- --------- ---------

Cash Distributions                                    $2.30     $2.30      $2.30     $2.30   $19.17   

Period                                                 0.50      1.50       2.50      3.50     4.00   
- ----------------------------------------------------------------------------------------------------------------------------------
NPV @ 12.00%                                          $2.17     $1.94      $1.73     $1.55   $12.18     $19.57     --      $19.57
- ----------------------------------------------------------------------------------------------------------------------------------

Senior Subordinated Unit (2)                                                                                     
- -----------------------------------------------                                                       

Cash Distributions                                    $1.15     $2.30      $2.30     $2.30   $15.86              

Period                                                 0.75      1.50       2.50      3.50     4.00              
- ----------------------------------------------------------------------------------------------------------------------------------
NPV @ 14.50% (250 bps spread to Common)               $1.04     $1.88      $1.64     $1.43    $9.23     $15.22     --      $15.22
- ----------------------------------------------------------------------------------------------------------------------------------

Junior Subordinated / General Partner Unit (2)                                                                   
- -----------------------------------------------                                                       

Cash Distributions                                    $1.15     $2.30      $2.30     $2.30   $14.84              

Period                                                 0.75      1.50       2.50      3.50     4.00              
- ----------------------------------------------------------------------------------------------------------------------------------
NPV @ 15.50% (350 bps spread to Common)               $1.03     $1.85      $1.60     $1.39    $8.34     $14.22   22.0%     $11.09
- ----------------------------------------------------------------------------------------------------------------------------------

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

(1) Common Unit discount rate is derived by using the midpoint discount rate
between the appropriate discount rates required to calculate a net present
value equal to the 1/22/99 closing price of $19.00 using flat $2.20 and
$2.30 distributions representing Star stand alone and Star pro forma,
respectively.
(2) Senior Subordinated and Junior Subordinated / General Partner Units are
assumed to receive no distributions for the third and fourth fiscal quarters
of 1999E.
(3) Terminal value is calculated as a perpetuity by dividing 2002E distribution
by the discount rate.
(4) The Junior Subordinated and General Partner Unit discount is determined by
using a 25% liquidity discount for both Units and a 10% control premium for
a General Partner Unit. The weighted average based upon pro forma Unit
ownership is a discount of 22%.

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

================================================================================
Dain Rauscher Wessels                                                    Page 14

[LOGO APPEARS HERE]
Unit Reference Value Analysis
Common Unit Reference Value Analysis
(15 Year Weather Case)

==============================================================================================================

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

PROJECT INTENSE HEAT
Common Unit Reference Value Analysis (15 Year Weather Case)

15 Year Weather Case
-----------------------------------------------------------
Projected for the Year                     
Ending September 30,            Terminal   Total   
----------------------------------------                     
Common Unit (1)                                     1999E     2000E      2001E     2002E    Value (2)   NPV    
- -----------------------------------------------   --------- ---------  --------- ---------  --------- -------- 

Cash Distributions                                    $2.30     $2.32      $2.40     $2.40    $23.41  

Period                                                 0.50      1.50       2.50      3.50      4.00  

- --------------------------------------------------------------------------------------------------------------
NPV @ 10.25%                                          $2.19     $2.00      $1.88     $1.71    $15.85    $23.63
- --------------------------------------------------------------------------------------------------------------

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

(1) Common Unit discount rate is a Dain Rauscher Wessels assumed yield based
upon growth rate in distributions in the 15 year weather case.
(2) Terminal value is calculated as a perpetuity by dividing 2002E distribution
by the discount rate.

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

================================================================================
Dain Rauscher Wessels                                                   Page 15

[LOGO APPEARS HERE]
Unit Reference Value Analysis
Senior Subordinated Unit Reference Value Analysis
(15 Year Weather Case)

==============================================================================================================

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

PROJECT INTENSE HEAT
Senior Subordinated Unit Reference Value Analysis (15 Year Weather Case)

15 Year Weather Case
-----------------------------------------------------------
Projected for the Year 
Ending September 30,           Terminal    Total   
----------------------------------------                     
Senior Subordinated Unit Distributions (1)          1999E     2000E      2001E     2002E   Value (2)    NPV    
- -----------------------------------------------   --------- ---------  --------- --------- --------- --------- 

Cash Distributions                                    $1.15     $2.32      $2.40     $2.40   $19.59

Period                                                 0.75      1.50       2.50      3.50     4.00

NPV @ 12.25% (200 bps spread to Common)               $1.05     $1.95      $1.80     $1.60   $12.34     $18.75

Deferred Participation Unit (DPU)                                                                       
- -----------------------------------------------

Cumulative Incremental DPU per Unit                   0.000     0.000      0.000     0.000              

Cash Distributions per Fractional Unit                $0.00     $0.00      $0.00     $0.00    $0.00     

Period                                                 0.50      1.50       2.50      3.50     4.00     

NPV @ 14.25% (400 bps spread to Common)               $0.00     $0.00      $0.00     $0.00    $0.00      $0.00

GP Incentive Distributions                                                                              
- -----------------------------------------------

Cash Distributions                                    $0.00     $0.00      $0.00     $0.00    $0.00     

Period                                                 0.50      1.50       2.50      3.50     4.00     

NPV @ 14.75% (450 bps spread to Common)               $0.00     $0.00      $0.00     $0.00    $0.00      $0.00

- --------------------------------------------------------------------------------------------------------------
Total Net Present Value per Unit                      $1.05     $1.95      $1.80     $1.60   $12.34     $18.75
- --------------------------------------------------------------------------------------------------------------

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

(1) Senior Subordinated Units are assumed to receive no distributions for the
third and fourth fiscal quarters of 1999E.

(2) Terminal value is calculated as a perpetuity by dividing 2002E distribution
by the discount rate.

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

================================================================================
Dain Rauscher Wessels                                                   Page 16

[LOGO APPEARS HERE]
Unit Reference Value Analysis
Junior Subordinated / General Partner Unit Reference Value Analysis
(15 Year Weather Case)

==================================================================================================================================

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

PROJECT INTENSE HEAT
Junior Subordinated / General Partner Unit Reference Value Analysis (15 Year Weather Case)

15 Year Weather Case
--------------------------------------------------------------------------------
Projected for the Year 
Ending September 30,           Terminal    Total   Liquidity  Adjusted
----------------------------------------                     Discount
Junior Subordinated / GP Unit Distributions (1)     1999E     2000E      2001E     2002E   Value (2)    NPV      (3)        NPV
- -----------------------------------------------   --------- ---------  --------- --------- --------- --------- --------- ---------

Cash Distributions                                    $1.15     $2.32      $2.40     $2.40  $18.11

Period                                                 0.75      1.50       2.50      3.50    4.00

NPV @ 13.25% (300 bps spread to Common)               $1.05     $1.92      $1.76     $1.55  $11.01      $17.29     22%      $13.49

Deferred Participation Unit (DPU)                                                                                           
- -----------------------------------------------

Cumulative Incremental DPU per Unit                   0.000     0.000      0.000     0.000                                  

Cash Distributions per Fractional Unit                $0.00     $0.00      $0.00     $0.00   $0.00                          

Period                                                 0.50      1.50       2.50      3.50    4.00                          

NPV @ 14.25% (400 bps spread to Common)               $0.00     $0.00      $0.00     $0.00   $0.00       $0.00     22%       $0.00

GP Incentive Distributions                                                                                                  
- -----------------------------------------------

Cash Distributions                                    $0.00     $0.00      $0.00     $0.00   $0.00                          

Period                                                 0.50      1.50       2.50      3.50    4.00                          

NPV @ 14.75% (450 bps spread to Common)               $0.00     $0.00      $0.00     $0.00   $0.00       $0.00     22%       $0.00

- ----------------------------------------------------------------------------------------------------------------------------------
Total Net Present Value per Unit                      $1.05     $1.92      $1.76     $1.55  $11.01      $17.29     22%      $13.49
- ----------------------------------------------------------------------------------------------------------------------------------

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

(1) Junior / General Partner Subordinated Units are assumed to receive no
distributions for the third and fourth fiscal quarters of 1999E.

(2) Terminal value is calculated as a perpetuity by dividing 2002E distribution
by the discount rate.

(3) The Junior Subordinated and General Partner Unit discount is determined by
using a 25% liquidity discount for both Units and a 10% control premium for
a General Partner Unit. The weighted average based upon pro forma Unit
ownership is a discount of 22%.

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

================================================================================
Dain Rauscher Wessels                                                   Page 17

[LOGO APPEARS HERE]
Unit Reference Value Analysis
Common Unit Reference Value Analysis
(30 Year Weather Case)

==================================================================================================================================

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

PROJECT INTENSE HEAT
Common Unit Reference Value Analysis (30 Year Weather Case)

30 Year Weather Case
-----------------------------------------------------------
Projected for the Year 
Ending September 30,           Terminal    Total   
----------------------------------------                     
Common Unit (1)                                     1999E     2000E      2001E     2002E   Value (2)    NPV    
- -----------------------------------------------   --------- ---------  --------- --------- --------- --------- 

Cash Distributions                                    $2.30     $2.50      $2.63     $2.70   $27.69

Period                                                 0.50      1.50       2.50      3.50     4.00
- --------------------------------------------------------------------------------------------------------------
NPV @ 9.75%                                           $2.20     $2.17      $2.08     $1.95   $19.09     $27.49
- --------------------------------------------------------------------------------------------------------------

(1) Common Unit discount rate is a Dain Rauscher Wessels assumed yield based
upon the growth rate in distributions in the 30 year weather case.

(2) Terminal value is calculated as a perpetuity by dividing 2002E distribution
by the discount rate.

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

================================================================================
Dain Rauscher Wessels                                                    Page 18

[LOGO APPEARS HERE]
Unit Reference Value Analysis
Senior Subordinated Unit Reference Value Analysis
(30 Year Weather Case)

==============================================================================================================

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

PROJECT INTENSE HEAT
Senior Subordinated Unit Reference Value Analysis (30 Year Weather Case)

30 Year Weather Case
-----------------------------------------------------------
Projected for the Year 
Ending September 30,           Terminal    Total   
----------------------------------------                     
Senior Subordinated Unit Distributions (1)          1999E     2000E      2001E     2002E   Value (2)    NPV    
- -----------------------------------------------   --------- ---------  --------- --------- --------- --------- 

Cash Distributions                                    $1.15     $2.50      $2.63     $2.70   $24.55

Period                                                 0.75      1.50       2.50      3.50     4.00

NPV @ 11.00% (125 bps spread to Common)               $1.06     $2.14      $2.03     $1.87   $16.17     $23.27

Deferred Participation Unit (DPU)                                                                       
- -----------------------------------------------

Cumulative Incremental DPU per Unit                   0.000     0.093      0.187     0.280              

Cash Distributions per Fractional Unit                $0.00     $0.23      $0.49     $0.76    $5.50     

Period                                                 0.50      1.50       2.50      3.50     4.00     

NPV @ 13.75% (400 bps spread to Common)               $0.00     $0.19      $0.36     $0.48    $3.29      $4.32

GP Incentive Distributions                                                                              
- -----------------------------------------------

Cash Distributions                                    $0.00     $0.06      $0.15     $0.19    $1.36     

Period                                                 0.50      1.50       2.50      3.50     4.00     

NPV @ 14.25% (450 bps spread to Common)               $0.00     $0.05      $0.11     $0.12    $0.80      $1.08

- --------------------------------------------------------------------------------------------------------------
Total Net Present Value per Unit                      $1.06     $2.38      $2.49     $2.48   $20.25     $28.67
- --------------------------------------------------------------------------------------------------------------

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

(1) Senior Subordinated Units are assumed to receive no distributions for the
third and fourth fiscal quarters of 1999E.

(2) Terminal value is calculated as a perpetuity by dividing 2002E distribution
by the discount rate.

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

================================================================================
Dain Rauscher Wessels                                                    Page 19

[LOGO APPEARS HERE]
Unit Reference Value Analysis
Junior Subordinated / General Partner Unit Reference Value Analysis
(30 Year Weather Case)

==================================================================================================================================

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

PROJECT INTENSE HEAT
Junior Subordinated / General Partner Unit Reference Value Analysis (30 Year Weather Case)

30 Year Weather Case
--------------------------------------------------------------------------------
Projected for the Year 
Ending September 30,           Terminal    Total   Liquidity  Adjusted
----------------------------------------                     Discount
Junior Subordinated / GP Unit Distributions (1)     1999E     2000E      2001E     2002E   Value (2)    NPV      (3)        NPV
- -----------------------------------------------   --------- ---------  --------- --------- --------- --------- --------- ---------

Cash Distributions                                    $1.15     $2.50      $2.63     $2.70   $22.98

Period                                                 0.75      1.50       2.50      3.50     4.00

NPV @ 11.75% (200 bps spread to Common)               $1.06     $2.12      $1.99     $1.83   $14.73     $21.73      22%     $16.95

Deferred Participation Unit (DPU)
- -----------------------------------------------

Cumulative Incremental DPU per Unit                   0.000     0.093      0.187     0.280                                  

Cash Distributions per Fractional Unit                $0.00     $0.23      $0.49     $0.76    $5.50                         

Period                                                 0.50      1.50       2.50      3.50     4.00                         

NPV @ 13.75% (400 bps spread to Common)               $0.00     $0.19      $0.36     $0.48    $3.29      $4.32      22%      $3.37

GP Incentive Distributions                                                                                                  
- -----------------------------------------------

Cash Distributions                                    $0.00     $0.06      $0.15     $0.19    $1.36                         

Period                                                 0.50      1.50       2.50      3.50     4.00                         

NPV @ 14.25% (450 bps spread to Common)               $0.00     $0.05      $0.11     $0.12    $0.80      $1.08      22%      $0.84

- ----------------------------------------------------------------------------------------------------------------------------------
Total Net Present Value per Unit                      $1.06     $2.36      $2.46     $2.43   $18.82     $27.13      22%     $21.16
- ----------------------------------------------------------------------------------------------------------------------------------

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

(1) Junior / General Partner Subordinated Units are assumed to receive no
distributions for the third and fourth fiscal quarters of 1999E.

(2) Terminal value is calculated as a perpetuity by dividing 2002E distribution
by the discount rate.

(3) The Junior Subordinated and General Partner Unit discount is determined by
using a 25% liquidity discount for both Units and a 10% control premium for
a General Partner Unit. The weighted average based upon pro forma Unit
ownership is a discount of 22%.

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

================================================================================
Dain Rauscher Wessels                                                    Page 20

[LOGO APPEARS HERE]
Unit Reference Value Analysis
Common Unit Reference Value Analysis
(Dain Rauscher Wessels Case)

==============================================================================================================

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

PROJECT INTENSE HEAT
Common Unit Reference Value Analysis (Dain Rauscher Wessels Case)

Dain Rauscher Wessels Case
-----------------------------------------------------------
Projected for the Year 
Ending September 30,           Terminal    Total   
----------------------------------------                     
Common Unit (1)                                     1999E     2000E      2001E     2002E   Value (2)    NPV    
- -----------------------------------------------   --------- ---------  --------- --------- --------- --------- 

Cash Distributions                                    $2.30     $2.30      $2.30     $2.40   $20.87

Period                                                 0.50      1.50       2.50      3.50     4.00
- --------------------------------------------------------------------------------------------------------------
NPV @ 11.50%                                          $2.18     $1.95      $1.75     $1.64   $13.50     $21.03
- --------------------------------------------------------------------------------------------------------------

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

Note: Dain Rauscher Wessels Case assumes distributions of $2.30, $2.30, $2.30
and $2.40 for the years ending 1999E, 2000E, 2001E and 2002E, respectively.

(1) Common Unit discount rate is a Dain Rauscher Wessels assumed yield based
upon the growth rate in distributions in the Dain Rauscher Wessels case.

(2) Terminal value is calculated as a perpetuity by dividing 2002E distribution
by the discount rate.

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

================================================================================
Dain Rauscher Wessels                                                    Page 21

[LOGO APPEARS HERE]
Unit Reference Value Analysis
Senior Subordinated Unit Reference Value Analysis
(Dain Rauscher Wessels Case)

==============================================================================================================

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

PROJECT INTENSE HEAT
Senior Subordinated Unit Reference Value Analysis (Dain Rauscher Wessels Case)

Dain Rauscher Wessels Case
-----------------------------------------------------------
Projected for the Year 
Ending September 30,           Terminal    Total   
----------------------------------------                     
Senior Subordinated Unit Distributions (1)          1999E     2000E      2001E     2002E   Value (2)    NPV    
- -----------------------------------------------   --------- ---------  --------- --------- --------- --------- 

Cash Distributions                                    $1.15     $2.30      $2.30     $2.40   $17.45

Period                                                 0.75      1.50       2.50      3.50     4.00

NPV @ 13.75% (225 bps spread to Common)               $1.04     $1.90      $1.67     $1.53   $10.43     $16.56

Deferred Participation Unit (DPU)                                                                       
- -----------------------------------------------

Cumulative Incremental DPU per Unit                   0.000     0.000      0.000     0.000              

Cash Distributions per Fractional Unit                $0.00     $0.00      $0.00     $0.00    $0.00     

Period                                                 0.50      1.50       2.50      3.50     4.00     

NPV @ 15.50% (400 bps spread to Common)               $0.00     $0.00      $0.00     $0.00    $0.00      $0.00

GP Incentive Distributions                                                                              
- -----------------------------------------------

Cash Distributions                                    $0.00     $0.00      $0.00     $0.00    $0.00     

Period                                                 0.50      1.50       2.50      3.50     4.00     

NPV @ 16.00% (450 bps spread to Common)               $0.00     $0.00      $0.00     $0.00    $0.00      $0.00

- --------------------------------------------------------------------------------------------------------------
Total Net Present Value per Unit                      $1.04     $1.90      $1.67     $1.53   $10.43     $16.56
- --------------------------------------------------------------------------------------------------------------

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

Note: Dain Rauscher Wessels Case assumes distributions of $2.30, $2.30, $2.30
and $2.40 for the years ending 1999E, 2000E, 2001E and 2002E, respectively.

(1) Senior Subordinated Units are assumed to receive no distributions for the
third and fourth fiscal quarters of 1999E.

(2) Terminal value is calculated as a perpetuity by dividing 2002E distribution
by the discount rate.

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

================================================================================
Dain Rauscher Wessels                                                    Page 22

[LOGO APPEARS HERE]
Unit Reference Value Analysis
Junior Subordinated / General Partner Unit Reference Value Analysis
(Dain Rauscher Wessels Case)

==================================================================================================================================

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

PROJECT INTENSE HEAT
Junior Subordinated / General Partner Unit Reference Value Analysis (Dain Rauscher Wessels Case)

Dain Rauscher Wessels Case
--------------------------------------------------------------------------------
Projected for the Year 
Ending September 30,           Terminal    Total   Liquidity    Adjusted
----------------------------------------                                          
Junior Subordinated / GP Unit Distributions (1)     1999E     2000E      2001E     2002E   Value (2)    NPV    Discount (3)   NPV   
- -----------------------------------------------   --------- ---------  --------- --------- --------- --------- ----------- ---------

Cash Distributions                                    $1.15     $2.30      $2.30     $2.40   $16.27                                 

Period                                                 0.75      1.50       2.50      3.50     4.00                                 

NPV @ 14.75% (325 bps spread to Common)               $1.04     $1.87      $1.63     $1.48    $9.38     $15.41         22%    $12.02

Deferred Participation Unit (DPU)                                                                                                   
- -----------------------------------------------                                                                                     

Cumulative Incremental DPU per Unit                   0.000     0.000      0.000     0.000                                          

Cash Distributions per Fractional Unit                $0.00     $0.00      $0.00     $0.00    $0.00                                 

Period                                                 0.50      1.50       2.50      3.50     4.00                                 

NPV @ 15.50% (400 bps spread to Common)               $0.00     $0.00      $0.00     $0.00    $0.00      $0.00         22%     $0.00

GP Incentive Distributions                                                                                                          
- -----------------------------------------------                                                                                     
Cash Distributions                                    $0.00     $0.00      $0.00     $0.00    $0.00

Period                                                 0.50      1.50       2.50      3.50     4.00                                 

NPV @ 16.00% (450 bps spread to Common)               $0.00     $0.00      $0.00     $0.00    $0.00      $0.00         22%     $0.00

- ------------------------------------------------------------------------------------------------------------------------------------
Total Net Present Value per Unit                      $1.04     $1.87      $1.63     $1.48    $9.38     $15.41         22%    $12.02
- ------------------------------------------------------------------------------------------------------------------------------------

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

Note: Dain Rauscher Wessels Case assumes distributions of $2.30, $2.30, $2.30
and $2.40 for the years ending 1999E, 2000E, 2001E and 2002E, respectively.

(1) Junior / General Partner Subordinated Units are assumed to receive no
distributions for the third and fourth fiscal quarters of 1999E.

(2) Terminal value is calculated as a perpetuity by dividing 2002E distribution
by the discount rate.

(3) The Junior Subordinated and General Partner Unit discount is determined by
using a 25% liquidity discount for both Units and a 10% control premium for
a General Partner Unit. The weighted average based upon pro forma Unit
ownership is a discount of 22%.

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

================================================================================
Dain Rauscher Wessels                                                    Page 23

[LOGO APPEARS HERE]
Project Intense Heat

================================================================================

Historical and Pro Forma
MVE and MVC Comparison

================================================================================
Dain Rauscher Wessels                                                    Page 24

[LOGO OF PETRO APPEARS HERE]  Historical and Pro Forma MVE and MVC Comparison 
Petro Historical and Pro Forma Adjusted MVE and 
MVC Summary
================================================================================

PROJECT INTENSE HEAT
Petro Historical and Pro Forma Adjusted Market Value of Equity and Market Value
of Capitalization Summary
(In thousands, except as otherwise indicated)

Pro Forma Adjusted Market Value of Equity and
Historical           Market Value of Capitalization
------------------------------------------------
MVE &         Common       Sr Sub      Jr Sub / GP   Total       Percent
Market Value of Equity                                     MVC           Units        Units          Units      Units       Change
- ------------------------------------------------------   ----------   ---------     --------       --------   --------      -------

Shares / Units Outstanding                                   26,463         ---        2,491            753      3,245
Valuation per Share / Unit (1)                              $ 1.000     $21.026      $16.561        $12.017   
Market Value of Equity                                      $26,463         ---      $41,262        $ 9,054    $50,316       90.1%

Principal Amount of Debt at 9/30/98 (pre-transaction)                                                                       
- -----------------------------------------------------
11.96% Senior Notes                                          60,000                                             60,000      
14.10% Senior Notes                                           3,100                                              3,100      
14.10% Subordinated Notes                                     3,100                                              3,100      
10.13% Subordinated & Senior Subordinated Notes              50,000                                             50,000      
9.38% Subordinated & Senior Subordinated Notes               75,000                                             75,000      
12.25% Subordinated & Senior Subordinated Notes              81,250                                             81,250      
8.00% Acq. & Other Notes                                     14,435                                             14,435      
8.25% Existing Credit Facility                                    0                                                  0      
----------                                           --------      
Total Principal Amount of Debt                             $286,885                                           $286,885      
----------                                           --------      
Liquidation Value of Preferred Stock at 9/30/98 (2)                                                                         
- ----------------------------------------------------
14.33% Preferred Stock                                      $ 4,167                                            $ 4,167      
12.88% Preferred Stock                                       30,000                                             27,600      
----------                                           --------      
Total Liquidation Value of Preferred Stock                  $34,167                                            $31,767      

Debt and Preferred Stock Exchange (Common Units Issued)                                                                     
- -------------------------------------------------------
Common Units Issued in Exchange                                ---          103                                             
Dain Rauscher Wessels Reference Value per Unit                 ---      $21.026                                             
Total Value of Units Issued                                    ---       $2,161                                 2,161

Market Value of Capitalization                                                                                              
- ------------------------------
Total Value of Equity, Debt & Preferred                    $347,515                                           $371,129      
Less: Excess Cash (pre-transaction)                         (10,111)                                           (10,111)     
----------                                           --------      
Market Value of Capitalization                             $337,404                                           $361,018        7.0%
==========                                           ========   

(1) Petro historical value per share is the closing market price on 1/22/99 and
the Star pro forma value per Unit is based on the Unit Reference Value
Analysis (Dain Rauscher Wessels Case), [See Unit Reference Value Analysis
Summary on page 9].

(2) Petro value for Preferred Stock is liquidation value at September 30, 1998,
except pro forma value for the 12.88% Preferred, which is 92% of liquidation
value.

- --------------------------------------------------------------------------------
Dain Rauscher Wessels                                                    Page 25

[LOGO OF PETRO APPEARS HERE]  Historical and Pro Forma MVE and MVC Comparison 
Petro Historical and Pro Forma Adjusted MVE and 
MVC Summary
================================================================================

PROJECT INTENSE HEAT
Star Historical and Pro Forma Adjusted Market Value of Equity and Market Value
of Capitalization Summary
(In thousands, except as otherwise indicated)

Historical Market Value of Equity and         
Market Value of Capitalization           
---------------------------------------------- 
Common       Sub          Implied      Total  
Market Value of Equity               Units        Units        GP Units     Units  
- ------------------------            -------     --------       --------   --------  

Units Outstanding                    3,859        2,396            128       6,383 

Valuation per Unit (1)             $19.000       $9.500        $16.150             

Market Value of Equity             $73,321      $22,763         $2,062     $98,145 

Market Value of Capitalization                                                     
- ------------------------------                                                                                   

Market Value of Equity                                                     $98,145 

Total Debt (2)                                                             109,770 

Less: Excess Cash (2)                                                          (35)
--------           
Market Value of Capitalization                                            $207,880 
========  

Pro Forma Adjusted Market Value of Equity and                                                  
Market Value of Capitalization                                                         
------------------------------------------------                                               
Common       Sr Sub      Jr Sub / GP   Total   Percent                                      
Market Value of Equity                  Units        Units          Units      Units   Change                                       
- ------------------------             ---------     --------       --------   --------  -------                                      

Units Outstanding                      12,909        2,491            753     16,154                                    

Valuation per Unit (1)                $21.026      $16.561        $12.017                                                           

Market Value of Equity               $271,425      $41,262         $9,054   $321,742    227.8%                

Market Value of Capitalization                                                                                                      
- ------------------------------

Market Value of Equity                                                      $321,742                    

Total Debt (2)                                                               283,851                    

Less: Excess Cash (2)                                                           (536)                   
--------                   
Market Value of Capitalization                                              $605,057    191.1% 
========

(1) Star historical value per Common Unit is the closing market price on 1/22/99
and the Star value per Subordinated Unit is the value of a Common Unit less
a 25% liquidity discount and a 25% subordination discount. The value of an
implied General Partner Unit is the value of a Common Unit less a 25%
liquidity discount plus a 10% control premium. The value of each pro forma
Star Unit is based on the Unit Reference Value Analysis (Dain Rauscher
Wessels Case).

(2) Total debt and excess cash for historical is based on the Star September 30,
1998 balance sheet and for pro forma is based on the Star September 30, 1998
pro forma balance sheet.

- --------------------------------------------------------------------------------
Dain Rauscher Wessels                                                    Page 26

[LOGO OF PETRO APPEARS HERE]  Project Intense Heat
================================================================================

Discounted Cash Flow Analysis

- --------------------------------------------------------------------------------
Dain Rauscher Wessels                                                    Page 27

[LOGO OF PETRO APPEARS HERE]  Discounted Cash Flow Analysis
Petro Stand-Alone Free Cash Flow Projections 
(Unlevered)
================================================================================

PETROLEUM HEAT AND POWER CO., INC.
Stand-Alone Free Cash Flow Projections (Unlevered)
(In thousands, except as otherwise indicated)

Projected for the Year Ending December 31,     Projected for the Year Ending December 31,
---------------------------------------------   ----------------------------------------------
Estimated      15 Year Weather Case             Estimated      30 Year Weather Case           
-----------------------------------             ------------------------------------
1998E     1999E     2000E    2001E    2002E     1998E     1999E     2000E   2001E      2002E
-------   -------   -------  -------  -------   -------   -------   -------  -------  --------

Volume (gallons)                     324,667   369,707   356,249  343,852  332,333   324,667   380,161   366,323  353,575   341,730

Sales                               $408,019  $490,828  $477,965 $466,187 $455,287  $408,019  $504,120  $490,912 $478,817  $467,624
Cost of Sales                        265,526   328,642   318,786  309,754  301,400   265,526   337,106   326,993  317,724   309,151
-------   -------   -------  -------  -------   -------   -------   -------  -------  --------
Gross Profit                         142,493   162,186   159,179  156,433  153,887   142,493   167,014   163,919  161,093   158,473
Operating Expenses                   111,881   118,794   117,410  116,196  115,118   111,881   121,466   120,052  118,810   117,707
-------   -------   -------  -------  -------   -------   -------   -------  -------  --------
Heating Oil EBITDA                    30,612    43,392    41,769   40,237   38,769    30,612    45,548    43,867   42,283    40,766
MLP Distribution                       4,367       400     2,772    3,013    3,300     4,367       400     4,586    5,129     5,575
-------   -------   -------  -------  -------   -------   -------   -------  -------  --------
Total EBITDA                          34,979    43,792    44,541   43,250   42,069    34,979    45,948    48,453   47,412    46,341
Depreciation and Amortization         27,941    23,500    19,500   15,500   11,500    27,941    23,500    19,500   15,500    11,500
-------   -------   -------  -------  -------   -------   -------   -------  -------  --------
Pretax Income                          7,038    20,292    25,041   27,750   30,569     7,038    22,448    28,953   31,912    34,841
Income Tax Expense                       400       500       500      500      500       400       500       500      500       500
-------   -------   -------  -------  -------   -------   -------   -------  -------  --------
Net Income                             6,638    19,792    24,541   27,250   30,069     6,638    21,948    28,453   31,412    34,341
Plus: Depreciation and Amortization   27,941    23,500    19,500   15,500   11,500    27,941    23,500    19,500   15,500    11,500
-------   -------   -------  -------  -------   -------   -------   -------  -------  --------
Cash Flow                            $34,579   $43,292   $44,041  $42,750  $41,569   $34,579   $45,448   $47,953  $46,912   $45,841
=======   =======   =======  =======  =======   =======   =======   =======  =======  ========
Less: Maintenance Capex               (2,886)   (3,000)   (3,000)  (3,000)  (3,000)   (2,886)   (3,000)   (3,000)  (3,000)   (3,000)
-------   -------   -------  -------  -------   -------   -------   -------  -------  --------
Free Cash Flow                       $31,693   $40,292   $41,041  $39,750  $38,569   $31,693   $42,448   $44,953  $43,912   $42,841
=======   =======   =======  =======  =======   =======   =======   =======  =======  ========

- --------------------------------------------------------------------------------
Dain Rauscher Wessels                                                    Page 28

[LOGO OF PETRO APPEARS HERE]  Discounted Cash Flow Analysis
Leveraged Weighted Average Cost of Capital 
Calculation
================================================================================

PETROLEUM HEAT AND POWER CO., INC.
Leveraged Weighted Average Cost of Capital Calculation

Risk Free Rate                                         

--------
1 Year treasury bill yield (1/22/99)                                                       Risk Free Rate (Rf)         4.41%
--------
Expected Return on Equity Market                  
1 Year treasury bill yield (1/22/99)                                                                       Rf          4.41%
Historical spread between equity returns and 1-year treasury 
bill yield (Ibbotson Associates)                                                                           S          7.00%
--------
Expected Return on Equity Market (Rm) = Rf+S         11.41%
--------
Cost of Debt                                      
Long-term debt interest rate (Petro estimate)                                                              Ir         13.00%
Corporate tax rate                                                                                          t         35.00%
--------
Cost of Debt (Cd) = Ir*(1-t)           8.45%
--------
Unleveraged Beta                                  
--------
Unleveraged beta (Dain Rauscher Wessels estimate)                                        Unleveraged Beta (Ub)         1.25
--------

Leveraged Beta                                    
Target long-term debt / total capitalization                                                               Td         60.00%
Target long-term equity / total capitalization                                                             Te         40.00%
Debt / equity ratio                                                                                        De        150.00%
--------
Leveraged Beta (B) = Ub*[1+t)*De]             2.47
--------
Unleveraged Cost of Equity                        
Risk free rate                                                                                             Rf          4.41%
Expected return on equity market                                                                           Rm         11.41%
Unleveraged beta                                                                                           Ub          1.25
--------
Unleveraged Cost of Equity = Rf+Ub(Rm-Rf)        13.16%
--------
Leveraged Cost of Equity                          
Risk free rate                                                                                             Rf          4.41%
Expected return on equity market                                                                           Rm         11.41%
Leveraged beta                                                                                              B          2.47
--------
Leveraged Cost of Equity (Ceu) = Rf+B(Rm-Rf)        21.69%
--------
Leveraged Weighted Average Cost of Capital        
Target long-term debt / total capitalization                                                               Td         60.00%
Target long-term equity / total capitalization                                                             Te         40.00%
Leveraged cost of equity                                                                                  Ceu         21.69%
Cost of debt                                                                                               Cd          8.45%
--------
Leveraged Weighted Average Cost of Capital (WACC) = (Td*(d)+(Te*Ceu)         13.74%
--------

- --------------------------------------------------------------------------------
Dain Rauscher Wessels                                                    Page 29

[LOGO OF PETRO APPEARS HERE]  Discounted Cash Flow Analysis
Petro Stand-Alone Discounted Cash Flow Analysis
(15 Year Weather Case)
================================================================================

PETROLEUM HEAT AND POWER CO., INC.
Stand-Alone Discounted Cash Flow Analysis (15 Year Weather Case)
(In thousands, except as otherwise indicated)

Less: Total                       
Terminal              Debt & Pref.               Total   
Projected for the Year Ending December 31,    Value      Total       Plus:        Total     Equity   
----------------------------------------------  @ 7.0 x    Enterprise    Working      Equity    Value per
1999E     2000E        2001E       2002E         EBITDA     Value      Capital (1)   Value     Share (2)
-------   --------     -------     -------     --------   ---------    -----------  --------  ---------

Unlevered Free Cash Flow    $40,292    $41,041     $39,750     $38,569     $294,483                            
Period                         0.50       1.50        2.50        3.50         4.00                            

Discounted Cash Flow                                                                                           
@ 12.0%                     $38,072    $34,625     $29,943     $25,940     $187,149    $315,730   ($310,941)     $4,789     $0.18

@ 13.0%                     $37,904    $34,166     $29,285     $25,146     $180,612    $307,112   ($310,941)    ($3,829)   ($0.14)
- -----------------------------------------------------------------------------------------------------------------------------------
@ 14.0%                     $37,737    $33,718     $28,647     $24,382     $174,358    $298,841   ($310,941)   ($12,100)   ($0.46)
- -----------------------------------------------------------------------------------------------------------------------------------
@ 15.0%                     $37,572    $33,279     $28,028     $23,648     $168,372    $290,899   ($310,941)   ($20,042)   ($0.76)

@ 16.0%                     $37,410    $32,850     $27,428     $22,942     $162,640    $283,270   ($310,941)   ($27,671)   ($1.05)

- -----------------
(1) Total debt, preferred stock and working capital at September 30, 1998.

(2) Per share numbers are based upon shares outstanding of 26,463.

- --------------------------------------------------------------------------------
Dain Rauscher Wessels                                                    Page 30

[LOGO OF PETRO APPEARS HERE]  Discounted Cash Flow Analysis
Petro Stand-Alone Discounted Cash Flow Analysis
(30 Year Weather Case)
================================================================================

PETROLEUM HEAT AND POWER CO., INC.
Stand-Alone Discounted Cash Flow Analysis (30 Year Weather Case)
(In thousands, except as otherwise indicated)

Less: Total                       
Terminal              Debt & Pref.               Total   
Projected for the Year Ending December 31,    Value      Total       Plus:        Total     Equity   
----------------------------------------------  @ 7.0 x    Enterprise    Working      Equity    Value per
1999E     2000E        2001E       2002E         EBITDA     Value      Capital (1)   Value     Share (2)
-------   --------     -------     -------     --------   ---------    -----------  --------  ---------

Unlevered Free Cash Flow    $42,448    $44,953     $43,912     $42,841     $324,387
Period                         0.50       1.50        2.50        3.50         4.00

Discounted Cash Flow                                                       
- --------------------
@ 12.0%                     $40,110    $37,926     $33,078     $28,814     $206,154   $346,080     ($310,941)    $35,139      $1.33

@ 13.0%                     $39,932    $37,423     $32,351     $27,931     $198,953   $336,589     ($310,941)    $25,648      $0.97
- -----------------------------------------------------------------------------------------------------------------------------------
@ 14.0%                     $39,756    $36,932     $31,646     $27,083     $192,063   $327,480     ($310,941)    $16,539      $0.62
- -----------------------------------------------------------------------------------------------------------------------------------
@ 15.0%                     $39,583    $36,451     $30,963     $26,267     $185,469   $318,734     ($310,941)     $7,793      $0.29

@ 16.0%                     $39,412    $35,981     $30,300     $25,483     $179,156   $310,332     ($310,941)      ($609)    ($0.02)

- --------------------
(1) Total debt, preferred stock and working capital at September 30, 1998.
(2) Per share numbers are based upon shares outstanding of 26,463.

- --------------------------------------------------------------------------------
Dain Rauscher Wessels                                                    Page 31

[LOGO OF PETRO  APPEARS HERE]   Discounted Cash Flow Analysis
Stand-Alone Discounted Cash 
Flow Analysis Matrix
===============================================================================

PETROLEUM HEAT AND POWER CO., INC. 
Stand-Alone Discounted Cash Flow Analysis Matrix 
(In thousands, except as otherwise indicated)

Terminal Value Multiples (EBITDA)
----------------------------------------------------------------------------      
15 Year Weather Case                    30 Year Weather Case
------------------------------------------    -------------------------- 

Discounted Cash Flow         6.0 x            7.0 x           8.0 x      6.0 x     7.0 x     8.0 x
- --------------------      -----------        ---------        -------    --------  --------- -------
@ 12.0%                   ($0.83)           $0.18          $1.19       $0.21     $1.33     $2.44

@ 13.0%                   ($1.12)          ($0.14)         $0.83      ($0.10)    $0.97     $2.04

@ 14.0%                   ($1.40)          ($0.46)         $0.48      ($0.41)    $0.62     $1.66

@ 15.0%                   ($1.67)          ($0.76)         $0.15      ($0.71)    $0.29     $1.30

@ 16.0%                   ($1.92)          ($1.05)        ($0.17)     ($0.99)   ($0.02)    $0.94

- -----------------
Note: Per share numbers are based upon shares outstanding of 26,463.

- ------------------------------------------------------------------------------- 
Dain Rauscher Wessels                                                   Page 32

[LOGO OF PETRO APPEARS HERE] Project Intense Heat
===============================================================================

Relative Contribution Analysis

- -------------------------------------------------------------------------------
Dain Rauscher Wessels                                                  Page 33

[LOGO OF PETRO APPEARS HERE] Relative Contribution Analysis 
(Not Adjusted for Pro Forma Unit 
Class Value Difference)
===============================================================================
PROJECT INTENSE HEAT
Relative Contribution Analysis 
(Not Adjusted for Pro Forma Unit Class Value Difference)
(In thousands, except as otherwise indicated)

Projected for the Year Ending September 30,
------------------------------------------ 
15 Year Weather
---------------------------
Normalized       Estimated      Normalized
Star Stand-Alone Distributable Cash Flow            1998E            1999E          1999E
- ----------------------------------------           --------        ---------      ----------

EBITDA                                             $22,316         $20,093        $22,674   
Interest Expense                                    (8,497)         (8,515)        (8,515)  
Maintenance Capex                                   (2,610)         (2,553)        (2,553)  
Other                                                  (25)            (25)           (25)  
--------        ---------      ----------
Distributable Cash Flow                            $11,184         $ 9,000        $11,581   

Distribution to Star Common                                                                 
- ----------------------------------------                                                    
Cash Distribution to Star Common Units             $ 8,490         $ 8,490        $ 8,490   
Distribution per Common Unit                       $  2.20         $  2.20        $  2.20   
Weighted Avg. Star Common Units Outstanding          3,859           3,859          3,859   

Distribution to Star Sub Units (Petro)                                                      
- ----------------------------------------                                                    
Cash Distribution to Star Sub Units                $ 2,694            $510        $ 3,091   
Weighted Avg. Star Sub Units Outstanding             2,396           2,396          2,396   
Cash Distribution per Star Sub Unit                $  1.12         $  0.21        $  1.29   

Petro Distributable Cash Flow                                                               
- ----------------------------------------                                                    
EBITDA                                             $44,749         $43,613        $45,013   
Pro Forma Synergies                                    500             500            500   
Preferred Dividends                                 (5,026)         (4,432)        (4,432)  
Interest Expense                                   (30,732)        (30,470)       (30,470)  
Maintenance Capex                                   (2,886)         (3,000)        (3,000)  
Taxes                                                 (400)           (500)          (500)  
--------        ---------      ----------
Distributable Cash Flow                            $ 6,205          $5,711         $7,111
Cash Distribution to Star Sub Units                  2,694             510          3,091   
--------        ---------      ----------
Total Distributable Cash Flow                      $ 8,899        $  6,221        $10,202   
========        ==========     ==========
Star Pro Forma Units Outstanding                                                            
- ----------------------------------------                                                    
Star                                                 3,859           3,859          3,859   
Petro                                                3,245           3,245          3,245   
--------        ---------      ----------
Total Units                                          7,104           7,104          7,104

Star Relative Contribution                        
- ----------------------------------------          
Distributable Cash Flow Contribution                  48.8%           57.7%          45.4%
Percent of Pro Forma Units Received                   54.3%           54.3%          54.3%

Petro Relative Contribution                       
- ----------------------------------------          
Distributable Cash Flow Contribution                  51.2%           42.3%          54.6%
Percent of Pro Forma Units Received                   45.7%           45.7%          45.7%

- ------------------------------------------------------------------------------- 
Dain Rauscher Wessels                                                   Page 34

[LOGO OF PETRO APPEARS HERE] Relative Contribution Analysis
(Adjusted for Pro Forma Unit 
Class Value Difference)
===============================================================================
PROJECT INTENSE HEAT 
Relative Contribution Analysis 
(Adjusted for Pro Forma Unit Class Value Difference) 
(In thousands, except as otherwise indicated)

Projected for the Year Ending September 30,
------------------------------------------------
15 Year Weather
--------------------------------
Normalized       Estimated      Normalized
Star Stand-Alone Distributable Cash Flow                     1998E            1999E           1999E
- -----------------------------------------------------------  ----------      -------------    --------------- 

EBITDA                                                          $22,316           $20,093          $22,674
Interest Expense                                                ($8,497)           (8,515)          (8,515)
Maintenance Capex                                               ($2,610)           (2,553)          (2,553)
Other                                                               (25)              (25)             (25)
---------          --------        -------- 
Distributable Cash Flow                                         $11,184            $9,000          $11,581

Distribution to Star Common                                                    
- -----------------------------------------------------------  
Cash Distribution to Star Common Units                           $8,490            $8,490           $8,490
Distribution per Common Unit                                      $2.20             $2.20            $2.20
Weighted Avg. Star Common Units Outstanding                       3,859             3,859            3,859

Distribution to Star Sub Units (Petro)                                         
- -----------------------------------------------------------  
Cash Distribution to Star Sub Units                              $2,694              $510           $3,091
Weighted Avg. Star Sub Units Outstanding                          2,396             2,396            2,396
Cash Distribution per Star Sub Unit                               $1.12             $0.21            $1.29

Petro Distributable Cash Flow                                                  
- -----------------------------------------------------------  
EBITDA                                                          $44,749           $43,613          $45,013
Pro Forma Synergies                                                 500               500              500
Preferred Dividends                                              (5,026)           (4,432)          (4,432)
Interest Expense                                                (30,732)          (30,470)         (30,470)
Maintenance Capex                                                (2,886)           (3,000)          (3,000)
Taxes                                                              (400)             (500)            (500)
---------          --------        --------  
Distributable Cash Flow                                          $6,205            $5,711           $7,111
Cash Distribution to Star Sub Units                              $2,694            $  510           $3,091
---------          --------        -------- 
Total Distributable Cash Flow                                    $8,899            $6,221          $10,202
=========          ========        ======== 
Pro Forma Unit Class Value Adjustment                                          
- -----------------------------------------------------------  
Pro Forma Senior Subordinated Units                               2,491             2,491            2,491
Senior Subordinated / Common Unit Value Ratio (1)                  0.79              0.79             0.79
Adjusted Senior Subordinated Units                                1,962             1,962            1,962
Pro Forma Junior Subordinated & GP Units                            753               753              753
Junior Subordinated & GP / Common Unit Value Ratio (1)             0.57              0.57             0.57
Adjusted Junior Subordinated & GP Units                             431               431              431
Total Star Units Received by Petro (Value Adjusted)               2,393             2,393            2,393

Star Pro Forma Units Outstanding                                               
- -----------------------------------------------------------  
Star                                                              3,859             3,859            3,859
Petro (Adjusted)                                                  2,393             2,393            2,393
---------          --------        --------   
Total Units                                                       6,252             6,252            6,252

Star Relative Contribution                                                     
- -----------------------------------------------------------  
Distributable Cash Flow Contribution                              48.8%             57.7%            45.4%
Percent of Pro Forma Units Received                               61.7%             61.7%            61.7%

Petro Relative Contribution                                                    
- -----------------------------------------------------------  
Distributable Cash Flow Contribution                              51.2%             42.3%            54.6%
Percent of Pro Forma Units Received                               38.3%             38.3%            38.3%
- ----------------

(1) Value ratio is based on the Dain Rauscher Wessels Case.
- --------------------------------------------------------------------------------
Dain Rauscher Wessels                                                   Page 35

[LOGO OF PETRO APPEARS HERE] Project Intense Heat

================================================================================

Net Asset Value Analysis

- --------------------------------------------------------------------------------
Dain Rauscher Wessels                                                   Page 36

[LOGO OF PETRO APPEARS HERE]   Net Asset Value Analysis
Home Heating Oil Business Valuation
================================================================================
PETROLEUM HEAT AND POWER CO., INC.
Home Heating Oil Business Valuation
(In thousands, except as otherwise indicated)

Method 1                                           Method 2                                       
- -----------------------------------------          -------------------------------------------     

Petro 1998E Normalized EBITDA (1) $44,749          Petro 1998E Normalized Gallons      384,390    
Mean EBITDA Multiple                4.2 x          Mean Acquisition Cost per Gallon      $0.84    
Total Enterprise Value           $187,946          Total Enterprise Value             $322,888    
Petro Size Premium                  10.0%          Petro Size Premium                    10.0%    
Total Adjusted Enterprise Value  $206,740          Total Adjusted Enterprise Value    $355,176    

Methodology                         Petro          Methodology                           Petro    
Acquisitions                                        Acquisitions     
1996-1997                                           1996-1997     
Ten Largest                                         Ten Largest     

Method 3                                                      
- -------------------------------------------------------------  
Petro 1998E Forecasted Customers                     335,000  
Mean Acquisition Cost per Customer                    $1,194  
Total Enterprise Value                              $399,990  
Petro Size Premium                                     10.0%  
Total Adjusted Enterprise Value                     $439,989  

Methodology                                            Petro  
Acquisitions  
1996-1997  
Ten Largest   

Method 4                                           Method 5                                       
- -----------------------------------------          -------------------------------------------     
Petro 1998E Normalized EBITDA (1) $44,749          Petro LTM 12/31/98 EBITDA (1)      $30,612     
Mean EBITDA Multiple                6.1 x          Mean EBITDA Multiple                11.0 x     
Total Enterprise Value            272,969          Total Enterprise Value            $336,732     
Petro Size Premium                  10.0%                                                         
Total Adjusted Enterprise Value  $300,266                                                         

Methodology                      Star Gas          Methodology                Selected Energy     
Acquisitions                                         Marketing &     
1994-1998                                        Distribution     
M&A Analysis     

Method 6
- -------------------------------------------------------------            
Petro LTM 12/31/98 EBITDA (1)                        $30,612
Consolidator Growth Rate Factor                         66.3
Petro EBITDA CAGR (2)                                   6.3%
Implied EBITDA Multiple                                4.2 x
Total Enterprise Value                              $127,863

Methodology                                         Selected
Industry
Consolidators

- --------------------------
(1) Excludes Star Gas distributions.
(2) Petro EBITDA compound annual growth rate (CAGR)from 1999E to 2002E, 
assuming 15 year weather and $15.0 million of acquisitions in 1999E and
$25.0 million per year thereafter.
- -------------------------------------------------------------------------------
Dain Rauscher Wessels                                                  Page 37

[LOGO OF PETRO APPEARS HERE] Net Asset Value Analysis
Net Asset Value Summary
===============================================================================
PETROLEUM HEAT AND POWER CO., INC.
Net Asset Value Summary
(In thousands, except as otherwise indicated)             

Home Heating Oil Business                                 Method 1           Method 2        Method 3       Method 4 
- ----------------------------------------------------     ----------        -----------      ----------    ----------- 

Total Enterprise Value (See Previous Page)                 $206,740         $355,176        $439,989       $300,266

Investment in Star                                                                                                       
- ----------------------------------------------------
Total Subordinated Units                                      2,396            2,396           2,396          2,396      
Implied GP Units                                                128              128             128            128      
Total Implied Units                                           2,524            2,524           2,524          2,524      
Current Common Unit Price 01/22/99                          $19.000          $19.000         $19.000        $19.000      
Subordinated Unit Discount                                      50%              50%             50%            50%      
Implied GP Unit Discount                                        15%              15%             15%            15%      
Value per Subordinated Unit                                   $9.50            $9.50           $9.50          $9.50      
Value per Implied GP Unit                                    $16.15           $16.15          $16.15         $16.15      
Total Value of Investment in Star                           $24,824          $24,824         $24,824        $24,824      

GROSS ASSET VALUE                                          $231,565         $380,001        $464,813       $325,090      

Principal Amount of Debt at 9/30/98                                                                                      
- ---------------------------------------------------- 
11.96% Senior Notes                                         $60,000          $60,000         $60,000        $60,000      
14.10% Senior Notes                                           3,100            3,100           3,100          3,100      
14.10% Subordinated Notes                                     3,100            3,100           3,100          3,100      
10.13% Subordinated & Senior Subordinated Notes              50,000           50,000          50,000         50,000      
9.38% Subordinated & Senior Subordinated Notes               75,000           75,000          75,000         75,000      
12.25% Subordinated & Senior Subordinated Notes              81,250           81,250          81,250         81,250      
8.00% Acq. & Other Notes                                     14,435           14,435          14,435         14,435      
8.25% Existing Credit Facility                                    0                0               0              0      
----------        -----------      ----------    -------
Total Principal Amount of Debt                             $286,885         $286,885        $286,885       $286,885      

Liquidation Value of Preferred Stock at 9/30/98                                                                          
- ---------------------------------------------------- 
14.33% Preferred Stock                                       $4,167           $4,167          $4,167         $4,167      
12.88% Preferred Stock                                       30,000           30,000          30,000         30,000      
----------        -----------      ----------    -------
Total Liquidation Value of Preferred Stock                  $34,167          $34,167         $34,167        $34,167      

Prepayment Penalties & Other Liabilities                                                                                 
- ----------------------------------------------------  
Prepayment Penalties on Outstanding Debt (1)                $22,951          $22,951         $22,951        $22,951      
Other Long-Term Liabilities                                  10,686           10,686          10,686         10,686      
Working Capital & Cash Escrow Adjustment                    (10,111)         (10,111)        (10,111)       (10,111)     
Liquidation Transaction Costs                                 5,000            5,000           5,000          5,000      
----------        -----------      ----------    -------
Total Prepayment Penalties & Other Liabilities              $28,526          $28,526         $28,526        $28,526      
----------        -----------      ----------    -------
NET ASSET VALUE (2)                                              $0          $30,423        $115,236             $0      
==========        ===========      ==========    =======
NET ASSET VALUE PER SHARE                                     $0.00            $1.15           $4.35          $0.00      
==========        ===========      ==========    =======
TOTAL SHARES OUTSTANDING                                     26,463           26,463          26,463         26,463      

Home Heating Oil Business                                 Method 5       Method 6         Mean        Median
- ----------------------------------------------------    -------------  ------------      --------    ----------

Total Enterprise Value (See Previous Page)                   $336,732    $127,863

Investment in Star                                                       
- ----------------------------------------------------  
Total Subordinated Units                                        2,396       2,396  
Implied GP Units                                                  128         128  
Total Implied Units                                             2,524       2,524  
Current Common Unit Price 01/22/99                            $19.000     $19.000  
Subordinated Unit Discount                                        50%         50%  
Implied GP Unit Discount                                          15%         15%  
Value per Subordinated Unit                                     $9.50       $9.50  
Value per Implied GP Unit                                      $16.15      $16.15  
Total Value of Investment in Star                             $24,824     $24,824  

GROSS ASSET VALUE                                            $361,556    $152,688  

Principal Amount of Debt at 9/30/98                                                
- ----------------------------------------------------  
11.96% Senior Notes                                           $60,000     $60,000  
14.10% Senior Notes                                             3,100       3,100  
14.10% Subordinated Notes                                       3,100       3,100  
10.13% Subordinated & Senior Subordinated Notes                50,000      50,000  
9.38% Subordinated & Senior Subordinated Notes                 75,000      75,000  
12.25% Subordinated & Senior Subordinated Notes                81,250      81,250  
8.00% Acq. & Other Notes                                       14,435      14,435  
8.25% Existing Credit Facility                                      0           0  
---------     --------   
Total Principal Amount of Debt                               $286,885    $286,885  

Liquidation Value of Preferred Stock at 9/30/98                                    
- ----------------------------------------------------  
14.33% Preferred Stock                                         $4,167      $4,167  
12.88% Preferred Stock                                         30,000      30,000  
---------     --------   
Total Liquidation Value of Preferred Stock                    $34,167     $34,167  

Prepayment Penalties & Other Liabilities                                           
- ----------------------------------------------------  
Prepayment Penalties on Outstanding Debt (1)                  $22,951     $22,951  
Other Long-Term Liabilities                                    10,686      10,686  
Working Capital & Cash Escrow Adjustment                      (10,111)    (10,111) 
Liquidation Transaction Costs                                   5,000       5,000  
---------     --------   
Total Prepayment Penalties & Other Liabilities                $28,526     $28,526  
---------     --------   
NET ASSET VALUE (2)                                           $11,979          $0  
=========     ========         ------     ------
NET ASSET VALUE PER SHARE                                       $0.45       $0.00          $0.99      $0.23
=========     =======          ------     ------
TOTAL SHARES OUTSTANDING                                       26,463      26,463  
Excluding Method 3
------------------
$0.32      $0.00

(1) Assumes all debt is prepaid at 108% of par.       
(2) Due to a common stockholders' limited liability, the lowest net 
asset value possible is zero.
- --------------------------------------------------------------------------------
Dain Rauscher Wessels                                                  Page 38

[LOGO OF PETRO APPEARS HERE]  Project Intense Heat
================================================================================

Comparable Company Trading Analysis

Energy and Fuel Marketing and Distribution Companies

Getty Petroleum Marketing Inc.                Streicher Mobile Fueling, Inc.
Meteor Industries, Inc.                       TransMontaigne Inc.
Midcoast Energy Resources, Inc.               World Fuel Services Corporation

- -------------------------------------------------------------------------------
Dain Rauscher Wessels                                                  Page 39

[LOGO OF PETRO APPEARS HERE]  Energy and Fuel Marketing and Distribution 
Companies 
Market Value of Equity to Latest Twelve
Months Net Income from Operations

=========================================================================================
[BAR GRAPH APPEARS HERE]

Trans-       Midcoast     Meteor     World      Getty      Streicher   Mean    Petroleum
Montaigne      Energy    industries   Fuel     Petroleum     Mobile             Heat and
Resources              Services  Marketing     Fueling            Power Co.
- ----------------------------------------------------------------------------------------

29.3x         14.1x       10.8x      8.7x       NM          NM       15.7x      NM
- ----------------------------------------------------------------------------------------

- -----------------------
Note: Market data as of 1/22/99.
Source: Factset Data Systems and publicly available information.
- --------------------------------------------------------------------------------
Dain Rauscher Wessels                                                   Page 40

[LOGO OF PETRO APPEARS HERE]  Energy and Fuel Marketing and Distribution 
Companies 
Market Value of Equity to Latest Twelve Months Net
Income from Operations

========================================================================================
[BAR GRAPH APPEARS HERE]

Trans-       Midcoast     Meteor     World    Getty      Streicher   Mean    Petroleum
Montaigne      Energy    industries   Fuel    Petroleum     Mobile            Heat and
Resources             Services  Marketing    Fueling            Power Co.
(1)
- ----------------------------------------------------------------------------------------

12.1x         10.0x        6.4x      6.4x       3.8x        NM        7.7x      14.7x
- ----------------------------------------------------------------------------------------

___________________
Note: Market data as of 1/22/99.
Source: Factset Data Systems and publicly available information.
(1) Petro latest twelve months cash flow from operations includes Star Gas 
distributions.
- --------------------------------------------------------------------------------
Dain Rauscher Wessels                                                    Page 41

[LOGO OF PETRO APPEARS HERE] Energy and Fuel Marketing and Distribution
Companies 
Market Value of Equity to Tangible Book Value of
Equity

========================================================================================
[BAR GRAPH APPEARS HERE]

Trans-       Midcoast   Streicher    Meteor     World    Getty       Mean    Petroleum
Montaigne      Energy      Mobile   industries   Fuel    Petroleum            Heat and
Resources   Fueling              Services  Marketing            Power Co.
(1)
- ----------------------------------------------------------------------------------------

2.1x          1.9x        1.9x      1.6x       1.6x        0.7X      1.6x       NM   
- ----------------------------------------------------------------------------------------

- -----------------------
Note: Market data as of 1/22/99.
Source: Factset Data Systems and publicly available information.
- --------------------------------------------------------------------------------
Dain Rauscher Wessels                                                    Page 42

[LOGO OF PETRO APPEARS HERE] Energy and Fuel Marketing and Distribution
Companies 
Market Value of Capitalization to Latest Twelve
Months Revenues
===============================================================================

[THE FOLLOWING IS REPRESENTED BY A BAR GRAPH]

Midcoast     Streicher     Meteor       Trans-      World       Getty        Mean      Petroleum
Energy        Mobile     Industries   Montaigne    Fuel      Petroleum                 Heat and
Resources      Fueling                             Services   Marketing                 Power Co.

0.9x            0.4x        0.2x        0.2x        0.2x        0.1x         0.3x        0.7x

___________________________
Note:  Market data as of 1/22/99.
Source:  Factset Data Systems and publicly available information.

===============================================================================
Dain Rauscher Wessels                                                   Page 43

[LOGO OF PETRO APPEARS HERE] Energy and Fuel Marketing and Distribution
Companies 
Market Value of Capitalization to Latest
Twelve Months EBITDA

================================================================================================
[BAR GRAPH APPEARS HERE]

Streicher     Midcoast    Trans-       Meteor       World        Getty        Mean    Petroleum
Mobile       Energy    Montaigne   industries     Fuel       Petroleum              Heat and
Fueling      Resources                            Services    Marketing              Power Co.
(1)
- -------------------------------------------------------------------------------------------------

23.9x        12.9x       11.4x         5.7x        5.1x         3.8x        10.5x       8.3x 
- -------------------------------------------------------------------------------------------------

Note: Market data as of 1/22/99.
Source: Factset Data Systems and publicly available information.
(1) Petro latest twelve months EBITDA includes Star Gas distributions and 
excludes non-recurring expenses.
- -------------------------------------------------------------------------------
Dain Rauscher Wessels                                                   Page 44

[LOGO OF PETRO APPEARS HERE] Energy and Fuel Marketing and Distribution
Companies 
Market Value of Capitalization to Latest Twelve
Months EBIT

========================================================================================
[BAR GRAPH APPEARS HERE]

Trans-       Midcoast     Meteor     World    Getty      Streicher   Mean   Petroleum
Montaigne      Energy    industries   Fuel    Petroleum     Mobile           Heat and
Resources             Services  Marketing    Fueling           Power Co.
(1)
- ----------------------------------------------------------------------------------------

15.9x        15.8x        7.9x      5.7x       NM          NM       11.3x       NM 
- ----------------------------------------------------------------------------------------

_______________________
Note: Market data as of 1/22/99.
Source: Factset Data Systems and publicly available information.
- -------------------------------------------------------------------------------
Dain Rauscher Wessels                                                   Page 45

[LOGO OF PETRO APPEARS HERE]  Project Intense Heat
================================================================================
Comparable Company Trading Analysis
Propane Master Limited Partnerships

Amerigas Partners, L.P.                      Heritage Propane Partners, L.P.
Cornerstone Propane Partners, L.P.           Suburban Propane Partners, L.P.
Ferrellgas Partners, L.P.
- -------------------------------------------------------------------------------
Dain Rauscher Wessels                                                   Page 46

[LOGO OF PETRO APPEARS HERE] Propane Master Limited Partnerships
Percentage of 52 Week High Common Unit Price

===============================================================================
[BAR GRAPH APPEARS HERE]

Suburban   Heritage   Amerigas  Ferrellgas Cornerstone   Mean   Star Gas   Star Gas
Propane    Propane    Partners   Partners   Propane             Partners   Partners
Partners   Partners                        Partners            (current)  (1 day prior)
(1)
- ----------------------------------------------------------------------------------------

96.9%      94.4%      90.7%      86.8%      78.1%       89.4%    76.8%       85.1%

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

Note: Market data as of 1/22/99.
Source: Factset Data Systems.
(1) Percentage of 52 week high one day prior to announcement of merger on August
13, 1998.
- --------------------------------------------------------------------------------
Dain Rauscher Wessels                                                    Page 47

[LOGO OF PETRO APPEARS HERE] Propane Master Limited Partnerships
Current Yield

==================================================================================================
[BAR GRAPH APPEARS HERE] 

Cornerstone Suburban  Ferrellgas  Amerigas   Heritage      Mean     Star Gas   Star Gas
Propane     Propane   Partners   Partners   Propane                  Partners   Partners
Partners   Partners                        Partners                  ($2.20     ($2.30
per Unit)   per Unit)
- --------------------------------------------------------------------------------------------------- 

11.8%        10.3%     10.1%     9.0%       8.9%           10.0%     11.6%       12.1%
- --------------------------------------------------------------------------------------------------- 

Note: Market data as of 1/22/99.
Source: Factset Data Systems and publicly available information.
- -------------------------------------------------------------------------------
Dain Rauscher Wessels                                                   Page 48

[LOGO OF PETRO APPEARS HERE] Propane Master Limited Partnerships
Historical Yields
==============================================================================
[LINE GRAPH APPEARS HERE]

Source: Factset Data Systems and publicly available information.

- ------------------------------------------------------------------------------
Dain Rauscher Wessels                                                  Page 49

[LOGO OF PETRO APPEARS HERE]  Propane Master Limited Partnerships
Historical Yields vs. 10-Year Treasury

==============================================================================
[LINE GRAPH APPEARS HERE]

Source: Factset Data Systems and publicly available information.
(1) Peer group includes Amerigas Partners, Cornerstone Propane Partners,
Ferrellgas Partners, Heritage Propane Partners and Suburban Propane
Partners.
- ------------------------------------------------------------------------------
Dain Rauscher Wessels                                                  Page 50

[LOGO OF PETRO APPEARS HERE]   Propane Master Limited Partnerships
Yield Spread to Treasury
==============================================================================
[LINE GRAPH APPEARS HERE]

Source: Factset Data Systems and publicly available information.
(1) Peer group includes Amerigas Partners, Cornerstone Propane Partners,
Ferrellgas Partners, Heritage Propane Partners and Suburban Propane
Partners.
- ------------------------------------------------------------------------------
Dain Rauscher Wessels                                                  Page 51

[LOGO OF PETRO APPEARS HERE] Propane Master Limited Partnerships
Adjusted Market Value of Capitalization (1)

==============================================================================
In Millions
[BAR GRAPH APPEARS HERE]

Amerigas  Ferrellgas  Suburban Cornerstone  Heritage  Mean  Star Gas   Star Gas
Partners   Partners   Propane   Propane     Propane         Partners   Partners
Partners  Partners    Partners        Historical Pro Forma
(2)        (2)
- ---------------------------------------------------------------------------------

$1,593     $1,108      $907       $508       $370     $897    $208      $605     
- ---------------------------------------------------------------------------------

- ---------------------------
Note: Market data as of 1/22/99.
Source: Factset Data Systems, publicly available information and Petroleum 
Heat and Power Co., Inc.
(1) Adjusted Market Value of Capitalization (MVC) is defined as adjusted market
value of equity (common units multiplied by current common unit price, plus
subordinated units multiplied by current common unit price less a 25%
liquidity discount and a 10% subordination discount, plus implied GP units
multiplied by current common unit price less a 25% liquidity discount plus a
10% control premium) plus book value of total debt, less cash and
equivalents in excess of a 1.0 working capital ratio.
(2) Adjusted MVC for Star Gas historical is calculated based upon the definition
above, less an additional 15% subordination discount on subordinated units.
The adjusted MVC for Star Gas pro forma is based upon the Unit Reference
Value Analysis (Dain Rauscher Wessels Case), [See Unit Reference Value
Analysis on page 9].
- --------------------------------------------------------------------------------
Dain Rauscher Wessels                                                    Page 52

[LOGO APPEARS HERE] Propane Master Limited Partnerships
Adjusted Market Value of Capitalization(1)
to Latest Twelve Months EBITDA

==============================================================================
[BAR GRAPH APPEARS HERE]

Cornerstone  Ferrellgas    Amerigas    Heritage    Suburban    Mean   Star Gas
Propane      Partners      Partners    Propane     Propane            Partners
Partners                               Partners    Partners           Historical
(2)
- --------------------------------------------------------------------------------

11.0x         11.0x       10.6x        9.8x          9.0x     10.3x     11.0x
- --------------------------------------------------------------------------------

Note: Market data as of 1/22/99.
Source: Factset Data Systems and publicly available information.
(1) Adjusted Market Value of Capitalization (MVC) is defined as adjusted 
market value of equity (common units multiplied by current common unit
price, plus subordinated units multiplied by current common unit price less
a 25% liquidity discount and a 10% subordination discount, plus implied GP
units multiplied by current common unit price less a 25% liquidity discount
plus a 10% control premium) plus book value of total debt, less cash and
equivalents in excess of a 1.0 working capital ratio. 
(2) Adjusted MVC for Star Gas historical is calculated based upon the definition
above, less an additional 15% subordination discount on subordinated units.
- ------------------------------------------------------------------------------
Dain Rauscher Wessels                                                 Page 53

[LOGO OF PETRO APPEARS HERE] Propane Master Limited Partnerships
Adjusted Market Value of Equity(1)
to Latest Twelve Months Cash Flow from
Operations

==============================================================================
Amerigas   Cornerstone  Ferrellgas    Heritage    Suburban   Mean   Star Gas
Partners     Propane    Partners     Propane      Propane           Partners
Partners                Partners     Partners          Historical
(2)
- ------------------------------------------------------------------------------

10.7x        9.5x        8.9x        7.5x           7.2x     8.7x     8.8x

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

Note: Market data as of 1/22/99.
Source: Factset Data Systems and publicly available information.
(1) Adjusted Market Value of Equity (MVE) is defined common units multiplied by
current common unit price, plus subordinated units multiplied by current
common unit price less a 25% liquidity discount and a 10% subordination
discount, plus implied GP units multiplied by current common unit price less
a 25% liquidity discount plus a 10% control premium.
(2) Adjusted MVE for Star Gas historical is calculated based upon the definition
above, less an additional 15% subordination discount on subordinated units.
- ------------------------------------------------------------------------------
Dain Rauscher Wessels                                                  Page 54

[LOGO OF PETRO APPEARS HERE] Propane Master Limited Partnerships
Total Debt to Adjusted Market Value of 
Capitalization (1)

==============================================================================
[BAR CHART APPEARS HERE]

Suburban  Ferrellgas   Heritage  Cornerstone Amerigas  Mean  Star Gas   Star Gas
Propane   Partners     Propane   Propane     Partners        Partners   Partners
Partners               Partners  Partners                    Historical Pro Forma
(2)        (2)
- ----------------------------------------------------------------------------------

55.5%     53.6%        53.6%     51.8%        45.1%    51.9%    52.8%     46.9%
- ----------------------------------------------------------------------------------

Note: Market data as of 1/22/99.
Source: Factset Data Systems, publicly available information and Petroleum 
Heat and Power Co., Inc.
(1) Adjusted Market Value of Capitalization (MVC) is defined as adjusted 
market value of equity (common units multiplied by current common unit price,
plus subordinated units multiplied by current common unit price less a 25%
liquidity discount and a 10% subordination discount, plus implied GP units
multiplied by current common unit price less a 25% liquidity discount plus a 10%
control premium) plus book value of total debt, less cash and equivalents in
excess of a 1.0 working capital ratio.
(2) Adjusted MVC for Star Gas historical is calculated based upon the 
definition above, less an additional 15% subordination discount on subordinated
units. The adjusted MVC for Star Gas pro forma is based upon the Unit Reference
Value Analysis (Dain Rauscher Wessels Case), [See Unit Reference Value Analysis
on page 9].
- -------------------------------------------------------------------------------
Dain Rauscher Wessels                                                  Page 55

[LOGO OF PETRO APPEARS HERE] Propane Master Limited Partnerships
Total Debt to Total Book Capitalization

==============================================================================
[BAR CHART APPEARS HERE]

Ferrellgas   Heritage   Suburban  Amerigas   Cornerstone Mean  Star Gas   Star Gas
Partners     Propane    Propane   Partners   Propane           Partners   Partners
Partners   Partners             Partners          Historical  Pro Forma
(1)
- ------------------------------------------------------------------------------------

109.2%       89.2%       86.8%     70.6%      49.9%      81.1%    65.7%     103.0%  
- ------------------------------------------------------------------------------------

- -------------
Source: Publicly available information and Petroleum Heat and Power Co., Inc.
(1) Pro forma total debt to total book capitalization for Star Gas is 
estimated at September 30, 1998.
- -------------------------------------------------------------------------------
Dain Rauscher Wessels                                                   Page 56

[LOGO OF PETRO APPEARS HERE] Propane Master Limited Partnerships
Latest Twelve Months EBITDA to Interest 
Expense (Interest Coverage)

====================================================================================
[BAR CHART APPEARS HERE]

Suburban   Heritage  Cornerstone  Amerigas  Ferrellgas  Mean  Star Gas   Star Gas
Propane    Propane   Propane      Partners   Partners         Partners   Partners
Partners   Partners  Partners                                 Historical Pro Forma
(1)
- -------------------------------------------------------------------------------------

2.7x        2.5x      2.4x        2.3x         2.1x     2.4x    2.4x       2.1x 
- -------------------------------------------------------------------------------------

- ------------------
Source: Publicly available information and Petroleum Heat and Power Co., Inc.
(1) Pro forma EBITDA to interest expense for Star Gas is estimated for the 
year ended September 30, 1998.
- --------------------------------------------------------------------------------
Dain Rauscher Wessels                                                   Page 57

[LOGO OF PETRO APPEARS HERE] Propane Master Limited Partnerships
Total Debt to Latest Twelve Months EBITDA

===================================================================================
[BAR CHART APPEARS HERE]

Ferrellgas Cornerstone  Heritage   Suburban   Amerigas   Mean  Star Gas    Star Gas
Partners   Propane      Propane    Propane    Partners         Partners    Partners
Partners     Partners   Partners                    Historical Pro Forma
(1)
- ------------------------------------------------------------------------------------- 

5.9x       5.7x          5.3x       5.0x       4.8x      5.3x    5.8x        5.7x
- -------------------------------------------------------------------------------------

- ---------------------
Source: Publicly available information and Petroleum Heat and Power Co., Inc.
(1) Pro forma total debt to EBITDA for Star Gas is estimated at and for the 
year ended September 30, 1998.
- -------------------------------------------------------------------------------
Dain Rauscher Wessels                                                   Page 58

[LOGO OF PETRO APPEARS HERE] Propane Master Limited Partnerships
Latest Twelve Months Profitability Margins

=========================================================================================
[BAR CHART APPEARS HERE]

Amerigas   Heritage   Suburban   Ferrellgas  Cornerstone  Mean  Star Gas
Partners   Propane    Propane    Partners    Propane            Partners
Partners   Partners               Partners
- ------------------------------------------------------------------------------------------ 

Gross Profit      36.3%      23.8%      20.7%      20.0%       7.7%       21.7%   22.4%
EBITDA            16.4%      20.7%      15.1%      15.6%       5.9%       14.8%   16.9%
EBIT               9.5%      12.9%       9.4%       8.7%       3.5%       8.8%     6.5%
- ------------------------------------------------------------------------------------------ 

- --------------------------
Source: Publicly available information.
- -------------------------------------------------------------------------------
Dain Rauscher Wessels                                                   Page 59

[LOGO OF PETRO APPEARS HERE]  Propane Master Limited Partnerships
Latest Twelve Months Retail Gallons

=========================================================================================
[BAR CHART APPEARS HERE]

Millions of Gallons

Amerigas  Ferrellgas  Suburban Cornerstone  Heritage  Mean  Star Gas   Star Gas
Partners   Partners   Propane   Propane     Propane         Partners   Partners
Partners  Partners    Partners        Historical  Pro Forma
- ------------------------------------------------------------------------------------------ 

785.0      650.2      530.0     233.1       149.5     496.6   98.9      453.0
[Home Heating Oil
Increment (354.1
million gallons)]   
- ------------------------------------------------------------------------------------------  

- -------------------
Source: Publicly available information.
- -------------------------------------------------------------------------------
Dain Rauscher Wessels                                                   Page 60

[LOGO OF PETRO APPEARS] Propane Master Limited Partnerships
Latest Twelve Months Sales Percentage by Customer Type

=========================================================================================
[BAR CHART APPEARS HERE]

Residential                                              
- ------------------------------------------------------------------------------------------   
Cornerstone  Ferrellgas    Heritage    Amerigas    Suburban   Mean   Star Gas   
Propane      Partners      Propane     Partners    Propane           Partners  
Partners                   Partners                Partners                    
- ------------------------------------------------------------------------------------------   

57.0%          56.0%       55.0%       40.5%       37.7%     49.3%    54.0%    
- ------------------------------------------------------------------------------------------  

Commercial / Industrial
- ------------------------------------------------------------------------------------------   
Suburban    Amerigas   Ferrellgas    Heritage   Cornerstone  Mean    Star Gas
Propane     Partners    Partners     Propane    Propane              Partners
Partners                             Partners   Partners
- ------------------------------------------------------------------------------------------   

39.7%         36.7%        31.0%       26.0%       23.0%     31.3%    19.0%
- ------------------------------------------------------------------------------------------  

Agricultural                                                     
- ------------------------------------------------------------------------------------------   
Ferrellgas  Cornerstone  Amerigas    Suburban    Heritage   Mean   Star Gas 
Partners    Propane      Partners    Propane     Propane           Partners 
Partners                 Partners    Partners                   
- ------------------------------------------------------------------------------------------   

13.0%       11.0%        8.9%         6.6%       N/A        9.9%      19.0%
- ------------------------------------------------------------------------------------------   

Other 
- ------------------------------------------------------------------------------------------   
Heritage    Suburban   Amerigas  Cornerstone  Ferrellgas   Mean   Star Gas
Propane     Propane    Partners  Propane      Partners            Partners
Partners    Partners             Partners
- ------------------------------------------------------------------------------------------    

19.0%       15.9%      13.9%       9.0%        N/A         14.5%     8.0%
- ------------------------------------------------------------------------------------------  

- -------------------------
Source: Publicly available information.
- --------------------------------------------------------------------------------
Dain Rauscher Wessels                                                    Page 61

[LOGO OF PETRO APPEARS HERE]  Propane Master Limited Partnerships
Latest Twelve Months Operating Results per 
Retail Gallon

=========================================================================================
[BAR CHART APPEARS HERE]

Amerigas   Heritage  Cornerstone  Suburban   Ferrellgas  Mean  Star Gas
Partners   Propane     Propane    Propane    Partners          Partners
Partners    Partners   Partners
- ------------------------------------------------------------------------------------------    

Gross Profit       $0.42      $0.29      $0.26      $0.26      $0.20     $0.29   $0.25
EBITDA             $0.19      $0.25      $0.20      $0.19      $0.15     $0.20   $0.19
SG&A               $0.23      $0.04      $0.06      $0.07      $0.03     $0.09   $0.06
- ------------------------------------------------------------------------------------------    

_______________________
Source: Publicly available information.

- --------------------------------------------------------------------------------
Dain Rauscher Wessels                                                    Page 62

[LOGO OF PETRO APPEARS HERE] Propane Master Limited Partnerships
Latest Twelve Months Operating Results per Branch

=========================================================================================
[BAR CHART APPEARS HERE]

Cornerstone   Suburban  Amerigas   Heritage   Ferrellgas   Mean  Star Gas
Propane     Propane   Partners   Propane    Partners           Partners
Partners    Partners             Partners
- ------------------------------------------------------------------------------------------    

Revenue       $2,797     $1,963     $1,524     $1,244      $746      $1,655     $931
Gross Profit    $215       $406       $553       $296      $150        $324     $208
EBITDA          $165       $297       $251       $258      $116        $217     $158
- ------------------------------------------------------------------------------------------    

_______________________
Source: Publicly available information.

- -------------------------------------------------------------------------------
Dain Rauscher Wessels                                                   Page 63

[LOGO OF PETRO APPEARS HERE] Project Intense Heat

==============================================================================

Comparable Transactions Analysis

- ------------------------------------------------------------------------------
Dain Rauscher Wessels                                                  Page 64

Comparable Transactions Analysis
[LOGO OF PETRO APPEARS HERE]  Selected Energy Marketing & Distribution Merger &
Acquisition Transactions
(1994 - Present)

PROJECT INTENSE HEAT
Selected Energy Marketing & Distribution Merger & Acquisition Transactions
(1994 - Present)

Transaction     Transaction     
Enterprise   Enterprise Value /  
------------------
Date                                                                                     Value (1)     LTM       LTM 
Effective   Acquiror Name                         Target Name                              ($ mil.)     EBITDA     EBIT
- --------    -----------------------------------   ---------------------------------------  ---------    -------   ------- 

05/31/94    Valero Energy Corporation             Valero Natural Gas Partners, L.P.           $865.6    14.6 x    21.4 x   
07/01/94    Associated Natural Gas Corporation    Grand Valley Gas Company                      53.8    7.3 x     10.9 x   
07/13/94    K N Energy, Inc.                      American Oil and Gas Company                 410.9    10.9 x    20.5 x   
12/15/94    Panhandle Eastern Corp.               Associated Natural Gas Corporation           750.7    9.6 x     15.2 x   
03/14/95    Natural Gas Clearinghouse             Trident NGL Holding, Inc.                    719.3    9.8 x     18.2 x   
05/15/95    LG&E Energy Corporation               Hadson Corporation                           143.0    11.9 x    NM       
08/05/97    El Paso Natural Gas Company           Eastex Energy, Inc.                           35.6    NM        NM       
04/15/97    PacifiCorp Holdings, Inc.             TPC Corporation                              388.7    13.4 x    23.3 x   
11/18/97    Enron Corp.                           Enron Global Power & Pipelines L.L.C.        829.1    14.3 x    14.3 x   
03/06/98    Kinder Morgan Energy Partners, L.P.   Santa Fe Pacific Pipeline Partners, L.P.    1464.9    10.9 x    13.0 x   
10/16/98    CMS Energy Corporation                Continental Natural Gas, Inc.                150.4    NM        NM       
Pending     ONEOK, Inc.                           Southwest Gas Corporation                   1764.3    7.4 x     11.8 x   
--------------------------------------------------------------------------  
Mean                                        $631.3    11.0 x    16.5 x   
Median                                       565.1    10.9 x    15.2 x   
High                                        1764.3    14.6 x    23.3 x   
Low                                           35.6    7.3 x     10.9 x   
--------------------------------------------------------------------------   
- ----------------------------------------------------------------------------------------------------------------------------  
Pending     Star Gas Partners, L.P.               Petroleum Heat and Power Co., Inc. (2)     $361.00    10.3 x    NM      
- ----------------------------------------------------------------------------------------------------------------------------  

Transaction    Transaction Equity Value / 
Equity       --------------------------
Value         LTM Net   Tangible 
Date                                                                                                                
Effective   Acquiror Name                         Target Name                              ($ mil.)        Income    Book Value    
- --------    -----------------------------------   ---------------------------------------  ---------     --------   ---------------

05/31/94    Valero Energy Corporation             Valero Natural Gas Partners, L.P.          $230.4         55.3 x     4.3 x
07/01/94    Associated Natural Gas Corporation    Grand Valley Gas Company                     56.7         26.5 x     3.5 x  
07/13/94    K N Energy, Inc.                      American Oil and Gas Company                302.1         54.8 x     1.6 x  
12/15/94    Panhandle Eastern Corp.               Associated Natural Gas Corporation          577.5         19.5 x     2.8 x  
03/14/95    Natural Gas Clearinghouse             Trident NGL Holding, Inc.                   333.7         50.3 x     1.4 x  
05/15/95    LG&E Energy Corporation               Hadson Corporation                          143.0           NM        NM  
08/05/97    El Paso Natural Gas Company           Eastex Energy, Inc.                          34.2             NM     2.2 x  
04/15/97    PacifiCorp Holdings, Inc.             TPC Corporation                             241.4         47.9 x     2.5 x  
11/18/97    Enron Corp.                           Enron Global Power & Pipelines L.L.C.       865.3         15.4 x     2.5 x  
03/06/98    Kinder Morgan Energy Partners, L.P.   Santa Fe Pacific Pipeline Partners, L.P.   1163.1         21.3 x     4.3 x  
10/16/98    CMS Energy Corporation                Continental Natural Gas, Inc.                63.2             NM     1.5 x  
Pending     ONEOK, Inc.                           Southwest Gas Corporation                   864.0         18.9 x     1.9 x  
-------------------------------------------------------------------------- 
Mean                                       $406.2         34.4 x     2.6 x  
Median                                      271.8         26.5 x     2.5 x  
High                                       1163.1         55.3 x     4.3 x  
Low                                          34.2         15.4 x     1.4 x   
--------------------------------------------------------------------------   
- ---------------------------------------------------------------------------------------------------------------------------- 
Pending     Star Gas Partners, L.P.               Petroleum Heat and Power Co., Inc. (2)      $50.3           NM        NM  
- ----------------------------------------------------------------------------------------------------------------------------  

____________________

Source: Securities Data Company, publicly available information and Petroleum
Heat and Power Co., Inc.

(1) Transaction enterprise value is defined as common equity purchase price plus
total debt and preferred stock, less cash and equivalents, excluding fees and
expenses. The stock is valued using the closing price on the effective date of
the transaction.

(2) Petro market value of capitalization and market value of equity are based on
the Unit Reference Value Analysis (Dain Rauscher Wessels Case), [See Unit
Reference Value Analysis Summary on page 9]. LTM EBITDA includes Star Gas
distributions and excludes non-recurring expenses.

===============================================================================
Dain Rauscher Wessels                                                   Page 65

[LOGO OF PETRO APPEARS HERE]  Comparable Transactions Analysis
Petro Acquisitions Summary

PROJECT INTENSE HEAT
Petro Acquisitions Summary
(Dollar and gallon amounts in thousands, except per gallon and per customer amounts)

Target LTM EBITDA                 Mean                      Mean
Total       Total      -----------------    Total     Acquisition   Total       Acquisition
Companies  Acquisition             Mean      Gallons      Cost      Customers       Cost
Petro 1996 - 1997 Acquisitions       Acquired     Costs      EBITDA   Multiple   Acquired   per Gallon   Acquired     per Customer
- ----------------------------------- ---------- ------------  -------  --------  ---------- ------------  ---------   -------------

Ten Largest                           10        $33,465      $7,848     4.2 x       40,446     $0.84         31,358      $1,194

Excluding Ten Largest                 14          8,629       2,064     4.1 x       13,730      0.55         14,224         630

Petroleum Heat and Power Co., Inc.                                                                                     
- -----------------------------------------------------------------------------------------------------------------------------------
Normalized 1998E EBITDA                        $336,194(1)  $44,749(2)  7.5 x      384,390     $0.87        335,000      $1,004

Estimated 1998E EBITDA                          336,194(1)   30,612(2) 11.0 x
- -----------------------------------------------------------------------------------------------------------------------------------

_____________________
Source: Petroleum Heat and Power Co., Inc.
(1) Acquisition cost is based on the Pro Forma Market Value of Capitalization
Analysis (Dain Rauscher Wessels Case), [See Petro Historical and Pro Forma
Adjusted MVE and MVC Summary on page 25] less Petro's investment in Star. The
value of Petro's investment in Star is the most recent closing market price of a
Star Common Unit less a structural subordination discount of 48% multiplied by
Petro's total implied Star units.

(2) EBITDA excludes Star Gas distributions and non-recurring expenses.

================================================================================
Dain Rauscher Wessels                                                   Page 66

[LOGO OF PETRO APPEARS HERE]  Comparable Transactions Analysis
1996 - 1997 Petro Acquisitions (Ten Largest)

PROJECT INTENSE HEAT
1996 - 1997 Petro Acquisitions (Ten Largest)
(Dollar and gallon amounts in thousands, except per gallon and per customer amounts)

Total           Target LTM EBITDA            Total    Acquisition    Total        Acquisition
Acquisition    (Pro Forma Petro Ownership)    Gallons      Cost       Customers        Cost
---------------------------
Date        Company Acquired        Costs          EBITDA        Multiple      Acquired   per Gallon    Acquired      per Customer
- ----        --------------------  -----------    ---------      ---------      --------   ----------   ----------     ------------

02/01/96    Seaman              $  7,134         $ 1,552          4.6 x          7,522     $ 0.95        7,806       $    914
01/11/96    Garrison               5,242           1,154          4.5 x          5,925       0.88        6,575            797
01/19/96    Cibro                  4,368           1,087          4.0 x          6,200       0.70        2,426          1,800
10/18/96    Bergen                 3,202             718          4.5 x          5,501       0.58        1,593          2,010
04/14/97    Mugullian Fuel         2,802             638          4.4 x          3,000       0.93        2,570          1,090
04/01/96    McDowell               2,723             669          4.1 x          2,675       1.02        2,305          1,182
08/29/97    Oil Burner Utility     2,633             603          4.4 x          3,500       0.75        1,590          1,656
09/10/97    Romary                 2,252             545          4.1 x          2,348       0.96        2,210          1,019
09/29/97    T.W. Perry             1,619             439          3.7 x          2,118       0.76        2,461            658
06/26/97    Bellorno               1,489             443          3.4 x          1,657       0.90        1,822            817
---------------------------------------------------------------------------------------------------------------------- 
Total               $ 33,465         $ 7,848          ---           40,446       ---        31,358            ---
Mean                   3,346             785          4.2 x          4,045     $ 0.84        3,136       $  1,194
Weighted Average         ---             ---          4.3 x            ---       0.83          ---          1,067
Median                 2,763             654          4.2 x          3,250       0.89        2,366          1,055
High                   7,134           1,552          4.6 x          7,522       1.02        7,806          2,010
Low                    1,489             439          3.4 x          1,657       0.58        1,590            658
---------------------------------------------------------------------------------------------------------------------- 

________________
Source: Petroleum Heat and Power Co., Inc.

===============================================================================
Dain Rauscher Wessels                                                  Page 67

[LOGO OF PETRO APPEARS HERE]  Comparable Transactions Analysis
1996 - 1997 Petro Acquisitions 
(Excluding Ten Largest)

PROJECT INTENSE HEAT
1996 - 1997 Petro Acquisitions (Excluding Ten Largest)
(Dollar and gallon amounts in thousands, except per gallon and per customer amounts)

Total           Target LTM EBITDA          Total    Acquisition      Total      Acquisition
Acquisition   (Pro Forma Petro Ownership)   Gallons      Cost        Customers       Cost
--------------------------
Date         Company Acquired         Costs         EBITDA        Multiple     Acquired    per Gallon    Acquired    per Customer
- ----         -------------------    -----------   ---------      -----------   --------   -----------    ---------  -------------

11/24/97     Shreve                 $1,457         $300            4.9 x        2,425         $0.60        2,782        $524
09/11/96     Flynn                   1,038          232            4.5 x        1,316          0.79        1,070         970
12/18/97     Genovese                1,011          281            3.6 x           --            --        1,054         959
10/31/96     Hy-Test                   813          177            4.6 x        1,468          0.55        1,269         641
01/15/97     Oils Inc.                 748          188            4.0 x        1,189          0.63          826         905
10/01/97     Millbrook                 527          112            4.7 x          908          0.58          900         586
07/10/97     Good                      521          117            4.5 x        1,200          0.43        1,559         334
12/26/96     Sherman                   493          103            4.8 x          564          0.87          475       1,037
12/30/96     Grasso                    423          116            3.6 x        1,118          0.38        1,080         392
05/14/97     Alderfer Heating          401          111            3.6 x          787          0.51          740         542
12/27/96     Matco                     368           97            3.8 x          988          0.37          722         510
12/18/96     Dexter Bros.              332           99            3.4 x          786          0.42          700         474
09/24/96     Farren                    264           69            3.8 x          481          0.55          520         507
10/18/96     Highstown                 233           62            3.8 x          500          0.47          527         443
--------------------------------------------------------------------------------------------------------------------- 
Total                  $8,629       $2,064            ---         13,730           ---       14,224         ---
Mean                      616          147            4.1 x        1,056         $0.55        1,016        $630
Weighted Average          ---          ---            4.2 x          ---          0.63          ---         607
Median                    507          114            3.9 x          988          0.55          863         533
High                    1,457          300            4.9 x        2,425          0.87        2,782       1,037
Low                       233           62            3.4 x          481          0.37          475         334
--------------------------------------------------------------------------------------------------------------------- 

___________________

Source: Petroleum Heat and Power Co., Inc.

================================================================================
Dain Rauscher Wessels                                                   Page 68

[LOGO OF PETRO APPEARS HERE]  Comparable Transactions Analysis
1994 - 1998 Star Gas Partners Acquisitions
===============================================================================

PROJECT INTENSE HEAT 
1994 - 1998 Star Gas Partners Acquisitions 
(Dollar amounts in thousands)

Total                         Target LTM EBITDA
Acquisition                ----------------------------
Date           Company Acquired                                        Costs                    EBITDA              Multiple
- ----           -----------------------------------------             -----------                ------              --------

06/15/94       Loveland                                                 $700                    $127                 5.5 x
11/24/94       Baystate                                                1,450                     209                 6.9 x
09/12/95       Debolt                                                    950                     151                 6.3 x
03/22/96       Bob White L.P. Gas / Mitchell Bottle Gas                1,500                     263                 5.7 x
07/22/96       Fuzzy Moore                                               850                     147                 5.8 x
10/22/97       Pearl Gas Co.                                          24,127                   3,288                 7.3 x
02/20/98       Tri-County Gas                                            550                     108                 5.1 x
05/28/98       Knowles LP Gas                                          3,000                     426                 7.0 x
05/28/98       Tioga Petroleum                                         1,200                     257                 4.7 x
07/30/98       Lowe Bros & Dad, Inc.                                   3,750                     602                 6.2 x
08/11/98       Myers Appliance                                         1,200                     191                 6.3 x
----------------------------------------------------------------------------------------------------------------- 
Total                                                 $39,277                  $5,769                 ---
Mean                                                    3,571                     524                 6.1 x
Weighted Average                                          ---                     ---                 6.8 x
Median                                                  1,200                     209                 6.2 x
High                                                   24,127                   3,288                 7.3 x
Low                                                       550                     108                 4.7 x
----------------------------------------------------------------------------------------------------------------- 

Petroleum Heat and Power Co., Inc.                 
----------------------------------------------------------------------------------------------------------------- 
Normalized 1998E EBITDA                              $336,194  (1)            $44,749  (2)            7.5 x    
Estimated 1998E EBITDA                                336,194  (1)             30,612  (2)           11.0 x     
----------------------------------------------------------------------------------------------------------------- 

___________________
Source: Star Gas Partners, L.P. and Petroleum Heat and Power Co., Inc.

(1) Acquisition cost is based on the Pro Forma Market Value of Capitalization
Analysis (Dain Rauscher Wessels Case), [See Petro Historical and Pro Forma
Adjusted MVE and MVC Summary on page 25] less Petro's investment in Star.
The value of Petro's investment in Star is the most recent closing market
price of a Star Common Unit less a structural subordination discount of 48%
multiplied by Petro's total implied Star units.

(2) EBITDA excludes Star Gas distributions and non-recurring expenses.

===============================================================================
Dain Rauscher Wessels                                                   Page 69

[LOGO OF PETRO APPEARS HERE]  Project Intense Heat

===============================================================================

Merger Premiums Analysis

===============================================================================
Dain Rauscher Wessels                                                   Page 70

Merger Premiums Analysis        
[LOGO OF PETRO APPEARS HERE]  Selected Energy Industry Merger & Acquisition 
Transactions
(1994 - Present, Stock-for-Stock, 
$100 - $500.00 million)

PROJECT INTENSE HEAT 
Selected Energy Industry Merger & Acquisition Transactions 
(1994 - Present, Stock-for-Stock, $100 - $500 million)

Transaction  Transaction    Premium / Discount to:
Enterprise     Equity     ------------------------
Date                                                                            Value (1)    Value per   1 day    1 week  4 weeks
Announced  Acquiror Name                       Target Name                        ($ mil.)       Share     prior    prior    prior
- ---------  ----------------------------------  --------------------------------  ----------   -----------  -----    ------  -------

03/24/94   K N Energy, Inc.                    American Oil and Gas Company       $366.8        11.05      4.0%     4.0%     5.2%
05/23/94   Dresser Industries, Inc.            Wheatley TXT Corp.                  204.6        14.70     25.1%    25.1%    32.1%
06/02/94   J Ray McDermott S.A.                Offshore Pipelines, Inc.            354.4        21.88     14.4%    23.3%    35.7%
06/13/94   Noble Drilling Corporation          Chiles Offshore Drilling Company    200.2         5.25      5.0%     2.4%    23.5%
09/20/94   Parker & Parsley Petroleum Company  Tide West Oil Company               141.0        14.24     -0.1%    21.2%    16.2%
05/03/95   Barrett Resources Corporation       Plains Petroleum Company            299.6        30.23     34.3%    38.2%    39.0%
11/20/95   Tidewater, Inc.                     Hornbeck Offshore Services, Inc.    291.5        21.67     40.9%    40.9%    46.9%
01/25/96   ENSCO International Incorporated    Dual Drilling (Mosvold Shipping)    325.2        14.22      8.9%    13.2%    23.7%
04/17/97   Baker Hughes Incorporated           Drilex International, Inc.          133.6        17.58     31.4%    37.9%    59.8%
06/10/97   Halliburton Company                 NUMAR Corporation                   328.9        39.62     91.0%    99.4%    95.7%
06/20/97   Forcenergy Inc.                     Convest Energy Corporation          101.5         9.44     11.1%    11.1%    18.9%
07/07/97   Meridian Resource Corporation       Cairn Energy USA, Inc.              233.6        13.30     22.3%    29.0%    26.7%
11/13/97   Chesapeake Energy Corporation       Hugoton Energy Corporation          377.0        13.33      7.7%    11.0%    26.9%
05/12/98   Lomak Petroleum, Inc.               Domain Energy Corporation           224.6        14.50     65.7%    69.3%    21.5%
08/03/98   CMS Energy Corporation              Continental Natural Gas, Inc.       172.3        10.00      8.8%    35.6%    42.9%

------------------------------------------------------------------------------------ 
Mean                               $250.3                  24.7%    30.8%    34.3%
Median                              233.6                  14.4%    25.1%    26.9%
High                                377.0                  91.0%    99.4%    95.7%
Low                                 101.5                  -0.1%     2.4%     5.2%
-----------------------------------------------------------------------------------

08/14/98   Star Gas Partners, L.P.             Petroleum Heat and Power Co., Inc. (Senior Subordinated Unit / Implied
Reference Value per Petro Share) (2)
------------------------------------------------------------------------------------ 
Prior to Announcement                            $1.95      3.9%    11.3%     7.4%
Current (3)                                      $1.95     94.7%    94.7%    94.7%
------------------------------------------------------------------------------------ 

________________________

Source: Securities Data Company, publicly available information and Petroleum
Heat and Power Co., Inc.
(1) Transaction Enterprise Value is defined as common equity purchase price plus
total debt and preferred stock, less cash and equivalents, excluding fees and
expenses. The stock is valued using the closing price on the last full trading
day prior to announcement.
(2) The Senior Subordinated Unit Implied Reference Value per Petro share is
based on the Unit Reference Value Analysis (Dain) Rauscher Wessels Case), [See
Unit Reference Value Analysis Summary on page 9].
(3) Based on the closing price of $1.00 on January 22, 1999.

================================================================================
Dain Rauscher Wessels                                                   Page 71

[LOGO OF PETRO APPEARS HERE]  Merger Premiums Analysis
Selected Recent All Industries Merger & 
Acquisition Transactions
(1998 - Present, Stock-for-Stock, 
$100 - $500 million)

PROJECT INTENSE HEAT
Selected Recent All Industries Merger & Acquisition Transactions
(1998 - Present, Stock-for-Stock, $100 - $500 million)

Transaction  Transaction
Enterprise     Equity      Premium / Discount to:
-------------------------
Date                                                                              Value      Value per    1 day    1 week   4 weeks
Announced    Acquiror Name                      Target Name                      ($ mil.)      Share      prior    prior     prior
- ---------    --------------------------------   -------------------------------  --------    ----------   -----    ------   -------

01/01/98     ConAgra Inc                        GoodMark Foods Inc                  $230.6   $28.58      54.5%     75.9%   69.4%
01/14/98     Suiza Foods Corp                   Continental Can Co Inc               334.4    40.65      45.8%     74.4%   71.2%
01/20/98     World Access Inc                   NACT Telecommunications (GST)        144.6    17.50      12.0%     12.5%   16.7%
01/26/98     USA Waste Services Inc             TransAmerican Waste Industries       156.7     2.18      51.4%     36.6%   78.6%
02/02/98     BMC Software Inc                   BGS Systems Inc                      288.5    45.00      23.3%     32.4%   42.9%
02/02/98     Romac International Inc            Source Services Corp                 431.1    31.93      51.1%     56.7%   50.2%
02/04/98     Primus Telecommunications          TresCom International Inc            142.6    10.80      25.2%     30.9%   51.5%
02/13/98     Regions Financial Corp             First Community Banking Svcs         137.7    48.05      29.9%     37.3%   52.5%
02/18/98     United Bankshares Inc, WV          Fed One Bancorp, Wheeling, WV        407.2    36.47       8.9%     22.1%   10.5%
02/18/98     Tarragon Realty Investors          National Income Realty Trust         246.1    19.82      22.9%     17.9%   20.1%
02/19/98     PLATINUM Technology Inc            Mastering Inc                        180.5    12.50      31.6%     25.0%   33.3%
02/23/98     Network Associates Inc             Trusted Information Systems          255.5    20.19      59.9%     84.6%   92.3%
02/24/98     Baxter International Inc           Somatogen Inc                        175.5     9.00      35.8%     39.8%   92.0%
03/02/98     Unitrode Corp                      Benchmarq Microelectronics Inc       145.1    18.81      15.8%     14.0%   67.2%
03/02/98     Siebel Systems Inc                 Scopus Technology Inc                455.9    22.39      58.5%     93.6%  100.1%
03/02/98     Huhtamaki Oy (Ahlgrens)            Sealright Co Inc                     200.7    11.00      -2.2%     -1.1%   -5.4%
03/03/98     Hubco Inc, Mahwah, New Jersey      Community Financial Hldg, NJ         144.8    25.28       1.1%      2.7%   16.2%
03/06/98     USB Holding Co Inc                 Tappan Zee Financial Inc             127.9    16.80     -11.6%    -10.1%  -11.6%
03/16/98     PLATINUM Technology Inc            Logic Works Inc                      190.3    15.32      13.0%     36.2%   57.1%
03/19/98     JeffBanks Inc, Philadelphia, PA    Regent Bancshares Corp, PA           213.4    14.85       6.1%      6.1%    6.1%
03/25/98     Fidelity National Financial        Matrix Capital Corp                  496.9    27.95      45.2%     64.4%   74.7%
03/26/98     Aviation Sales                     Whitehall Corp                       139.9    22.57       2.6%     -2.9%    9.1%
03/27/98     Dover Downs Entertainment Inc      Grand Prix Assoc Of Long Beach       115.0    18.31      11.8%     22.1%   21.6%
03/31/98     Omnicare Inc                       IBAH Inc                             153.8     5.75      12.2%     61.4%   58.6%
04/06/98     Applied Power Inc                  Zero Corp                            301.0    33.63      16.5%     18.0%   33.2%
04/09/98     Complete Business Solutions        Claremont Technology Group Inc       278.5    27.00      21.3%     77.0%  118.2%
04/14/98     Anchor Financial Corp              ComSouth Bankshares Inc              229.0    33.00       9.3%     17.9%   20.0%
04/15/98     Giant Industries Inc               Holly Corp                           318.8    27.43       3.0%      2.5%   -1.2%
04/16/98     Phoenix Technologies Ltd           Award Software International         101.8    16.08      12.8%     21.3%   53.1%
04/23/98     Ambanc Holding Co, Amsterdam, NY   AFSALA Bancorp Inc, NY               161.3    21.00       1.2%      2.4%    1.2%
04/27/98     Bright Horizons Holdings Inc       CorporateFamily Solutions Inc        114.3    23.69     -21.4%    -22.3%   -7.5%
05/11/98     Fairchild Corp                     Banner Aerospace Inc                 482.5    12.10       1.4%      0.3%    2.4%
05/12/98     Lomak Petroleum, Inc.              Domain Energy Corporation            224.6    14.50      65.7%     69.3%   21.5%
05/19/98     Quantum Corp                       ATL Products Inc (Odetics)           353.1    29.00       8.4%     19.0%   45.0%
05/29/98     Valley National Bancorp, NJ        Wayne Bancorp Inc, Wayne, NJ         401.4    34.38      40.3%     43.2%   49.5%
06/02/98     State Financial Services Corp      Home Bancorp of Elgin, Elgin, IL     395.2    19.05      11.3%     11.3%    8.9%
06/04/98     PMC Commercial Trust               Supertel Hospitality Inc             113.4    12.15      -6.5%     -5.6%   -4.7%
06/04/98     World Access Inc                   Telco Systems Inc                    183.4    17.00      77.8%     65.9%   63.9%
06/12/98     Davel Communications Group Inc     PhoneTel Technologies Inc            226.3     3.08      64.3%     69.9%  208.0%
06/22/98     Reptron Electronics                All American Semiconductor Inc       103.7     2.72      13.9%     32.0%   61.3%
06/22/98     Learning Co Inc                    Broderbund Software Inc              287.2    20.00      21.2%     16.4%   19.0%
06/24/98     Mylan Laboratories Inc             Penederm Inc                         190.5    21.89      39.0%     39.5%   88.3%
06/25/98     German American Bancorp, IN        1st Bancorp, Vincennes, Indiana      166.0    50.94      65.7%     69.3%   21.5%
06/29/98     Philadelphia Suburban Corp         Consumers Water Co                   466.6    30.46      25.6%     33.1%   42.5%
07/01/98     Metzler Group Inc                  Lecg Inc                             272.6    21.98      46.5%     49.0%   41.8%
07/02/98     Union Planters Corp, Memphis, TN   First Mutual Bancorp, Illinois       375.8    18.50       5.7%      4.2%    9.6%
07/06/98     Davel Communications Group Inc     Peoples Telephone Co Inc             209.6     5.86      87.5%     80.3%  118.0%
07/09/98     Zebra Technologies Corp            Eltron International Inc             282.2    36.00      25.8%     34.6%   57.4%
07/13/98     Medtronic Inc                      AVECOR Cardiovascular Inc            107.8    13.00      31.6%     76.3%  114.4%
07/23/98     HBO & Co                           IMNET Systems Inc                    245.9    25.29      55.6%     59.3%   62.5%
07/23/98     Digital Microwave Corp             Innova Corp                          116.4     6.83      16.2%     36.5%   30.0%
08/02/98     Cohoes Savings Bank, NY            SFS Bancorp Inc, Schenectady, NY     196.9    35.00      75.0%     60.9%   66.7%
08/03/98     CMS Energy Corporation             Continental Natural Gas, Inc.        172.3    10.00       8.8%     35.6%   42.9%
08/10/98     BB&T Corp, Winston-Salem, NC       Scott & Stringfellow Financial       143.5    34.44      19.8%     28.7%   35.0%
08/17/98     MAF Bancorp, Clarendon Hills, IL   Westco Bancorp Inc, IL               318.5    30.86      14.3%      8.3%    6.4%

===============================================================================
Dain Rauscher Wessels                                                   Page 72

[LOGO OF PETRO APPEARS HERE]  MERGER PREMIUMS ANALYSIS
Selected Recent All Industries Merger & 
Acquisition Transactions
(1998 - Present, Stock-for-Stock, 
$100 - $500 million)

PROJECT INTENSE HEAT
Selected Recent All Industries Merger & Acquisition Transactions
(1998 - Present, Stock-for-Stock, $100 - $500 million)

Transaction  Transaction
Enterprise     Equity       Premium / Discount to:
-----------------------
Date                                                                             Value       Value per     1 day   1 week  4 weeks
Announced   Acquiror Name                         Target Name                     ($ mil.)      Share        prior   prior    prior
- ---------   -----------------------------------   ------------------------------  ----------   ---------     -----   ------  -------

08/17/98    MAF Bancorp, Clarendon Hills, IL      Westco Bancorp Inc, IL             $318.5     $30.86      14.3%    8.3%    6.4%
09/02/98    Sanmina Corp                          Altron Inc                          189.5      12.39      16.6%    6.5%    7.7%
09/02/98    USWeb Corp                            CKS Group Inc                       317.3      21.66      53.3%   30.3%   23.7%
09/02/98    Rent-Way Inc                          Home Choice Holdings Inc            289.7      13.60       7.2%    4.1%    7.7%
09/04/98    F&M Bancorp, Frederick, MD            Monocacy Bancshares Inc             315.0      45.93      43.5%   39.2%   43.5%
09/14/98    Qwest Commun Int Inc                  Icon CMT Corp                       184.2      12.00      65.5%   60.0%   -4.0%
09/17/98    Commerce Bancorp, New Jersey          Prestige Financial Corp             339.2      16.25      25.0%   47.7%   31.3%
09/22/98    Transcontinental Realty Inv           Continental Mtg & Equity Trust      292.2      15.50      -3.1%   -6.1%   -3.1%
09/22/98    United National Bancorp, NJ           Raritan Bancorp                     439.8      38.43      16.5%   52.2%   31.7%
09/28/98    Fifth Third Bancorp, OH               Enterprise Federal Bancorp, OH      293.6      43.59      51.6%   49.7%   74.4%
09/28/98    Fidelity Financial of Ohio Inc        Glenway Financial Corp.             265.8      19.88      -8.6%   -0.6%   -0.6%
10/07/98    Western Bancorp, California           PNB Financial Group                 299.0      29.63       7.7%   -1.3%   -0.4%
10/14/98    First Finan Corp, Providence, RI      Mayflower Co-Operative Bank         118.8      22.10      10.5%   26.3%    2.8%
10/19/98    Sunrise Assisted Living Inc           Karrington Health Inc               176.8      11.88      31.1%   26.7%   98.0%
10/21/98    Southwest Bancorporation, TX          Fort Bend Holding, Rosenberg, TX    344.4      21.75      14.5%   14.5%    7.4%
10/25/98    Watson Pharmaceuticals Inc            TheraTech Inc                       291.9      13.91      42.7%   68.6%   50.4%
10/27/98    Wachovia Corp, Winston-Salem, NC      Interstate/Johnson Lane Inc         280.5      32.00      -5.9%   12.3%    5.8%
10/28/98    Lumonics Inc                          General Scanning Inc                105.4       7.66      49.5%   80.3%   39.3%
10/29/98    Eclipsys Corp                         Transition Systems Inc              219.5      13.58      57.5%   49.9%   72.5%
11/02/98    ServiceMaster Co                      LandCARE USA Inc                    244.4      11.00      37.5%   35.4%   79.6%
11/09/98    MGM Grand Inc (Tracinda Corp)         Primadonna Resorts Inc              492.1       9.28       3.1%   32.6%   86.8%
11/10/98    American Express Co                   Rockford Industries Inc             108.3      11.88       9.2%   28.4%  137.6%
11/11/98    Carolina Power & Light Co             North Carolina Natural Gas          433.4      35.00      48.1%   41.1%   47.8%
11/11/98    Webster Finl Corp, Waterbury, CT      Village Bancorp Inc                 248.1      23.50      11.9%   17.5%   16.8%
11/16/98    American Tower Corp                   Omniamerica Inc                     384.3      20.90      19.4%   12.2%   -0.3%
11/19/98    American Retirement Corp              Assisted Living Concepts Inc        409.8      14.66      10.7%   10.1%   18.5%
12/03/98    Fairchild Corp                        Banner Aerospace Inc                333.9      11.00      25.7%   41.9%   40.8%
12/03/98    Automatic Data Processing Inc         Vincam Group Inc                    287.7      18.18      24.3%   26.4%   39.2%
12/04/98    Lakeland Bancorp Inc, NJ              High Point Financial Corp           282.9      18.60      37.8%   35.3%   39.1%
12/09/98    Cadence Design Systems Inc            Quickturn Design Systems Inc        264.9      15.00      23.1%   33.3%   36.4%
12/10/98    BT Financial Corp, Johnstown, PA      First Philson Financial Corp        257.6      46.26      39.7%   45.1%   46.3%
12/15/98    Quintiles Transnational Corp          Pharmaceutical Marketing Svcs       251.1      15.40      29.7%   28.3%   43.3%
12/17/98    Sky Financial Group Inc               Wood Bancorp, Bowling Green, OH     186.9      20.57      29.6%   44.4%   51.0%
12/18/98    Valley National Bancorp, NJ           Ramapo Financial Corp               380.3      12.33      51.7%   64.3%   76.1%
01/05/99    Anchor Bancorp Wisconsin Inc          FCB Financial Corp, Neenah, WI      442.3      44.15      57.7%   63.5%   50.9%
01/06/99    Marriott International Inc            ExecuStay Corp                      129.9      13.00      -4.1%   -0.5%    2.0%
01/11/99    Metamor Worldwide Inc                 SPR Inc                             319.8      22.80      28.0%   29.1%   26.7%
01/19/99    Newport News Shipbuilding Inc         Avondale Industries Inc             468.1      35.50      32.1%   32.1%   24.6%
01/19/99    Dura Automotive Systems (Onex)        Excel Industries Inc                495.5      26.18      25.4%   41.0%   55.1%

------------------------------------------------------------------------------ 
Mean                              $261.20                 26.5%   33.2%   41.7%
Median                              253.3                 23.2%   32.2%   39.2%
High                                496.9                 87.5%   93.6%  208.0%
Low                                 101.8                -21.4%  -22.3%  -11.6%
------------------------------------------------------------------------------ 

08/14/98    Star Gas Partners, L.P.               Petroleum Heat and Power Co., Inc. (Senior Subordinated Unit / Implied Reference
Value per Petro Share) (2)                                    
-------------------------------------------------------------------------------- 
Prior to Announcement                         $1.95        3.9%   11.3%    7.4%
Current (3)                                   $1.95       94.7%   94.7%   94.7%
------------------------------------------------------------------------------- 

___________________________
Source: Securities Data Company, publicly available information and Petroleum
Heat and Power Co., Inc.

(1) Transaction Enterprise Value is defined as common equity purchase price plus
total debt and preferred stock, less cash and equivalents, excluding fees and
expenses. The stock is valued using the closing price on the last full trading
day prior to announcement.

(2) The Senior Subordinated Unit Implied Reference Value per Petro share is
based on the Unit Reference Value Analysis (Dain Rauscher Wessels Case), [See
Unit Reference Value Analysis Summary on page 9].

(3) Based on the closing price of $1.00 on January 22, 1999.

===============================================================================
Dain Rauscher Wessels                                                   Page 73

[LOGO OF PETRO APPEARS HERE]  Project Intense Heat

===============================================================================

Price and Volume Data

===============================================================================
Dain Rauscher Wessels                                                   Page 74

[LOGO OF PETRO APPEARS HERE]   Price and Volume Data
First Trading Day of Class A Common Shares 
(July 29, 1992) - Present Petro Weekly Stock 
Price / Volume

================================================================================

[LINE GRAPH APPEARS HERE]

_______________
Source: Factset Data Systems and publicly available information.

================================================================================
Dain Rauscher Wessels                                                   Page 75

[LOGO OF PETRO APPEARS HERE]  Price and Volume Data
IPO (December 14, 1995) - Present Star Gas Daily 
Unit Price / Volume

===============================================================================

=============================================================

X

=============================================================

===============================================================================
Dain Rauscher Wessels                                                   Page 76

[LOGO OF PETRO APPEARS HERE]  Price and Volume Data
1997 - Present Relative Price Performance

===============================================================================

=============================================================

X

=============================================================

===============================================================================
Dain Rauscher Wessels                                                   Page 77

[LOGO OF PETRO APPEARS HERE]  Price and Volume Data
Relative Price Performance Since Announcement of 
Merger (August 14, 1998)

===============================================================================

[LINE GRAPH APPEARS HERE]

____________________
Source:  Factset Data Systems.

(1) Energy & Fuel Marketing & Distribution peer group includes Getty Petroleum 
Marketing, Meteor Industries, Midcoast Energy Resources, Streicher Mobile 
Fueling, TransMontaigne and World Fuel Services Corporation.
(2) Propane MLP peer group includes Amerigas Partners, Cornerstone Propane 
Partners, Ferrellgas Partners, Heritage Propane Partners and Suburban Propane 
Partners.

===============================================================================
Dain Rauscher Wessels                                                   Page 78

[LOGO OF PETRO APPEARS HERE]  Price and Volume Data
1997 - Present Total Return/1/

===============================================================================

=============================================================

X

=============================================================

===============================================================================
Dain Rauscher Wessels                                                   Page 79

[LOGO OF PETRO APPEARS HERE]  Price and Volume Data
1997 - Present Total Return/1/

===============================================================================

=============================================================

X

=============================================================

===============================================================================
Dain Rauscher Wessels                                                   Page 80

[LOGO OF PETRO APPEARS HERE]  Price and Volume Data
Commodity Price Performance Since Announcement of 
Merger (August 14, 1998)

===============================================================================

=============================================================

X

=============================================================

===============================================================================
Dain Rauscher Wessels                                                   Page 81

EXHIBIT (b)(19)

FAIRNESS OPINION PRESENTATION TO THE
SPECIAL COMMITTEE OF THE BOARD OF DIRECTORS OF
STAR GAS CORPORATION

CONFIDENTIAL

A.G. EDWARDS & SONS, INC.
INVESTMENT BANKING

February 10, 1999

TABLE OF CONTENTS

Section
-------

Introduction...........................................................    I

Review of Events to Date...............................................    II

Summary of the Transaction.............................................    III

Summary Observations and Conclusions...................................    IV

Appendices are separately bound:

Appendix I     Analyses Performed Under 30-Year Weather Scenario

Appendix II    Analyses Performed Under 15-Year Weather Scenario

INTRODUCTION

TRANSACTION PROPOSAL   

[_]  During 1997, Star Gas Partners Corporation (the "General Partner") and
Petroleum Heat and Power Co., Inc. ("Petro") discussed the idea of a
possible acquisition of Petro by Star Gas Partners, L.P. ("Star Gas" or the
"Partnership"). The overall transaction (the "Transaction") consists of the
following four principal parts:

-  The acquisition of Petro by the Partnership;

-  A public offering of equity by the Partnership and a private offering of
debt by Petro and the redemption of certain debt and preferred stock of
Petro (the "Financings");

-  The withdrawal of Star Gas Corporation as the general partner of the
Partnership and Star Gas Propane, L.P. (the "Operating Partnership"),
and the election of Star Gas LLC as the new general partner; and

-  Amending the Agreement of Limited Partnership of the Partnership and the
Operating Partnership in order to consummate the Transaction.

A.G. Edwards'
Engagement

[_]  By letter engagement, dated March 23, 1998, A.G. Edwards & Sons, Inc.
("A.G. Edwards") was engaged by the Special Committee (the "Special
Committee") of the Board of Directors of the General Partner (the "Board")
to act as its financial advisor with respect to the Transaction and to
issue the Special Committee an opinion as to the fairness, from a
financial point of view, to the public common unitholders of Star (the
"Public Common Unitholders"), of the Transaction (the "Fairness Opinion").

[_]  The preparation of a fairness opinion is not susceptible to partial
analyses or summary. In rendering its Fairness Opinion, A.G. Edwards
applied its judgment to a variety of complex analyses and assumptions.
A.G. Edwards may have given various analyses more or less weight than other
analyses, and may have deemed various assumptions more or less probable
than other assumptions. The assumptions made and the judgments applied by
A.G. Edwards in rendering its opinion are not readily susceptible to
description beyond that set forth in the written text of the Fairness
Opinion itself.

Page 1

INTRODUCTION
(continued)

As part of its engagement, A.G. Edwards' activities included, but were not 
limited to, the following:

[_]  A review of the Form S-4 Registration Statement and exhibits thereto,
including the Amended and Restated Agreement and Plan of Merger, the
Exchange Agreement, the Amended and Restated Agreement of Limited
Partnership and the Conveyance and Contribution Agreements.

[_]  A review of certain publicly-available Partnership and Petro historical
audited financial statements and certain unaudited interim financial
statements.

[_]  A review of certain financial analyses and forecasts of the Partnership
prepared by and reviewed with management of the General Partner and the
views of management of the General Partner regarding the Partnership's
past and current business operations, results thereof, financial
condition and future prospects, including the impact of the Transaction,
as well as information relating to the retail propane distribution
industry and the potential strategic, financial and operational benefits
and challenges anticipated from the Transaction;

[_]  A review of certain financial analyses and forecasts of Petro prepared by
and reviewed with management of Petro and the views of management of
Petro regarding Petro's past and current business operations, results
thereof, financial condition and future prospects, including the impact
of the Transaction, as well as information relating to the retail home
heating oil distribution industry and the potential strategic, financial
and operational benefits and challenges anticipated from the Transaction;

[_]  A review of the pro forma impact of the Transaction on the Partnership
and Petro;

[_]  A review of the publicly reported historical price and trading activity
for the Partnership's Common Units and Petro's Class A Common Stock,
including a comparison of certain financial and stock market information
for the Partnership with similar publicly available information for
certain other companies, the securities of which are publicly traded;

Page 2

INTRODUCTION
(continued)

[_]  A review of the current market environment generally, and the retail
propane distribution environment and the retail home heating oil
distribution environment in particular;

[_]  A review of information relating to the financial terms of certain
transactions, including selected mergers and acquisition transactions;

[_]  Conversations with PaineWebber regarding the nature and extent of 
development of the terms of the Transaction; and

[_]  A review of such other information, financial studies, analyses and 
investigations, and financial, economic and market criteria that A.G. 
Edwards considered relevant.

NATURE OF INFORMATION REVIEWED AND PRESENTED

[_]  In rendering its Fairness Opinion, A.G. Edwards has relied upon and
assumed, without independent verification, the completion of the
Financings and the Transaction in accordance with the Amended and
Restated Agreement and Plan of Merger, and the accuracy and completeness
of all financial and other information, publicly available, furnished to,
or otherwise discussed with A.G. Edwards for the purposes of the Fairness
Opinion. With respect to financial projections and other information
provided to or otherwise discussed with A.G. Edwards, A.G. Edwards
assumed and was advised by the management of the General Partner and
Petro, respectively, that such projections and other information were
reasonably prepared on a basis that reflects the best currently available
estimates and judgments of the management of the General Partner and
Petro, respectively. A.G. Edwards reviewed numerous sets of projections
for Petro and analyzed what it believed were certain of the major
assumptions embedded within Petro's projections. A.G. Edwards used two
sets of projections for Petro to perform its analyses. A.G. Edwards used
a set of projections based on 30-year weather and a set of projections
based on 15-year weather. The Special Committee did not, however, engage
A.G. Edwards to, and therefore A.G. Edwards did not verify the accuracy
or completeness of any such information. A.G. Edwards has relied upon the
assurances of the management of the General Partner and Petro that the
respective managements are not aware of any facts that would make such
information inaccurate or misleading.

Page 3

INTRODUCTION
(continued)

[_]   In performing its analyses, A.G. Edwards made numerous assumptions
with respect to the retail propane distribution industry and the
retail home heating oil distribution industry, and general business
and economic conditions which are beyond the control of the
Partnership and Petro. The analyses performed by A.G. Edwards are not
necessarily indicative of actual values or actual future results,
which may be significantly more or less favorable than suggested by
such analyses. Such analyses were prepared sole as part of A.G.
Edwards' analysis of the fairness, from a financial point of view, to
the Public Common Unitholders of the Transaction.

[_]   This presentation is for the private use of the Special Committee and
may not be distributed to any other parties without A.G. Edwards'
written permission. THE ANALYSES PRESENTED HEREIN RELATE TO THE
FAIRNESS OPINION TO BE ISSUED BY A.G. EDWARDS, BUT DO NOT COMPRISE THE
FAIRNESS OPINION.

[_]   A.G. Edwards' Fairness Opinion, in any event, is limited to the
fairness, from a financial point of view, to the Public Common
Unitholders of the Transaction. The Fairness Opinion does not
constitute a recommendation to any Public Common Unitholders as to how
to vote with respect to the Transaction. The Fairness Opinion does not
represent tax or legal advice. The summary description of the analysis
described herein, is qualified in its entirety by reference to the
full text of the Fairness Opinion.

[_]   The Fairness Opinion is necessarily based upon financial and other
conditions and circumstances existing and disclosed to it as of
February 10, 1999 (except market data, which was as of February 3,
1999.)

ASSUMPTIONS

[_]   In rendering it Fairness Opinion, A.G. Edwards has assumed that the
Transaction will be consummated on the terms contained in the Form S-4
Registration Statement and exhibits thereto, including the Amended and
Restated Agreement and the Plan of Merger, the Exchange Agreement, the
Amended and Restated Agreement of Limited Partnership and the
Conveyance and Contribution Agreements, without any waiver of any
material terms or conditions by the Partnership or Petro. The
assumption that the Financings are consummated in accordance with the
closing conditions of the Amended and Restated Agreement and Plan of
Merger is a material assumption. A.G. Edwards has also assumed that
the withdrawal of Star Gas Corporation as the general partner and the
election of Star Gas LLC as the new general partner will have no
financial impact on the public Common Unitholders.

Page 4

REVIEW OF EVENTS TO DATE

February 11, 1998   [_]  A. G. Edwards presented its qualifications to the 
Special Committee and its legal counsel, Baker & Botts.

March 23, 1998      [_]  Special Committee engaged A. G. Edwards.

March 23, 1998      [_]  A. G. Edwards met with members of the Partnership's
management and Petro's management and submitted a
preliminary data request list.

[_]  A. G. Edwards began due diligence review with
management and other representatives of the
Partnership and of Petro.

March 30, 1998      [_]  A. G. Edwards received data related to its preliminary 
data request list.

April 28, 1998      [_]  Special Committee and A. G. Edwards met to discuss the 
Transaction.

May 4, 1998         [_]  A. G. Edwards submitted a preliminary status report
(the "Preliminary Status Report") to the Special
Committee.

May 7, 1998         [_]  Special Committee and A. G. Edwards met with Petro's
management and PaineWebber to discuss the Transaction
and the Preliminary Status Report.

May 8, 1998         [_]  A. G. Edwards continued onsite diligence at Petro.

May 19, 1998        [_]  A. G. Edwards met with PaineWebber and Petro's 
management to discuss the Transaction.

May 20, 1998        [_]  Special Committee, Baker & Botts and A. G. Edwards held
a conference call to discuss the Transaction.

May 26, 1998        [_]  A. G. Edwards, submitted a revised proposal (the
"Preliminary Draft Proposal") to the Special Committee,
which was subsequently forwarded to Petro at the
Committee's request.

Page 5

REVIEW OF EVENTS TO DATE
(continued)

JULY 28, 1998            [_]  A.G.Edwards submitted another revised proposal
(the "Revised Proposal") on the behalf of the
Special Committee to the Board, the Petro Board
and PaineWebber.

AUGUST 11, 1998          [_]  The Special Committee approved the Revised
Proposal.

AUGUST 13, 1998          [_]  The Petro Board approved the Revised Proposal.

AUGUST 14, 1998          [_]  The Partnership and Petro announced the agreement
in principle.

AUGUST AND SEPTEMBER     [_]  The Special Committee, with assistance from Baker
& Botts and A.G. Edwards, negotiated the terms of
a definitive Agreement and Plan of Merger and
Exchange Agreement with Petro, Andrews & Kurth and
PaineWebber.

OCTOBER 16, 1998         [_]  Special Committee meeting to review documents and
consider and act upon the legal agreements
necessary to implement the Transaction.

-    The Committee had the opportunity to review, 
with Baker & Botts and A.G. Edwards, the 
following:

[_]  Draft dated October 13, 1998 of the Form
S-4 Registration Statement

[_]  Draft dated October 8, 1998 of the 
Agreement and Plan of Merger

[_]  Draft dated October 6, 1998 of the
Amended and Restated Agreement of
Limited Partnership

[_]  Draft dated October 7, 1998 of the 
Exchange Agreement

[_]  Draft dated October 9, 1998 of the 
Conveyance and Contribution Agreements

[_]  A.G. Edwards delivered its Fairness Opinion dated 
October 16, 1998.

Page 6

REVIEW OF EVENTS OF DATE
(continued)

OCTOBER 22, 1998    [_]  The Partnership files the Form S-4 Registration 
Statement

DECEMBER 3, 1998    [_]  The Partnership files the Form S-3 Registration 
Statement

DECEMBER 22, 1998   [_]  The Partnership files Amendment No. 1 to the Form S-4 
Registration Statement to incorporate responses to the
SEC's initial comment letter

JANUARY 13, 1999    [_]  The Special Committee, represented by William
Nicoletti, and A.G. Edwards met with Petro and
PaineWebber at Petro's request. Petro proposed a change
to the merger agreement such that the amount of equity
raised in the Refinancing Transaction would be
increased from $140 million to $170 million and the
amount of debt raised in the Refinancing Transaction
would be decreased from $120 million to $90 million
(the "Investment Grade Change").

JANUARY 18, 1999    [_]  The Special Committee and A.G. Edwards held a
conference call to discuss the Investment Grade Change.
The Special Committee rejected the change and suggested
that it would only consider the change if it included a
reduction in the purchase price.

JANUARY 21, 1999    [_]  The Partnership files Amendment No. 2 to Form S-4
Registration Statement to incorporate responses to the
SEC's second comment letter

JANUARY 25, 1999    [_]  The Special Committee, A.G. Edwards, Petro and
PaineWebber received a letter from Thomas Edelman
outlining a proposal that included the Investment Grade
Change in return for, among other things, a 10%
reduction in the conversion ratio. The proposal also
included a modest increase in the Cost of Capital Test,
but only if Petro was successful in obtaining a
purchase price discount from its preferred or other
senior security holders.

Page 7

REVIEW OF EVENTS TO DATE
(continued)

JANUARY 26,  1999   [_]  The Special Committee, Baker & Botts and A.G. Edwards
held a conference call to discuss the Edelman proposal.
The Special Committee agreed, with certain
modifications, to approve the Edelman proposal subject
to a re-evaluation of, among others, the Cost of
Capital Trust; the 1999 Distribution Test for the
Senior Subordinated, Junior Subordinated and GP units;
the DPU test; and the working capital test.

FEBRUARY 4,  1999   [_]  The Partnership files Amendment No. 3 to the Form S-4
Registration Statement both to incorporate the SEC's
third comment letter and to reflect the proposed
changes to the merger agreement.

FEBRUARY 10, 1999   [_]  Special Committee meeting to review documents and
consider and act upon the legal agreements necessary to
implement the Transaction.

-    The Committee had the opportunity to review, with 
Baker & Botts and A.G. Edwards, the following:

[_]  Draft dated February 4, 1999 of the Form S-4
Registration Statement

[_]  Draft dated February 3, 1999 of the Amended 
and Restated Agreement and Plan of Merger

[_]  Draft dated February 3, 1999 of the Amended 
and Restated Agreement of Limited Partnership

[_]  Draft dated February 3, 1999 of the Exchange 
Agreement

[_]  Draft dated October 22, 1998 of the 
Conveyance and Contribution Agreements

Page 8

SUMMARY OF THE TRANSACTION
PRO FORMA STAR GAS UNITS OUTSTANDING
(IN THOUSANDS EXCEPT PER SHARE AND PER UNIT)

[_]  There are currently 6,383 Star Gas units outstanding comprised of 3,859
common units, 2,396 subordinated units and 128 implied general partner
("GP") units. The subordinated units and GP units are currently assets of
Petro.

[_]  There are currently 26,463 shares of Petro common stock outstanding held
by public shareholders and "affiliates." The public holds 14,327 Class A
shares, 11 Class B shares and 291 Class C shares. The "affiliates" hold
11,834 shares which include 9,528 Class A shares and 2,306 Class C
shares.

[_]  Each shareholder of Petro will receive a certain number of units in Star
Gas such that the implied consideration paid for each Petro share
averages $1.91 based on A.G. Edwards' estimates of the value of the units
being offered to Petro as consideration.

[_]  All of the publicly held 14,327 Class A shares and 291 Class C shares,
and a portion of the "affiliate" held Class A shares (5,243) and Class C
shares (1,328) will receive .11758 units of newly created senior
subordinated units for each share (1,719 units to the public and 773
units to the "affiliates", 2,492 units in total) with an attached
Contingent Unit ("CU"). See the following page for a discussion of the
Contingent Units. A.G. Edwards estimates an implied value for these units
of $16.22/unit. The remaining "affiliates" of Petro not receiving senior
subordinated units, who hold a total of 5,262 shares, will receive .14318
units for a total of 753 junior subordinated and GP units, both of which
will also include attached CUs. A.G. Edwards estimates an implied value
for these units of $13.35/unit.

[_]  The 2,396 subordinated units and 128 GP units currently owned by Petro will
effectively be retired in the Transaction 

Page 9

SUMMARY OF THE TRANSACTION
PRO FORMA STAR GAS UNITS OUTSTANDING
(IN THOUSANDS)
(continued)

DESCRIPTION OF CONTINGENT UNITS

[_]  During the five year period, beginning with the first full four
quarters following the Merger, the senior subordinated units, junior
subordinated units and general partner interests will have the right
to receive up to 909,000 senior subordinated units upon Petro meeting
a "Contingent Unit Test." Each time the Contingent Unit Test is met
(but not more frequently than once every four quarter period), the
senior subordinated units, junior subordinated units and general
partner interests will receive an aggregate of 303,000 senior
subordinated units, subject to a maximum of 909,000 senior
subordinated units. The Contingent Unit Test will be met during any
four quarter period when distributable cash flow per unit attributable
to Petro exceeds $2.90.

Page 10

SUMMARY OF THE TRANSACTION
ALLOCATION OF CURRENT PETRO SHARES OUTSTANDING
(IN THOUSANDS)

--------------------------------------------------------------------------
Class A    Class C     Total
---------  ---------  --------

Groups Receiving Senior Sub
---------------------------
Public                                        14,327      291       14,618
Affiliates                                     5,243    1,328        6,572
---------  ---------  --------
Total Receiving Senior Sub                    19,570    1,619       21,190

Groups Receiving Junior Sub and GP
----------------------------------
Affiliates                                     4,284      978        5,262
---------  ---------  --------

Sub Total                                     23,855    2,598       26,452
=========  =========  

Class B                                                                 11
--------

Total Shares including Class B                                      26,463
========

Page 11

SUMMARY OF THE TRANSACTION
PRO FORMA STAR GAS UNITS OUTSTANDING
PRE-FINANCING ASSUMPTIONS
(IN THOUSANDS)

--------------------------------------------------------------------------------
Issued to Petro
--------------------
Type of Units              Current   Public    Affiliates   Retired   Pro Forma
-----------------------   --------   ------    ----------   -------   ---------

Common                       3,859        -             -         -       3,859

Senior Subordinated              -    1,719           773         -       2,492 

Subordinated                 2,396        -             -    (2,396)          -

Junior Subordinated                                      
& New General Partner          -        -           753         -         753

Old General Partner            128        -             -      (128)          -
--------                                    ---------

6,383                                        7,104

Page 12

SUMMARY OF THE TRANSACTION
EQUITY PURCHASE PRICE CALCULATION
IMPLIED EQUITY VALUE OF PETRO'S ASSETS
(UNITS IN THOUSANDS, $ IN THOUSANDS, EXCEPT PER UNIT AMOUNTS)

--------------------------------------------------------------------------------------------------
Value of Securities              
Event                                                            Issued to and Retired from Petro       
-------------------------------------------------------          ---------------------------------

Issuance of Senior Subordinated                                                                         
Units to Public Petro Shareholders                                    1,719        x        $16.22           
----------------------------      
$27,879                

Issuance of Senior Subordinated                                                                         
Units to Affiliate Petro Shareholders                                   773        x        $16.22      
----------------------------      
$12,540                 

Issuance of Junior Subordinated                                                                       
& General Partner Units to Affiliate Petro Shareholders                 753        x        $13.35     
----------------------------     
$10,059               

----------
PURCHASE PRICE OF PETRO'S EQUITY                                                 $50,478               

--------------------------------------------------------------------------------------------------
Divided by 26,452 shares of Petro's Common Stock =                             $1.91 per share
(Excludes 11 Class B Shares)            
--------------------------------------------------------------------------------------------------

Retire Subordinated Units held by Petro                               (2,396)      x        $13.35             
----------------------------             
($31,988)                      

Retire Old General Partner Units held by Petro                         (128)       x        $19.08 (a)         
----------------------------             
($2,435)                      

----------                     
EQUITY VALUE OF PETRO'S HEATING OIL ASSETS                                       $16,054                        

___________________
(a)  Star 20-day average common unit price through 2/3/99.

Page 13

SUMMARY OBSERVATIONS AND CONCLUSIONS

POTENTIAL STRUCTURAL AND QUALITATIVE ADVANTAGES AND DISADVANTAGES TO THE 
PUBLIC COMMON UNITHOLDERS.            

[_] Potential advantages to Public Common Unitholders
-  Increase in the MQD to $2.30
-  Priority in payment of MQD and arrearages over Senior Subordinated, 
Junior Subordinated and G.P. unitholders during subordination period
-  Distributions on Senior Subordinated, Junior Subordinated and G.P. 
units limited to amount of distributable cash generated during 
subordination period
-  Conversion of Contingent Units based on actual results versus 
adjusted for normal weather
-  Earliest date on which the subordination period would end 
extended to October 2002
-  Potentially a greater number of acquisition growth opportunities in 
the retail home heating oil distribution industry than in the 
retail propane distribution industry and at historically lower
acquisition multiples
-  Increase in market capitalization with potential for more liquidity
-  Diversifies geographic customer base

[_] Potential disadvantage to Public Common Unitholders
-  Petro is several times the Partnership's size, thus changing the 
nature of the Partnership's business
-  Petro's history of operational and financial difficulties
-  Increases seasonality and weather risk
-  Taxable income will increase at a greater rate
-  No assurance that Petro can continue improvements (reduce attrition 
and improve profit margins) while making attractive acquisitions
-  Potential dilution in the event the Partnership pro forma for the 
Transaction fails to meet its projections

Page 14

SUMMARY OF OBSERVATIONS AND CONCLUSIONS

(continued)

Implied Unit Value Analysis

[_]  A. G. Edwards calculated a range of values for the Senior Subordinated,
Junior Subordinated and General Partner units, based on a required rate of
return, trading yield, and discount to the common units. (See Appendix D -
"Implied Unit Value Analysis")
---------------------------------------------------------------------------
ESTIMATED UNIT PRICES SUMMARY

SENIOR SUBORDINATED UNITS
------------------------------------------------------------------
Range
--------------
Required rate of return (a)   20.0% - 30.0%      $12.96 - 16.72     
Trading yield (b)             12.5% - 14.5%      $15.86 - 18.40
Discount to common units (c)  10.0% - 20.0%      $15.26 - 17.17

Range               $12.96 - 18.40  
Adjusted Range (d)  $15.26 - 17.17 

-------------- 
Assumed value (e)       $16.22
--------------

JUNIOR SUBORDINATED AND GP UNITS
------------------------------------------------------------------
Range
--------------
Required rate of return (a)   35.0% - 45.0%      $ 9.19 - 11.50     
Trading yield (b)             15.0% - 17.0%      $13.53 - 15.33
Discount to common units (c)  25.0% - 35.0%      $12.40 - 14.31

Range               $ 9.19 - 15.33  
Adjusted Range (d)  $12.40 - 14.31 

-------------- 
Assumed value (f)       $13.35
--------------

(a)  Represents required rate of return during subordination period, which
is assumed to continue through the end of fiscal 2002. Thereafter, the
rate of return is assumed to equal that of the common units, for a
blended required rate of return of 13.0% to 16.5% for the Senior sub
and 18.4% to 22.6% for the Junior sub and GP units.
(b)  Based on a $2.30 annualized MQD.
(c)  Based on a discount to the common unit's average closing price for the
last 20 trading days as of 2/3/99 of $19.08.
(d)  Represents the middle values of both the range of highs and lows.
(e)  Implied required rate of return, trading yield and discount to common
at a unit price of $16.22 are 21.1% during subordination (13.3%
blended), 14.2%, and 15.0%, respectively.
(f)  Implied required rate of return, trading yield and discount to common
at a unit price of $13.35 are 28.8% during subordination (16.0%
blended), 17.2%, and 30.0%, respectively.

Page 15

SUMMARY OBSERVATIONS AND CONCLUSIONS
(continued)

PRO FORMA MERGER
ANALYSIS               [_]  A.G. Edwards analyzed the impact of the Transaction
on the Partnership's distributable cash flow per
unit, the related accretion, common unit coverage
and total unit coverage on a pro forma basis. (See
Appendix E - "Pro Forma Merger Analysis")

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

15-YEAR WEATHER                  30-YEAR WEATHER          
----------------------------      --------------------------------
STAR GAS                            STAR GAS                   
STAND-ALONE    PRO FORMA           STAND-ALONE      PRO FORMA     
--------------  ------------      ---------------   -------------- 

DCF PER UNIT                                                                                            
1998 Actual                            $1.30          $1.44            $1.30            $1.44        
1999 Adjusted for Actual (a)            1.41           1.96             1.51             2.07
2000 Projected                          1.77           2.14             2.02             2.39

ACCRETION / DILUTION                                                               
1998 Actual                                           $0.13                             $0.13
1999 Adjusted for Actual (a)                           0.56                              0.56
2000 Projected                                         0.37                              0.37

COMMON UNIT COVERAGE                                                             
1998 Actual                             0.98x          0.78x            0.98x            0.78x
1999 Adjusted for Actual (a)            1.04           1.06             1.13             1.12  
2000 Projected                          1.27           1.14             1.49             1.29    

TOTAL UNIT COVERAGE                                                              
1998 Actual                             0.59x          0.62x            0.59x            0.62x  
1999 Adjusted for Actual (a)            0.64           0.85             0.68             0.90   
2000 Projected                          0.80           0.93             0.92             1.04

-------------------------------------------------------
(a) Adjusted to include actual results through January 
21, 1999.

Page 16

SUMMARY OF OBSERVATIONS AND CONCLUSIONS
(continued)

MERGER PREMIUMS TO MARKET VALUE ANALYSIS

[_]  A.G. Edwards analyzed the premium of the consideration to be received by 
Petro Common Stockholders and compared the premium to Petro's current and 
historical prices. These premiums were compared to premiums paid in 
acquisitions of majority or remaining interests announced and completed 
between January 1, 1996 and February 3, 1999 where the target's share price
one week prior to the announcement date was either (i) equal to or less 
than $5, (ii) greater than $5 and less than $10, or (iii) equal to or 
greater than $10. (See Appendix F - "Merger Premiums to Market Value 
Analysis")

[_]  Premiums were calculated one day, one week, four weeks, three months and 
one year prior to the announcement of the agreement in principle for each 
merger.

- ------------------------------------------------------------------------------------------------------------------------------------
COMPARISON OF PREMIUMS PAID
- ------------------------------------------------------------------------------------------------------------------------------------
Petro at     Mean of Transactions     Mean of Transactions     Mean of Transactions
Premium to stock price prior to announcement $1.91 per Unit       Equal to or            Greater Than $5            Equal to or
of the transaction on August 14th:             Offer Price       Less Than $5           and Less Than $10        Greater Than $10
- ------------------------------------------------------------------------------------------------------------------------------------

One day prior:                               1.9%              57.8%                    34.3%                   28.4%

One week prior:                              9.1%              68.5%                    43.2%                   32.9%

Four weeks prior:                           -7.4%              71.1%                    50.1%                   39.4%

Three months prior:                         19.8%              71.8%                    63.6%                   54.7%

One year prior:                            -36.3%              51.9%                    51.3%                   72.1%

--------------------------------------------------------------------------------------------
Maximum       19.8%              71.8%                    63.6%                   72.1%
Minimum      -36.3%              51.9%                    34.3%                   28.4%
--------------------------------------------------------------------------------------------

[_]  The premium to Petro's current stock price ($1.00 as of February 3, 1999) 
was 91.0%.

Page 17

SUMMARY OF OBSERVATIONS AND CONCLUSIONS
(continued)

RELATIVE CONTRIBUTION ANALYSIS

[_]  A.G. Edwards analyzed the relative pro forma contribution of both Star Gas 
and Petro to the ownership of capital in the pro forma entity based on Star
Gas' and Petro's historical results from operations and their respective 
projections. (See Appendix G - "Relative Contribution Analysis")

GROSS PROFIT
---------------------------------------------- 
15-Year Weather         30-Year Weather
---------------------  ----------------------- 
Star Gas     Petro      Star Gas     Petro
----------  ---------  -----------  ---------- 

1996........................   24.3%       75.7%       24.3%       75.7%
1997........................   29.4%       70.6%       29.4%       70.6%
1998........................   28.9%       71.1%       28.9%       71.1%
1999 Adjusted for Actual....   29.1%       70.9%       28.9%       71.1%
2000 Project................   29.7%       70.3%       29.5%       70.5%

EBITDA
---------------------------------------------- 
15-Year Weather         30-Year Weather
---------------------  ----------------------- 
Star Gas     Petro      Star Gas     Petro
----------  ---------  -----------  ---------- 

1996........................   31.3%       68.7%       31.3%       68.7%
1997........................   39.8%       60.2%       39.8%       60.2%
1998........................   35.1%       64.9%       35.1%       64.9%
1999 Adjusted for Actual....   32.0%       68.0%       32.2%       67.8%
2000 Project................   34.1%       65.9%       34.4%       65.6%

Page 18

SUMMARY OF OBSERVATIONS AND CONCLUSIONS

(continued)

[_]  For its gross profit and EBITDA contributions, Star Gas is expected to 
receive approximately 34.8% of the pro forma implied firm value.

IMPLIED FIRM VALUE

[PIE CHART APPEARS HERE]

Page 19

SUMMARY OF OBSERVATION AND CONCLUSIONS

(continued)

DISCOUNTED CASH FLOW ANALYSIS

[_] A.G. Edwards performed discounted cash flow analyses for Petro, Star Gas
and Star Gas Pro Forma. For Petro, A.G. Edwards used projected tax-adjusted
operating cash flows for 1999 through 2002, terminal values calculated on
2002 operating cash flow, and discount rates based on the related weighted
average cost of capital. For Star Gas and Star Gas Pro Forma, A.G. Edwards
used projected DCF for 1999 through 2002, terminal values calculated on
2002 DCF and discount rates based on the related cost of equity. (See
Appendix H -"Discounted Cash Flow Analysis")

===========================================================================================================================
PETRO STAND ALONE
----------------------------------------------------------     ------------------------------------------------------------
15 YEAR      TERMINAL VALUE OPERATING CASH FLOW MULTIPLE       30 YEAR    TERMINAL VALUE OPERATING CASH FLOW MULTIPLE  
------------------------------------------------              ---------------------------------------------------
8.0x       8.5x      9.0x       9.5x     10.0x                8.0x       8.5x      9.0x       9.5x        10.0x
---------------------------------------------------------------------------------------------------------------------------
WACC                                                           WACC

13.4%   ($40,163)  ($30,848) ($21,534)  ($12,219)    ($2,904)    13.4%  ($25,454)  ($15,542) ($5,630)   $  4,282    $ 14,194

13.6%    (41,742)   (32,500)  (23,259)   (14,017)     (4,775)    13.6%   (27,131)   (17,297)  (7,463)      2,372      12,206

13.9%    (43,307)   (34,137)  (24,967)   (15,797)     (6,628)    13.9%   (28,793)   (19,036)  (9,278)        479      10,237
---------------------------------------------------------------------------------------------------------------------------

STAR GAS STAND ALONE
------------------------------------------------------------      ---------------------------------------------------------
15 YEAR         TERMINAL VALUE DCF MULTIPLE                       30 YEAR        TERMINAL VALUE DCF MULTIPLE
---------------------------------------------------              -------------------------------------------------
8.5x       9.0x       9.5x      10.0x     10.5x                  8.0x       8.5x     9.0x        9.5x     10.0x
---------------------------------------------------------------------------------------------------------------------------   
Cost of                                                            Cost of 
Equity                                                             Equity 

9.5%    $77,230    $80,338   $83,447    $86,555    $89,664        9.5%   $79,410    $82,745  $86,080    $89,415    $92,749

9.9%     76,359     79,427    82,495     85,563     88,631        9.9%    78,519     81,811   85,102     88,394     91,685 

10.3%     75,502     78,530    81,559     84,587     87,616       10.3%    77,642     80,891   84,140     87,389     90,638
---------------------------------------------------------------------------------------------------------------------------

STAR GAS PRO FORMA
------------------------------------------------------------       --------------------------------------------------------
15 YEAR         TERMINAL VALUE DCF MULTIPLE                    30 YEAR              TERMINAL VALUE DCF MULTIPLE
---------------------------------------------------            ---------------------------------------------------
8.5x       9.0X       9.5x      10.0x     10.5x                  8.0x       8.5x     9.0x        9.5x     10.0x
---------------------------------------------------------------------------------------------------------------------------   
Cost of                                                        Cost of
Equity                                                         Equity 

9.5%    $92,737    $96,408   $100,079   $103,750   $107,421     9.5%     $94,817    $98,730   $102,642   $106,555  $110,467

9.9%     91,701     95,324    98,948     102,571    106,194     9.9%      93,764     97,626    101,488    105,349   109,211

10.3%     90,682     94,258    97,834     101,411    104,987    10.3%      92,728     96,539    100,351    104,163   107,974
----------------------------------------------------------------------------------------------------------------------------

Page 20

SUMMARY OF OBSERVATIONS AND CONCLUSIONS
(continued)

COMPARABLE TRANSACTIONS ANALYSIS

[_]  A.G. Edwards noted that public disclosure regarding transactions in the 
retail home heating oil distribution industry was extremely limited.

[_]  A.G. Edwards analyzed the financial terms related to divestitures by 
Petro of certain of its retail home heating oil branches and compared 
them to the implied multiples of the aggregate purchase price of 
Petro's heating oil assets.

[_]  Petro has sold three branches for an average EBITDA multiple of 9.0x.
-----------------------

[_]  A.G. Edwards calculated the purchase price of Petro's heating oil assets
and calculated multiples based on Petro's EBITDAs (See Appendix I -
"Comparable Transaction Analysis")

-----------------------------------------------------------------------------
Purchase Price of Heating Oil Assets
---------------------------------------------

Equity purchase price of heating oil assets
including SIRs                                                 $ 16,054

Cost of Debt to be Redeemed ($206,250 + $2,844 premium)           209,094

Cost of Debt to be Assumed                                         80,501

Cost of Preferred stock at Redemption Value                        31,767

Consent Fees                                                        1,961

Transaction Fees                                                   19,139
--------

Aggregate purchase price of heating oil assets                   $358,516
--------

MULTIPLES
- ------------------------------------------------------------------------------------------------------------------------------------
Notes
--------------------------------------------
15 - YEAR             30 - YEAR
--------------------  ------------------

Actual 4 quarters ended 9/30/98 EBITDA (a)      34,929      10.3x     34,929     10.3x  As a multiple of aggregate transaction value

Adjusted for actual 1999 EBITDA (a)             43,475       8.2x     44,415      8.1x  As a multiple of aggregate transaction value

Projected 2000 EBITDA (a)                       45,978       7.8x     48,195      7.4x  As a multiple of aggregate transaction value

__________________________________
(a) Calculated as gross profit minus SG&A expense and direct delivery expense.

Page 21

SUMMARY OF OBSERVATION AND CONCLUSIONS
(continued)

PUBLIC PARTNERSHIP ANALYSIS

[_]  A.G. Edwards compared certain financial and market information of Star Gas
on a historical and pro forma basis to that of certain public propane
master limited partnerships which A.G. Edwards deemed relevant for the
purposes of this analysis. A.G. Edwards reviewed the trading multiples of a
total of five master limited partnerships. (See Appendix J - "Public
Partnership Analysis")

[_]  The selected propane master limited partnerships are as follows:
-  AmeriGas Partners, L.P.              - Heritage Propane Partners, L.P.
-  Cornerstone Propane Partners, L.P.   - Suburban Propane Partners, L.P.
-  Ferrellgas Partners, L.P.

[_]  No partnership used in the analysis is identical to Star Gas.

- ------------------------------------------------------------------------------------------------------------------------------------
PUBLIC COMPARABLE PARTNERSHIPS (a)
- ------------------------------------------------------------------------------------------------------------------------------------
STAR                   PRO FORMA STAR       PUBLIC PARTNERSHIP   PUBLIC PARTNERSHIP
--------------------------  --------------------------
15 - Year      30 - Year     15 - Year     30 - Year        MEDIANS              RANGES   
- ------------------------------------------------------------------------------------------------------------------------------------

Yield                                   12.2%          12.2%         12.7%          12.7%          10.4%           8.6%  to  12.3%
Market capitalization/LTM EBITDA        11.9x          11.9x         10.3x          10.3x          11.5x           9.1x  to  13.2x
Market capitalization/1999E EBITDA      11.0x          10.7x          8.7x           8.4x           9.8x           8.6x  to  11.3x
Equity Market Cap/LTM DCF               13.8x          13.8x         12.6x          12.6x          13.2x           9.6x  to  15.5x
Equity Market Cap/1999E DCF (c)         12.5x          11.9x          8.9x           8.5x          10.5x           9.9x  to  12.2x
- ------------------------------------------------------------------------------------------------------------------------------------

(a)  Public comparable partnerships include: APU, CNO, FGP, HPG and SPH.
(b)  Market capitalization/adjusted for actual 1999 EBITDA for Star and Pro 
Forma Star.
(c)  Equity market cap/adjusted for actual 1999 EBITDA for Star and Pro Forma 
Star.

Page 22

EXHIBIT (b)(20)

Appendix I to

FAIRNESS OPINION PRESENTATION TO THE 

SPECIAL COMMITTEE OF THE BOARD OF DIRECTORS OF 

STAR GAS CORPORATION

Analyses performed under 30-year weather scenario

CONFIDENTIAL 

A.G. EDWARDS & SONS, INC.
INVESTMENT BANKING

February 10,1999

TABLE OF CONTENTS

Section
-------

Overview of Petroleum Heat and Power Co., Inc.........................   A

Overview of Star Gas Partners, L.P....................................   B

Summary of the Transaction............................................   C

Implied Unit Value Analysis...........................................   D

Pro Forma Merger Analysis.............................................   E

Merger Premiums to Market Value Analysis..............................   F

Relative Contribution Analysis........................................   G

Discounted Cash Flow Analysis.........................................   H

Comparable Transactions Analysis......................................   I

Public Partnership Analysis...........................................   J

Pro Forma Model.......................................................   K

OVERVIEW OF PETROLEUM HEAT AND POWER CO., INC. ("PETRO")
SELECTED FINANCIAL DATA
($ IN THOUSANDS)

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

HISTORICAL YEARS ENDED DECEMBER 31,
------------------------------------------------------------------------------------
1993        %         1994(a)       %       1995(a)       %          1996 
-------------------------------------------------------------------------------------------------------------------------------

Net sales                                     $538,526   100.0%      $546,677    100.0%    $609,507    100.0%      $608,161
Cost of sales                                  366,810    68.1%       362,981     66.4%     387,825     63.6%       427,388
----------------------   --------------------  --------------------  ---------------
Gross profit                                   171,717    31.9%       183,696     33.6%     221,682     36.4%       180,773

SG&A expenses                                   93,379    17.3%        95,314     17.4%     128,295     21.0%       105,601
Direct delivery expense                         29,902     5.6%        32,995      6.0%      36,634      6.0%        33,102
Restructuring charges                              -                      -                     -                     1,150
Star transaction expenses                          -                      -                     -                       -
Corporate identity expenses                        -                      -                     -                     2,659
Pension curtailment expense                        -                      -                     -                       557
Amortization of customer lists                  23,183     4.3%        19,748      3.6%      20,527      3.4%        18,611
Depreciation of plant and equipment              5,933     1.1%         6,469      1.2%      12,374      2.0%         6,574
Amortization of deferred charges                 5,548     1.0%         6,177      1.1%       6,142      1.0%         4,760
Provision for supplemental benefits                264     0.0%           373      0.1%       1,407      0.2%           873
----------------------   --------------------  --------------------  ---------------
Operating income (loss)                         13,509     2.5%        22,619      4.1%      16,303      2.7%         6,886
Interest expense, net                          (20,508)   -3.8%       (23,766)    -4.3%     (38,792)    -6.4%       (32,412)
Other income (expense)                            (165)    0.0%           109      0.0%         218      0.0%         1,842
----------------------   --------------------  --------------------  ---------------
Loss before income taxes, equity interest
and extraordinary item                     (7,164)   -1.3%        (1,038)    -0.2%     (22,271)    -3.7%       (23,684)
Income taxes                                       400     0.1%           600      0.1%         500      0.1%           500
----------------------   --------------------  --------------------  ---------------
Loss before equity interest and 
extraordinary item                         (7,564)   -1.4%        (1,638)    -0.3%     (22,771)    -3.7%       (24,184)
Share of income (loss) of Gas                      -       0.0%        (1,973)    -0.4%         728      0.1%         2,283
----------------------   --------------------  --------------------  ---------------
Extraordinary item-loss on early
extinguishment of debt                       (867)   -0.2%          (655)    -0.1%      (1,436)    -0.2%        (6,414)
----------------------   --------------------  --------------------  ---------------
Net loss                                        (8,431)   -1.6%        (4,266)    -0.8%     (23,479)    -3.9%       (28,315)
Preferred stock dividends                       (3,367)   -0.6%        (3,510)    -0.6%      (3,263)    -0.5%        (2,389)
----------------------   --------------------  --------------------  ---------------
Net loss to common                            ($11,798)   -2.2%       ($7,776)    -1.4%    ($26,742)    -4.4%      ($30,704)
======================   ====================  ====================  ===============

Net loss per share                              ($0.55)                ($0.36)               ($1.06)                 ($1.02)
============             ============          ===========           ===============

Weighted average shares outstanding (b)         21,538                 21,745                25,309                  25,581

EBITDA (c)                                     $48,437     9.0%       $55,387     10.1%     $56,753      9.3%       $42,070
Adjusted net loss to common                    (10,931)   -2.0%(d)     (7,121)    -1.3%(e)  (25,306)    -4.2%(f)    (22,583)

Adjusted net loss per share                     ($0.51)                ($0.33)               ($1.00)                 ($0.88)
============             ===========           ===========           ===============

Acquisition capital expenditures               $15,399                $26,411               $26,438                 $28,493
Maintenance capital expenditures (i)             3,000                  3,000                 3,000                   3,000
EBITDA/total assets                               18.9%                  13.9%                 15.9%                   15.3%
Distributable cash flow                         24,528                 28,020                14,461                   6,158

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

HISTORICAL YEARS ENDED DECEMBER 31,
------------------------------------------------------------------
%           1997           %             1998        %
--------------------------------------------------------------------------------------------------------------

Net sales                                      100.0%       $548,141       100.0%       $408,019     100.0% 
Cost of sales                                   70.3%        379,748        69.3%        265,526      65.1%
-----------   -------------------------   ------------------------   
Gross profit                                    29.7%        168,393        30.7%        142,493      34.9%

SG&A expenses                                   17.4%        102,377        18.7%         87,268      21.4%     
Direct delivery expense                          5.4%         30,006         5.5%         24,613       6.0%
Restructuring charges                            0.2%          2,850         0.5%            535       0.1%
Star transaction expenses                                        -                         4,823       1.2%
Corporate identity expenses                      0.4%          4,136         0.8%            152       0.0%
Pension curtailment expense                      0.1%            654         0.1%            -         0.0%
Amortization of customer lists                   3.1%         17,903         3.3%         17,117       4.2%
Depreciation of plant and equipment              1.1%          7,204         1.3%          6,969       1.7%
Amortization of deferred charges                 0.8%          4,639         0.8%          2,451       0.6%
Provision for supplemental benefits              0.1%            565         0.1%            358       0.1%
-----------   -------------------------   ------------------------   
Operating income (loss)                          1.1%         (1,941)       -0.4%         (1,793)     -0.4%
Interest expense, net                           -5.3%        (31,668)       -5.8%        (30,732)     -7.5%
Other income (expense)                           0.3%         11,445         2.1%          1,292      -0.3%
-----------   -------------------------   ------------------------   
Loss before income taxes, equity interest       
and extraordinary item                     -3.9%        (22,164)       -4.0%        (33,817)     -8.3%
Income taxes                                     0.1%            500         0.1%            400       0.1%
-----------   -------------------------   ------------------------   
Loss before equity interest and                 
extraordinary item                         -4.0%        (22,664)       -4.1%        (34,217)     -8.4%
Share of income (loss) of Gas                    0.4%           (235)        0.0%         (1,120)     -0.3%
-----------   -------------------------   ------------------------   
Extraordinary item-loss on early                
extinguishment of debt                     -1.1%            -
-----------   -------------------------   ------------------------   
Net loss                                        -4.7%        (22,899)       -4.2%        (35,337)     -8.7% 
Preferred stock dividends                       -0.4%         (4,644)       -0.8%         (4,814)     -1.2%
-----------   -------------------------   ------------------------   
Net loss to common                              -5.0%       ($27,543)       -5.0%       ($40,151)     -9.8% 
===========   =========================   ========================   

Net loss per share                                            ($1.06)                     ($1.52)
============                ============ 

Weighted average shares outstanding (b)                       26,039                      26,463

EBITDA (c)                                       6.9%        $36,010         6.6%        $30,612
Adjusted net loss to common                     -3.7%(g)     (35,439)       -6.5%(h)     (39,616)   

Adjusted net loss per share                                   ($1.36)                     ($1.50)
============                ============ 

Acquisition capital expenditures                             $16,252                          $0
Maintenance capital expenditures (i)                           3,000                       3,000  
EBITDA/total assets                                             14.5%                       15.3%
Distributable cash flow                                          842                      (3,520)

---------------------------------------------------------------------------
(a) Star Gas operations consolidated into Petro.
(b) Weighted shares do not include Class B shares.
(c) Calculated as gross profit minus SG&A expense and direct delivery 
expense.
(d) Excludes $867 for early extinguishment of debt.
(e) Excludes $655 for early extinguishment of debt.
(f) Excludes $1,436 for early extinguishment of debt.
(g) Excludes $6,414 for early extinguishment of debt.
(h) Excludes $11,400 gain on sale of TLC.
(i) Management's estimates.

Page A-1

OVERVIEW OF PETRO
EBITDA RECONCILIATION: 1997(a)
($ IN THOUSANDS)

=============================================================================
PETRO
-----

1997 Actual EBITDA                                                $36,010

NORMALIZING ADJUSTMENTS:

Weather was 3.8% warmer than 30-year normal

3.8% of 1997 budgeted retail gallons           13,482 gallons  

Gross profit margin                                   $0.4545   

Delivery and garage cost savings                     ($0.0814)  
-------   

Net impact per gallon                                 $0.3731    

$ impact                                                          5,030    

Insurance reserve                                                   2,000
-------
1997 Normalized EBITDA                                            $43,040
=======
_____________________________________________________________________________

(a) Management's assumptions.

Page A-2

OVERVIEW OF PETRO
EBITDA RECONCILIATION: 1997-1998(a)
($ IN THOUSANDS)

==========================================================================================================
PETRO     
-------     

1997 Normalized EBITDA                                                                            $43,040     

Volume Adjustments for 1998 

Sale of TLC Division in 1997                       (16,926) gallons           

Attrition in 1998 (4.1%)                           (17,375)          

1997 Acquisitions                                    9,828           
--------          
(24,473) gallons  
@          
$0.1700/gallon (b)             (4,159)
Gross Profit Margin Increase               $0.006 per gallon on 395,086 gallons (c)              2,371
Inflation                                                                                       (3,662)

Operating Cost Reductions (d)                                                                    5,850

Non-Budgeted Operating Expense                                                                 
Eliminations (e)                                                                                 3,460  
-------  
Normalized 1998 EBITDA Budget                                                                        $46,900  
=======   
______________________________________________________________________________________________________________

(a)  Management's assumptions.
(b)  Represents the average gross profit per gallon ($4700 per gallon) offset by
$.30 per gallon reduction in operating expenses.
(c)  Actual gross profit margin increase achieved in first quarter of 1998 was
$5.9 million (156 million gallons @ $0.037/gallon).
(d)  Represents already accomplished reductions as of 12/31/97 in branch, 
regional and corporate expenses in excess of normal indexing related to
volume reductions as well as 1% productivity improvements.
(e)  Represent specific operating expense eliminations that have already been 
accomplished.

Page A-3

OVERVIEW OF PETRO
EBITDA RECONCILIATION: NON-BUDGETED OPERATING EXPENSE ELIMINATIONS
($ IN THOUSANDS)

BASE  
EXPENSE
------- 

Exton PA Facility Rent                                 $  500  

Corporate Staff Reductions - Salary & Benefits
Alex Tyshovnytsky                                    310
Allen Levenson                                       279
Joe Massoud                                          310

Total Staff Reductions                                    900

Wage Freeze - Non-Union                                 1,373

Wage Freeze - Union                                       687 
------- 
Total                                                  $3,460

Page A-4

OVERVIEW OF PETRO
EBITDA RECONCILIATION: 1998(a)
($ IN THOUSANDS)

- ----------------------------------------------------------------------------------------------------
PETRO
-----

Normalized 1998 EBITDA Budget                                                     $46,900

Weather was 18.2% warmer than 30-year normal (17.7% volume 
variance)
17.7% of 1998 budgeted retail gallons                       70,096 gallons   
Gross profit margin                                        $0.4761
Delivery and garage cost savings                          ($0.1046)
---------
Net impact per gallon                                      $0.3715           
$ impact                                                                        (26,041)

Margin Improvement ($0.0288/gallon)                                                 9,385

Additional Non-Budgeted Operating Expense Eliminations                                368
---

Actual 1998 EBITDA                                                                $30,612
=======

- --------------------------------------------------------------------------------
(a)  Management's assumptions.

Page A-5

OVERVIEW OF PETRO
EBITDA RECONCILIATION: 1998-1999(a)
($ IN THOUSANDS)

===========================================================================================================
PETRO
-----

Normalized 1998 EBITDA Budget                                                                 $46,900

Attrition (3.8%) and Inflation (3.0%) partially offset by $0.01 Margin Increase in 1999        (1,352) 

Acquisition Growth
$15,000 of acquisitions at 4.75x multiple using half-year convention (b)                    1,579 

Actual results through January 21, 1999                                                        (2,712)
-----

1999 Adjusted for Actual                                                                      $44,415
========
___________________________________________________________________________________________________________

(a) Management's assumptions.
(b) A.G. Edwards' assumptions.

Page A-6

OVERVIEW OF PETRO
EBITDA SUMMARY
($ IN THOUSANDS)

==================================================================
PETRO
-----

1997 Actual                                               $36,010
1997 Normalized                                           $43,040

Normalized 1998 Budget                                    $46,900

Actual LTM through 9/30/98                                $34,929

Actual 1998                                               $30,612

1999 Adjusted for Actual                                  $44,415
------------------------------------------------------------------

Page A-7

OVERVIEW OF PETRO
EBITDA PROJECTIONS
($ IN THOUSANDS)

--------------------------------------------------------------------------------------------
PROJECTED
--------------------------------------------
ACTUAL    ACTUAL    NORMALIZED     ADJUSTED FOR
LTM 9/98    1998        1998         ACTUAL 1999    2000      2001      2002
---------------------------------------------------------------------------------

EBITDA       $34,929   $30,612     $46,900         $44,415    $48,195   $50,649   $52,834

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

MAJOR ASSUMPTIONS FOR 1999-2002
-------------------------------

[_] 30 Year Weather

[_] Flat Attrition.

[_] $15 million in 1999 and $30 million in 2000 to 2002 of acquisitions at 
4.75x EBITDA multiple using half-year convention.

[_] Increase in gross profit margin of $0.01 in 1999 and $0.005 annually in 
2000 to 2002.

Page A-8

OVERVIEW OF PETRO
ATTRITION ANALYSIS

- ------------------------------------------------------------------------------------------------------------------------------------
Average Accounts           Absolute Account Losses         Loss Rate              Gains          Net Attrition Rate
----------------------------   -----------------------------   ----------------     -----------------   --------------------
Base Business,                  Base Business,                                                           Base
Year    Total    excl. Acquisitions    Total     excl. Acquisitions    Total     Base       Accounts      %     Total     Business
- -----   -------   ------------------   -------    ------------------   --------   -----     -----------  -----  --------  ----------

1993   391,454        352,576          70,127         56,459            17.9%    16.0%        47,090    12.0%    -5.9%     -4.0%
1994   386,235        354,786          57,442         46,386            14.9%    13.1%        35.380     9.2%    -5.7%     -3.9%
1995   381,842        344,342          59,550         46,366            15.6%    13.5%        34,516     9.0%    -6.6%     -4.5%
1996   386,398        354,471          60,084         48,860            15.5%    13.8%        39,192    10.1%    -5.4%     -3.7%
1997   366,421        342,738          60,407         52,581            16.5%    15.3%        39,561    10.8%    -5.8%     -4.5%

- ------------------------------------------------------------------------------------------------------------------------------------
Mean    382,470        349,783          61,522         50,130            16.1%    14.3%        39,148    10.2%    -5.9%     -4.1%
====================================================================================================================================

1998   338,314        318,893          49,968         46,485            14.8%    14.6%        38,699    11.4%    -3.3%     -2.7%

Page A-9

OVERVIEW OF PETRO
ACQUISITION HISTORY
($ IN THOUSANDS)

---------------------------------------------------------------------------------------------------------------------
Date                                                                    EBITDA            Acquired         Cost per
Acquired      Company              Purchase Price        EBITDA          Multiple           Gallonage         Gallon
--------      -------              --------------        ------          --------           ---------         ------

1/26/93       Houck Service          $   663.9         $  245.0            2.7x               807.2          $ 0.823
1/28/93       Harris and Gans          1,607.9            475.0            3.4x             2,599.6            0.619 
5/28/93       Goodrich                 2,397.7            672.0            3.6x             4,156.0            0.577
6/4/93        Warren                   2,965.0            712.0            4.2x            14,448.3            0.205
6/23/93       Savin                    1,655.4            403.0            4.1x             2,769.0            0.598
6/25/93       Baylis and Baylis          989.3            251.0            3.9x             1,224.7            0.808
7/28/93       Agway                    1,660.6            315.0            5.3x             2,708.5            0.613
9/28/93       Garden State             1,015.2            312.0            3.3x             1,408.0            0.721
9/29/93       Essex                      866.3            234.0            3.7x             2,649.4            0.327
---------         --------           -----            --------          -------

1993 Totals                     $  13,821         $  3,619            3.8x              32,771          $ 0.422
=========         ========           =====            ========          =======

1/7/94        Petrilla Oil           $   189.5         $   53.4            3.5x               329.0          $ 0.576
3/8/94        Rettig                   1,813.0            466.0            3.9x             4,930.0            0.368
6/30/94       Deblois Oil             15,374.6          2,909.0            5.3x            19,869.0            0.774
7/26/94       Herbert Fuel             5,133.0            882.0            5.8x             6,103.0            0.841
7/28/94       Trico Fuel               3,126.3            930.0            3.4x             4,091.0            0.764
9/1/94        Sickley                  1,261.4            355.0            3.6x             1,702.0            0.741
9/13/94       Sinkler                  4,880.0            948.0            5.1x             7,433.0            0.657
12/1/94       Ryan                     2,954.3            528.0            5.6x             4,804.0            0.615
12/2/94       Fowler                     182.8             37.4            4.9x               354.0            0.516
---------         --------           -----            --------          -------

1994 Totals                     $  34,915         $  7,109            4.9x              49,615          $ 0.704
=========         ========           =====            ========          =======

3/30/95       Reliable Oil           $ 6,065.6         $1,183.0            5.1x            10,102.2          $ 0.600
5/24/95       Rosetta (Waldman)        3,413.2            684.0            5.0x             5,153.6            0.662
5/24/95       Rosetta (Price)            789.4            153.0            5.2x             1,309.5            0.603
7/27/95       Slocum                     643.8            198.0            3.3x               742.6            0.867
8/23/95       Contex                   1,856.8            448.0            4.1x             2,503.2            0.742
8/31/95       Rackliffe                  546.2            139.0            3.9x               904.0            0.604
9/1/95        A-One                    5,184.2          1,164.0            4.5x             5,900.0            0.879
9/11/95       Reading Merchants        4,260.0            656.0            6.5x             3,613.0            1.179
10/25/95      Franklin Fuel              293.5             76.0            3.9x               445.0            0.660
11/17/95      Home Fuel                2,158.9            430.0            5.0x             6,072.3            0.356
12/19/95      Texaco                   3,854.8          1,071.0            3.6x             5,845.1            0.659
---------         --------           -----            --------          -------

1995 Totals                     $  29,066         $  6,202            4.7x              42,590          $ 0.682 
=========         ========           =====            ========          =======

Page A-10

OVERVIEW OF PETRO
ACQUISITION HISTORY
($ IN THOUSANDS)
(continued)

=========================================================================================
DATE                                                    EBITDA    ACQUIRED     COST PER 
ACQUIRED   COMPANY        PURCHASE PRICE   EBITDA        MULTIPLE   GALLONAGE     GALLON  
--------   -------        --------------   ------        --------   ---------     ------  

1/11/96    Garrison          $5,242.5     $1,154.0         4.5x       6,017.0      $0.871 
1/19/96    Cibro              4,367.6      1,087.0         4.0x       6,200.0       0.704 
2/1/96     Seaman             7,133.7      1,552.0         4.6x       7,522.0       0.948 
4/1/96     McDowell           2,723.5        669.0         4.1x       2,675.0       1.018 
9/11/96    Flynn              1,038.0        232.0         4.5x       1,316.0       0.789 
9/24/96    Farren               263.6         69.0         3.8x         481.0       0.548 
10/18/96   Bergen             3,202.5        718.0         4.5x       5,933.0       0.540 
10/18/96   Hightstown           233.5         62.0         3.8x         500.0       0.467 
10/31/96   Hy-Test              813.4        177.0         4.6x       1,468.0       0.554 
12/18/96   Dexter               331.9         99.0         3.4x         796.0       0.417 
12/26/96   Sherman              492.5        103.0         4.8x         564.0       0.873 
12/27/96   Malco                369.2         97.0         3.8x         988.0       0.374 
12/30/96   Grasso               422.9        116.0         3.6x       1,212.0       0.349 
--------     --------     --------      --------    --------                  

1996 TOTALS           $ 26,635     $  6,135         4.3x        35,672      $0.747 
========     ========     ========      ========    ========  

1/15/97    Oils Inc          $  747.6     $  188.0         4.0x       1,189.0       0.629 
4/14/97    Mugullian Fuel     2,801.9        638.0         4.4x       3,000.0       0.934 
5/14/97    Alderfer Heating     401.1        111.0         3.6x         787.0       0.510 
6/26/97    Bellomo            1,488.8        443.0         3.4x       1,657.0       0.898 
7/10/97    Good                 521.4        117.0         4.5x       1,200.0       0.434 
8/29/97    Oil Burner         2,633.1        603.0         4.4x       3,500.0       0.752 
9/10/97    Romary             2,252.5        545.0         4.1x       2,348.0       0.959 
9/29/97    T. W. Perry        1,619.3        439.0         3.7x       2,118.0       0.765 
10/1/97    MillBrook            527.5        112.0         4.7x         908.0       0.581 
11/24/97   Shreve             1,457.0        300.0         4.9x       2,425.0       0.601 
12/18/97   Genovese           1,010.8        281.0         3.6x       1,522.0       0.664 
--------     --------     --------      --------    --------                  

1997 TOTALS           $ 15,461     $  3,777         4.1x        20,654       0.749 
========     ========     ========      ========    ========                  

5 YEAR TOTALS                $119,898     $ 26,842         4.5X      $181,302       0.661  
========     ========     ========      ========    ========  

Page A-11

A.G. Edwards noted that public disclosure regarding transactions in the retail 
home heating oil distribution industry was extremely limited. A.G. Edwards 
analyzed the financial terms related to the divestitures by Petro of certain of 
its retail home heating oil branches.

OVERVIEW OF PETRO
DIVESTITURE HISTORY
($ IN THOUSANDS)

==================================================================================================================================
DATE                                                                                  EBITDA        ACQUIRED        COST PER
DIVESTED   BRANCH              PURCHASER             PURCHASE PRICE      EBITDA        MULTIPLE       GALLONAGE        GALLON 
- --------   ------              ---------             --------------      ------        --------       ---------        ------

3/30/95   New Hampshire  Bellemore Heating Oil, Inc.     $1,477            $150          9.8x            6,060           $0.244   

6/28/96   Punderson      Ultramar Energy, Inc.           $4,073            $443          9.2x            6,900           $0.590

11/4/97   TLC            Heating Oil Partners, L.P.     $16,100          $2,005          8.0x           23,000           $0.700   
--------

MEAN:          9.0x 
--------   

Page A-12

OVERVIEW OF PETRO
MARGIN ANALYSIS 
(Volume in gallons; gallons and $ in thousands, except margins)

============================================================================================================
FISCAL YEARS ENDED DECEMBER 31,
-------------------------------------------------------------------------
1993         1994       1995         1996         1997        1998     
---------    ---------  ----------   ----------   ----------   ---------- 

RETAIL (a)                                                                                                   
Volume                         355,347      360,207     343,759      375,121      338,478      269,405  
Margin                        $ 0.4883     $ 0.5030   $  0.5027    $  0.4993

$  0.5196    $  0.5542  
---------    ---------  ----------   ----------   ----------   ---------- 
Gross profit                  $173,501     $181,202   $ 172,811    $ 187,290    $ 175,867    $ 149,311  

COMMERCIAL                                                                                                   
Volume                          81,515       79,514      75,476       81,020       71,813       55,262  
Margin                        $ 0.2301     $ 0.2416   $  0.2458    $  0.2471    $  0.2452    $  0.2642  
---------    ---------  ----------   ----------   ----------   ---------- 
Gross profit                  $ 18,755     $ 19,214   $  18,554    $  20,018    $  17,607    $  14,602  

PROPANE                                                                                                      
Volume                           6,625        7,435       5,538            -            -            -     
Margin                        $ 0.5352     $ 0.5730   $  0.5805    $  0.0000    $  0.0000    $  0.0000  
---------    ---------  ----------   ----------   ----------   ---------- 
Gross profit                  $  3,546     $  4,260   $   3,215            -            -            -

OTHER PETROLEUM PRODUCTS                                                                                     

Volume                          36,406       35,709      31,228       32,026       29,855       29,790  
Margin                        $ 0.1424     $ 0.1417   $  0.1481    $  0.1401    $  0.1424    $  0.1380  
---------    ---------  ----------   ----------   ----------   ----------  
Gross profit                  $  5,183     $  5,061   $   4,624    $   4,487    $   4,251    $   4,112   

TOTAL PETROLEUM PRODUCTS
Volume                         479,893      482,865     456,001      488,167      440,146      354,457
Margin                        $ 0.4188     $ 0.4344   $  0.4368    $  0.4339    $  0.4492    $  0.4740
---------    ---------  ----------   ----------   ----------   ----------   
Gross profit                  $200,985     $209,737   $ 199,204    $ 211,795    $ 197,725    $ 168,025
---------    ---------  ----------   ----------   ----------   ----------    

DISCOUNTS                          $  1,294     $  1,200   $     944    $   1,084    $     802    $     572
---------    ---------  ----------   ----------   ----------   ----------    

Net service loss                   ($34,243)    ($37,941)   ($33,822)    ($37,386)    ($35,184)    ($30,963)
Net installation income               3,681        4,944       4,364        5,280        5,050        4,859
---------    ---------  ----------   ----------   ----------   ----------   

Gross profit (loss)          ($30,562)    ($32,997)   ($29,458)    ($32,106)    ($30,134)    ($26,104)
---------    ---------  ----------   ----------   ----------   ----------

Gas gross profit                          -     $  5,756   $  50,992            -            -

Total gross profit                 $171,717     $183,696   $ 221,682    $ 180,773    $ 168,393    $ 142,493
=========     =========  ==========   ==========   ==========   ==========

____________________________________________________________________
(a) Includes protected price volumes

Page A-13

OVERVIEW OF PETRO
DISCOUNTED CASH FLOW ANALYSIS
WEIGHTED AVERAGE COST OF CAPITAL DERIVATION
($ IN MILLIONS)
- --------------------------------------------------------------------------------

TOTAL                                   IMPLIED    TOTAL     TOTAL
MARKET         UNIT          TOTAL       MARKET    DEBT/   DEBT AS %     UN-
LEVERED      VAL. DEBT      PRICE AT       UNITS      VALUE OF   TOTAL    OF TOTAL   LEVERED
COMPARABLE COMPANY                  BETA (A)     (BK = MKT)     (2/3/99)     OUT. (MIL)    EQUITY    EQUITY    CAPITAL     BETA
- ------------------------------------------------------------------------------------------------------------------------------------

AmeriGas Partners, L.P.               0.44         $719.0         $23,625       41.9      $1,009.8    71.2%      41.6%     0.257
Cornerstone Propane Partners, L.P.    0.55          263.1          17,500       19.9         355.6    74.0%      42.5%     0.316
Ferrellgas Partners, L.P.             0.47          594.3          18,688       31.3         596.8    99.6%      49.9%     0.235
Heritage Propane Partners, L.P.       0.48          198.3          23,750        8.6         207.9    95.4%      48.8%     0.246
National Propane Partners, L.P.       0.76          139.2           5,063       11.2          58.0   239.8%      70.6%     0.224
Star Gas Partners, L.P.               0.51          115.7          18,063        6.3         115.3   100.4%      50.1%     0.255
Suburban Propane Partners, L.P.       0.44          428.2          19,188       28.7         562.4    76.1%      43.2%     0.250

----------------------------------------------------
Petro's capitalization - at market                  
Total debt (b)                    $309.3   92.1%  
Comparable group's average unlevered beta:                           0.25         Common equity                       26.7    7.9%  
------ ------   
Petro's debt - to - common equity ratio:                           1160.3%
Petro's debt as a percent of total capital (b):                      92.1%                                          $335.9  100.0%  
----------------------------------------------------
Comparable group's beta relevered for Petro's capital structure:    3.209       
=====       

DERIVATION OF WEIGHTED AVERAGE COST OF CAPITAL:                                                MARKET RISK PREMIUM RANGE (E)
- -----------------------------------------------                                            ------------------------------------- 
11.3%   12.3%    13.3%
-------------------------------------
Petro's theoretical levered beta (d):                                     3.209
Assumed % of common equity in Petro's capital structure:                    7.9%
Risk - free rate of return (c):                                             4.8%
Petro's cost of common equity range (at various market risk premiums):                             41.1%   44.3%    47.5%
=====   =====    =====
Petro's assumed tax rate:                                                   0.0%          
Assumed % of debt in capital structure (b):                                92.1%
Petro's estimated cost of debt (f):                                        11.0%
Petro's estimated after - tax cost of debt:                                11.0%                   11.0%   11.0%    11.0%

------------------------------------- 
Petro's weighted average cost of capital range (g):                                                13.4%   13.6%    13.9%
------------------------------------- 

___________________________
(a) Source: Bloomberg, 143 week (maximum weekly time period allowed, or the
number of weeks available, which may be less than 143) adjusted beta
relative to the S&P 500 index. 
(b) Includes preferred stock.
(c) Ten - year Treasury rate on February 3, 1999.
(d) Bloomberg's reported beta for Petro is .70.
(e) Ibbotson Associates 1998. Total returns for small company stocks of 17.7% 
minus the risk-free rate.
(f) Based on Petro's current debt structure.
(g) Calculation based upon use of the Capital Asset Pricing Model (CAPM).

Page A-14

OVERVIEW OF PETRO
SUMMARY OF CAPITAL STRUCTURE
($ IN THOUSANDS)

================================================================================================================================
12/31/98                               2/3/99
BOOK VALUE          COUPON           MARKET PRICE      MARKET VALUE
--------------     --------------    -----------------  ----------------

DEBT: 
Credit Agreement 
Working Capital facility                                 $       0          7.75%                    NA            $       0
Acquisition facility                                             0          7.75%                    NA                    0
Notes payable          
Notes payable for fuel oil dealer purchasers, etc.          14,301     8.0%-10.0%                    NA               14,301
11.85%, 12.17%, 12.18% Senior Notes                         60,000         10.90%                    NA               60,000
14.1% Subordinated and Senior                                6,200         14.10%                    NA                6,200
10.125% Subordinated                                        50,000         10.13%                92.38%               46,188
9.375% Subordinated Debentures                              75,000          9.38%                92.38%               69,281
12.25% Subordinated Debentures                              81,250         12.25%                97.38%               79,117

TOTAL DEBT                                               $ 286,751                                                 $ 275,087
EFFECTIVE COST OF DEBT                                                                                                  10.7%

PREFERRED STOCK:
Redeemable preferred stock                                  $   4,167         14.34%                    NA                4,167
12.875% Exchangeable preferred stock                           30,000         12.88%                    NA               30,000

TOTAL PREFERRED STOCK                                    $  34,167                                                 $  34,167
EFFECTIVE COST OF PREFERRED STOCK                                                                                       1.31%
TOTAL DEBT AND PREFERRED STOCK                              $ 320,918                                                 $ 309,254
EFFECTIVE COST OF DEBT AND PREFERRED STOCK                                                                              11.0%

Page A-15

OVERVIEW OF PETRO 
SUMMARY OF CAPITAL STRUCTURE
($ IN THOUSANDS EXCEPT PER SHARE)
(continued)

================================================================================
12/31/98            2/3/99              
SHARES OUT.        MARKET PRICE      MARKET VALUE
-------------      --------------    --------------

EQUITY:
Common stock
Class A                  23,854,751           $1.000            $ 23,855
Class B                      11,228           17.776 (a)             200
Class C                   2,597,519               NA (b)           2,598

TOTAL EQUITY                                                    $ 26,652
EFFECTIVE COST OF EQUITY                                            44.3%

TOTAL CAPITALIZATION                                               $335,906
WACC                                                                13.6%
Less: Cash                                                        13,804

NET CAPITALIZATION                                                 $322,102

(a)  Market price is calculated as: $17.50+$0.2763
(b)  Market price is assumed to equal that of the Class A shares, since the
Class C shares do not trade.

Page A-16

OVERVIEW OF PETRO

Price and Volume
12/15/95 - 12/31/97

[GRAPH APPEARS HERE]

Page A-17

OVERVIEW OF PETRO

Price and Volume
1/1/98 - 2/3/99

[GRAPH APPEARS HERE]

Page A-18

Overview of Petro
Class A Common Stock Trading History - Volume Distribution
1995-1999 (a)
- ----------------------------------------------------------

- -------------------------------------------------------------------------------------------------------------------------
1995                              1996                            1997  
---------------------------        --------------------------      ---------------------------
Price Per Share                    Volume                    %        Volume                  %        Volume                %
- ----------------------             ---------------------------        --------------------------      ---------------------------
Greater Than   $9.400             
9.200           9.400                  600             100.00%
9.000           9.200                    0              99.99%
8.800           9.000               49,200              99.99%
8.600           8.800                6,800              99.41%
8.400           8.600               67,500              99.33%
8.200           8.400              289,100              98.54%
8.000           8.200              161,500              95.13%         1,600           100.00%         
7.800           8.000              873,500              93.22%        47,400            99.96%
7.600           7.800              245,800              82.92%       236,200            98.87%
7.400           7.600              193,300              80.02%       185,000            93.44%  
7.200           7.400            1,154,800              77.74%       822,300            89.19%
7.000           7.200            5,190,500              64.12%     1,507,100            70.28%                               
6.800           7.000              246,000               2.90%       815,700            35.63%
6.600           6.800                                                498,500            16.88%
6.400           6.600                                                129,300             5.42%         417,300         100.00%
6.200           6.400                                                 37,600             2.45%         526,900          96.34%
6.000           6.200                                                 44,100             1.58%         417,700          91.72%
5.800           6.000                                                 24,700             0.57%         110,200          88.06%
5.600           5.800                                                                                  868,000          87.09%
5.400           5.600                                                                                  143,300          79.48%
5.200           5.400                                                                                   92,600          78.22%
5.000           5.200                                                                                  940,500          77.41%
4.800           5.000                                                                                  142,200          69.16%
4.600           4.800                                                                                   20,200          67.92%
4.400           4.600                                                                                   13,900          67.74%
4.200           4.400                                                                                     -             67.62%
4.000           4.200                                                                                     -             67.62%
3.800           4.000                                                                                  117,100          67.62%
3.600           3.800                                                                                  370,600          66.59%
3.400           3.600                                                                                  250,900          63.34%
3.200           3.400                                                                                1,236,200          61.14%
3.000           3.200                                                                                1,652,500          50.30%
2.800           3.000                                                                                2,785,300          35.81%
2.600           2.800                                                                                  788,500          11.39%
2.400           2.600                                                                                  430,100           4.47%
2.200           2.400                                                                                   79,800           0.70%
2.000           2.200   
Implied Offer Price and 
Pre-Announcement Price  
- ----------------------  
1.800           2.000   
1.600           1.800   
1.400           1.600   
1.200           1.400   
Market Price            
- ----------------------  
1.000           1.200   
0.800           1.000   
0.600           0.800   
Less Than      $0.600   
---------                         ---------                      ----------
Total Stock for Period           8,478,600                         4,349,500                      11,403,800          
Cumulative % of Total Traded                            25.01%                          12.83%                  33.63%   
% Traded of Current Stock Out (b)                       35.54%                          18.23%                  47.81%  
% Traded of Current Float (c)                           82.01%                          42.07%                 110.30%  
Wtd. Average Stock Price             $7.31                             $7.07                           $3.90           

1998                             1999(a)                     1995-1999(a)  
---------------------------        ----------------------           ---------------------
Price Per Share                    Volume                    %        Volume               %           Volume              %
- ----------------------             ---------------------------        ----------------------           ---------------------
Greater Than   $9.400             
9.200           9.400                                                                                      600         100.00%
9.000           9.200                                                                                      -           100.00% 
8.800           9.000                                                                                   49,200         100.00%
8.600           8.800                                                                                    6,800          99.85%
8.400           8.600                                                                                   67,500          99.83%
8.200           8.400                                                                                  289,100          99.63%
8.000           8.200                                                                                  163,100          98.78%
7.800           8.000                                                                                  920,900          98.30%
7.600           7.800                                                                                  482,000          95.58%
7.400           7.600                                                                                  378,300          94.16%
7.200           7.400                                                                                1,977,100          93.05%
7.000           7.200                                                                                6,697,600          87.22%
6.800           7.000                                                                                1,061,700          67.46%
6.600           6.800                                                                                  498,500          64.33%
6.400           6.600                                                                                  546,600          62.86%
6.200           6.400                                                                                  564,500          61.25%
6.000           6.200                                                                                  461,800          59.59%
5.800           6.000                                                                                  134,900          58.22%
5.600           5.800                                                                                  868,000          57.83%
5.400           5.600                                                                                  143,300          55.27%
5.200           5.400                                                                                   92,600          54.84%
5.000           5.200                                                                                  940,500          54.57%  
4.800           5.000                                                                                  142,200          51.80%  
4.600           4.800                                                                                   20,200          51.38% 
4.400           4.600                                                                                   13,900          51.32%
4.200           4.400                                                                                     -             51.28%   
4.000           4.200                                                                                     -             51.28%
3.800           4.000                                                                                  117,100          51.28%
3.600           3.800                                                                                  370,600          50.93%  
3.400           3.600                                                                                  250,900          49.84%
3.200           3.400                                                                                1,236,200          49.10% 
3.000           3.200                                                                                1,652,500          45.45%
2.800           3.000              130,000             100.00%                                       2,915,300          40.58%   
2.600           2.800              249,100              98.66%                                       1,037,600          31.98%
2.400           2.600              270,800              96.08%                                         700,900          28.92%
2.200           2.400              964,300              93.28%                                       1,044,100          26.85%
2.000           2.200              345,000              83.32%                                         345,000          23.77%
- -----------------------
Implied Offer Price and 
Pre-Announcement Price  
- -----------------------  
1.800           2.000            1,789,900              79.25%                                      1,789,900           22.76% 
- ------------------------------------------------------------------------------------------------------------------------------
1.600           1.800            1,097,300              61.25%                                      1,097,300           17.48%   
1.400           1.600            1,863,200              49.91%                                      1,863,200           14.24%
1.200           1.400              130,500              30.65%                                        130,500            8.75%
- ------------------------
Market Price            
- ------------------------  
1.000           1.200            1,612,600              29.30%        879,800      100.03%         1,612,600             8.36%
- ------------------------------------------------------------------------------------------------------------------------------
0.800           1.000              946,900              12.63%        576,000       45.93%           946,900             3.61%
0.600           0.800              275,500               2.85%        171,400       10.53%           275,500             0.81%  
Less Than      $0.600   

---------                         ---------                      ----------
Total Stock for Period           9,675,100                         1,627,200                      33,907,000        
Cumulative % of Total Traded                            28.53%                           4.80%                         100.00% 
% Traded of Current Stock Out (b)                       40.56%                           6.82%                         142.14%
% Traded of Current Float (c)                           93.58%                          15.74%                         327.95%
Wtd. Average Stock Price             $1.62                             $0.99                           $4.51         

- -----------------------------
(a) Through February 3, 1999
(b) Based on 23,854,751 Class A shares outstanding
(c) Based on 10,338,925 Class A shares held by institutional and retail public holders

Overview of Petro
Shareholder Analysis (a)

- ------------------------------------------------------------------------------------------------------------------------------
Class A                    % of Total
Institutions (b)          Shrs. Held     % of Total   Voting Power    Directors and Officers (c)
- -------------------------------------------------------------------------------------------------------------------------------

Dimensional Fund Adv         639,700        2.7%          1.3%        Audrey L. Sevin
CNA Financial Group          360,900        1.5%          0.7%        Ink P. Sevin
Barclays Bark plc            340,573        1.4%          0.7%        Phillip Ean Cohen
Deltec Asset Mgmt            228,528        1.0%          0.5%        Thomas J. Edelman
Northern Trust               216,622        0.9%          0.4%        Vincent De Palma
Vanguard Group               215,500        0.9%          0.4%        Hanseatic Corporation (d) (e)
Bear, Stearns & Co           151,700        0.6%          0.3%        Tortosa (d)
Mellon Bank                  119,904        0.5%          0.2%        Hubertus Langen (d)
Prudential Insurance          48,200        0.2%          0.1%        Wolfgang Traber (c)
IBM Retirement Funds          16,300        0.1%          0.0%        Paul Biddelman (e)
World Asset Management        10,000        0.0%          0.0%        Total Directors & Officers Holdings
DLJ Corp                       4,000        0.0%          0.0%
Legg Mason                     2,000        0.0%          0.0%
---------     --------      --------
All Institutions (c)       2,353,927        9.9%          4.7%

- --------------------------------------------------------------------------------------------------------------------------
Class A                   Class C                    Total        % of Total       
Title                                      Shrs. Held    % of Total   Shrs. Held   % of Total  Voting Power   Voting Power      
- ----------------------------------------  -----------   -----------  -----------  -----------  ------------  -------------

Director and Secretary of Petro and Star    1,876,863       7.9%        477,716      18.4%      6,654,023         13.4%         
Chairman, CEO and Director of Petro           630,227       2.6%        201,641       7.8%      2,646,637          5.3%         
Director of Petro                             679,262       2.8%        113,423       4.4%      1,813,492          3.6%         
Director of Petro and Star                    653,312       2.7%        129,019       5.0%      1,943,502          3.9%         
VP and GM of New York Region                    5,000       0.0%             -        0.0%          5,000          0.0%         
1,777,279       7.5%        298,717      11.5%      4,764,449          9.6%         
-        0.0%        298,717      11.5%      2,987,170          6.0%         
731,473       3.1%          9,038       0.3%        821,853          1.6%         
Director of Petro and Star                         -        0.0%             -        0.0%             -           0.0%         
Director of Petro and Star                      2,386       0.0%             -        0.0%          2,386          0.0%         
---------    ---------    ---------    --------    ----------      ---------        
6,355,802      26.6%      1,528,271      58.8%     21,638,512         43.4%          

Class A                   Class C                    Total        % of Total        
5% Beneficial Owners and Affiliates       Shrs. Held    % of Total   Shrs. Held   % of Total  Voting Power   Voting Power       
------------------------------------      -------------------------------------------------------------------------------
Frank Russell Company (f)                  2,611,000      10.9%             -        0.0%      2,611,000          5.2%     
Schneider Capital                          1,372,000       5.8%             -        0.0%      1,372,000          2.8%     
Richard O'Connell                          1,128,745       4.7%        302,461      11.6%      4,153,355          8.3%     
Brentwood Corp                               681,873       2.9%        120,985       4.7%      1,891,723          3.8%     
Barcel Corporation                           605,151       2.5%        151,231       5.8%      2,117,461          4.2%     
Gabes S.A.                                   597,617       2.5%        124,314       4.8%      1,840,757          3.7%     
United Capital Corp                           90,000       0.4%             -        0.0%         90,000          0.2%     
Minneford Corp                                73,638       0.3%         12,000       0.5%        193,638          0.4%     
Fernando Montero                                  -        0.0%         35,287       1.4%        352,870          0.7%     
M.M. Warburg & Co                                 -        0.0%         31,308       1.2%        318,080          0.6%     
----------    ---------    ---------    --------    ----------      ---------    
Total 5% Beneficial Holdings               7,160,024      30.0%        778,086      30.0%     14,940,884         30.0%     

- ---------------------------------------------------------------------------------------------------------------------------
Summary                                      
-------                                      
% of                      % of        Total         % of Total
Class A       Total       Class C       Total    Voting Power    Voting Power  
-------     ---------    ---------    --------   ------------    ------------    
Insider Holdings                             
Directors and Officers as a Group        6,355,802      26.6%      1,528,271      58.8%     21,638,512         43.4%
5% Beneficial Owners and Affiliates      7,160,024      30.0%        778,086      30.0%     14,940,884         30.0%
----------    ---------    ---------    --------    ----------      ---------    
13,515,826      56.7%      2,306,357      88.8%     36,579,396         73.4%

Public Holdings                              
Institutional Holdings                   2,353,927       9.9%                                2,353,927          4.7%
Retail                                   7,984,998(g)   33.5%        291,162      11.2%     10,896,618         21.9%
----------    ---------    ---------    --------    ----------      ---------    
10,338,925      43.3%        291.162      11.2%     13,250,545         26.6%

Total                                      23,854,751     100.0%      2,597,519     100.0%     49,829,941        100.0%
- ----------------------------------------------------------------------------------------------------------------------------

- ---------------------
(a) Based on shares outstanding, most recently available data as of 2/04/99 and does not include options to purchase and
Class B shares 
(b) Source:  Bloomberg and Petro's Proxy 
(c) Does not include 5% beneficial ownership institutions 
(d) Hanseatic Corporation holds shared voting power in Tortosa. Tortosa owned and controlled by Mr. Largen
(e) Mr. Traber and Mr. Biddelman are executive officers of Hanseatic Corporation.
(f) Frank Russell Company shares beneficial ownership of 1,943,835 Class A with Schneider Capital
(g) AGE has 410,788 Class A shares in its system

WHILE PETRO HAD DECENT COVERAGE IN 1996, IT HAS NOT HAD MUCH SUPPORT IN RECENT 
MONTHS.

OVERVIEW OF PETRO
RESEARCH COVERAGE

RESEARCH COVERAGE                      DATE PUBLISHED                      ESTIMATES UPDATED
- -----------------                      --------------                      -----------------

Published Research Reports                 
Freeman Securities*                   8/17/98                               --
KDP Investment Advisors*               8/1/98                               --
SAMCO Capital Markets*                 8/1/98                               --
Bear Stearns                           9/5/96                            10/18/96
DLJ                                    8/2/96                               --
Paine Webber                          7/16/96                            11/11/97

Additional Research
Jefferies - Hold

EARNINGS ESTIMATES              NUMBER OF ESTIMATES     MEAN 1998         MEAN 1999
------------------              -------------------     ---------         ---------

IBES                                     1               ($1.25)             NA
Nelson                                   1               ($1.25)             NA

__________________________
* Fixed Income research. 

Page A-21

OVERVIEW OF STAR GAS PARTNERS, L.P.("STAR GAS")
SELECTED FINANCIAL DATA
($ IN THOUSANDS)

- ------------------------------------------------------------------------------------------------------------------------
HISTORICAL YEARS ENDED SEPTEMBER 30,
--------------------------------------------------------------------------------
1996       %        1997       %       1997(A)     %        1998       %
- ------------------------------------------------------------------------------------------------------------------------

Sales                                   $119,634   100.0%   $135,159   100.0%    $149,766   100.0%   $111,685   100.0%
% Growth                               17.0%               13.0%                25.2%              -25.4%
Cost of sales                             58,557    48.9%     72,211    53.4%      80,370    53.7%     49,498    44.3%
-----------------   -----------------    -----------------   ----------------- 
Gross profit                              61,077    51.1%     62,948    46.6%      69,396    46.3%     62,187    55.7%
Operating expenses                        41,207    34.4%     43,245    32.0%(c)   46,408    31.0%     43,281    38.8%
Net (loss) on sales of assets               (260)   -0.2%       (295)   -0.2%        (265)   -0.2%       (271)   -0.2%
Depreciation and amortization              9,808     8.2%     10,405     7.7%      11,495     7.7%     11,638    10.4%
-----------------   -----------------    -----------------   ----------------- 
Operation income                           9,802     8.2%      9,003     6.7%      11,228     7.5%      6,997     6.3%

Interest expense, net                      7,124     6.0%      6,966     5.2%       7,766     5.2%      7,927     7.1%
-----------------   -----------------    -----------------   ----------------- 
Income (loss) before income taxes          2,678     2.2%      2,037     1.5%       3,462     2.3%       (930)   -0.8%

Income taxes                                  85     0.1%         25     0.0%          25     0.0%         25     0.0%

General Partners' interest                     -     0.0%         40     0.0%          69     0.0%        (19)    0.0%
-----------------   -----------------    -----------------   ----------------- 
Net income                              $  2,593     2.2%   $  1,972     1.5%    $  3,368     2.2%   $   (936)   -0.8%
=================   =================    =================   ================= 

Net income per limited partner unit     $   0.49            $   0.37             $   0.54            $  (0.16)
========            ========             ========            =========      

Weighted average L.P. units outstanding    5,271               5,271                6,228               6,035

EBITDA (d)                              $ 19,870    16.6%   $ 19,703    14.6%    $ 22,988    15.3%   $ 18,906    16.9%

Capital expenditures                    $  5,332            $  5,279             $  5,579            $ 15,100
Maintenance capital expenditures           2,300               3,100                3,400               2,625
Distributable cash flow                   10,361               9,612               11,797               8,329
Distributable cash flow per unit        $   1.97            $   1.82             $   1.89            $   1.38
Common distribution coverage                 1.8x                1.5x                 1.4x                1.0x
Total distribution coverage                  0.9x                0.8x                 0.8x                0.6x

________________________
(a) Proforma for December 16, 1997 common unit offering and the acquisition of
Pearl Gas Co.
(b) Growth over 1996
(c) Includes $350 in special project expenses.
(d) Excludes loss from sale of assets.

Page B-1

OVERVIEW OF STAR GAS
EBITDA RECONCILIATION: 1997(a)
($ in thousands)

================================================================================
STAR GAS
--------

1997 Actual EBITDA                                                  $19,703 (b)

NORMALIZING ADJUSTMENTS. 

Weather 
Residential - 1,125 gallons @ 0.7106 margin                           799
Commercial  -   277 gallons @ 0.4459 margin                           124 

Margin
Residential - 50,832 gallons @ (0.7106 - 0.6995)                     (564)
Commercial  - 19,864 gallons @ (0.4454 - 0.4348)                     (220)
Wholesale   - 38,404 gallons @ (0.0975 - 0.0675)                   (1,152) 

Compensation                                                            (56)  

Elimination of strategic expense                                        902 (c)

Pearl Gas EBITDA                                                      3,012    

Pearl Gas acquisition adjustments                                       273 (d)
------- 

1997 Normalized EBITDA                                              $22,821 
=======
- --------------------------------------------------------------------------------

(a) Management's assumptions.
(b) Not pro forma for Pearl Gas acquisition.
(c) Certain expenses including the exploration of strategic alternatives by 
Morgan Stanley.
(d) Certain cost savings, primarily salary and benefit expenses of certain 
selling shareholders.

Page B-2

OVERVIEW OF STAR GAS
EBITDA RECONCILIATION: 1998 - 1999 (a)
($ in thousands)

====================================================================

STAR GAS
--------     

Normalized 1998 EBITDA Budget                               $ 22,135

Weather                                                       
12.8% warmer than normal                                    (3,229)
------

Actual 1998 EBITDA                                          $ 18,906   
====== 

Normalized 1998 EBITDA Budget                               $ 22,135

Acquisition Growth
1998 acquisitions                                            1,585

$5 million of acquisitions at 6.5x multiple
completed on 4/1/99 using half-year 
convention                                                  385

Actual results through January 21, 1999                       (2,986)
------

1999 EBITDA Projected                                       $ 21,119
======

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

(a) Management's assumptions.

Page B-3

OVERVIEW OF STAR GAS
EBITDA PROJECTIONS
($ IN THOUSANDS)

====================================================================================================================================
PROJECTED
-------------------------------------------------------------------------
ACTUAL           NORMALIZED           ADJUSTED FOR
1998               1998              ACTUAL 1999              2000           2001           2002
-----------------------------------------------------------------------------------------------------------

EBITDA                    $ 18,906            $ 22,135              $ 21,119             $ 25,260       $ 26,797       $ 28,335
----------------------------------------------------------------------------------------------------------------------------------

MAJOR ASSUMPTIONS FOR 1999 - 2002
---------------------------------

[_]   30 Year Weather

[_]   No growth in base business.

[_]   $5 million in 1999 and $10 million in 2000 to 2002 of acquisitions at
6.5x EBITDA multiple using half-year convention.

[_]   No increase in gross profit margin.

Page B-4

OVERVIEW OF STAR GAS
ACQUISITION HISTORY
($ in thousands)

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

DATE                                                                           EBITDA        ACQUIRED      COST PER
ACQUIRED         COMPANY                PURCHASE PRICE           EBITDA         MULTIPLE       GALLONAGE      GALLON
--------         -------                --------------           ------         --------       ---------     --------

6/15/94          Loveland                    $     700          $   127             5.5x             433       $1.616

11/24/94         Baystate                    $   1,450          $   209             6.9x             769       $1.886

9/12/95          Debolt                      $     950          $   151             6.3x             852       $1.115

3/22/96          Bob White L.P. Gas/
Mitchell Bottle Gas      $   1,500          $   263             5.7x             898       $1.671

7/22/96          Fuzzy Moore                 $     850          $   147             5.8x             454       $1.871

10/22/97         Pearl Gas Co.               $  24,126          $ 3,288             7.3x          14,000       $1.723

2/20/98          Tri-County Gas              $     550          $   108             5.1x             320       $1.720

5/28/98          Knowles LP Gas              $   3,000          $   426             7.0x           1,021       $2.939

5/28/98          Tioga Petroleum             $   1,200          $   257             4.7x             688       $1.795

7/30/98          Lowe Bros & Dad             $   3,750          $   602             6.2x           1,965       $1.908

8/11/98          Myers Propane               $   1,200          $   191             6.3x             572       $2.099
-----------       ----------       ----------      ----------   ----------

4 YEAR TOTALS                                $  39,276          $ 5,769             6.8x          21,952       $1.789
===========       ==========       ==========      ==========   ==========

Page B-5

OVERVIEW OF STAR GAS
MARGIN ANALYSIS
(VOLUME IN GALLONS, GALLONS AND $ IN THOUSANDS, EXCEPT MARGINS)

------------------------------------------------------------------------------------------------------------------------
FISCAL YEARS ENDED SEPTEMBER 30,
------------------------------------------------------------------------------------------
1993            1994             1995           1996           1997            1998
-----------     ------------     ------------    -----------   -----------     -----------

RESIDENTIAL
Volume                           44,590           48,430           45,235         54,336        49,707          53,720
Margin                        $  0.6902        $  0.6861        $  0.6677      $  0.6592     $  0.7106       $  0.6742
-----------     ------------     ------------    -----------   -----------     -----------
Gross profit                  $  30,777        $  33,228        $  30,203      $  35,818     $  35,322       $  36,219

COMMERCIAL
Volume                           17,617           19,875           18,831         21,194        19,587          18,901
Margin                        $  0.4614        $  0.4611        $  0.4271      $  0.4202     $  0.4459       $  0.4465
-----------     ------------     ------------    -----------   -----------     -----------
Gross profit                  $   8,129        $   9,164        $   8,043      $   8,906     $   8,734       $   8,440

AGRICULTURE
Volume                           23,291           16,053           15,080         12,567        17,338          18,437
Margin                        $  0.2349        $  0.2630        $  0.2357      $  0.2556     $  0.2694       $  0.2654  
-----------     ------------     ------------    -----------   -----------     -----------
Gross profit                  $   5,471        $   4,222        $   3,554      $   3,212     $   4,671       $   4,893

MOTOR FUEL & OTHER
Volume                            7,581            8,060            8,056          8,197         8,024           7,812
Margin                        $  0.4922        $  0.5359        $  0.5271      $  0.5215     $  0.5765       $  0.6390 
-----------     ------------     ------------    -----------   -----------     -----------
Gross profit                  $   3,731        $   4,319        $   4,246      $   4,275     $   4,626       $   4,992

WHOLESALE
Volume                           51,493           45,318           38,941         39,025        38,404          25,981
Margin                        $  0.0619        $  0.0680        $  0.0568      $  0.0704     $  0.0975       $  0.0639 
-----------     ------------     ------------    -----------   -----------     -----------
Gross profit                  $   3,189        $   3,082        $   2,212      $   2,747     $   3,743       $   1,661

TOTAL PROPANE
Volume                          144,572          137,736          126,143        135,319       133,060         124,851
Margin                        $  0.3548        $  0.3922        $  0.3826      $  0.4061     $  0.4291       $  0.4502
-----------     ------------     ------------    -----------   -----------     -----------
Total propane gross profit    $  51,297        $  54,015        $  48,258      $  54,958     $  57,096       $  56,205

APPLIANCES/OTHER
Revenue                       $   9,237        $   9,454        $   7,536      $   8,269     $   8,043       $   8,571
Cost                              3,232            3,187            1,935          2,150         2,191           2,589
-----------     ------------     ------------    -----------   -----------     -----------
Gross profit                  $   6,005        $   6,267        $   5,601      $   6,119     $   5,852       $   5,982

TOTAL GROSS PROFIT              $  57,302        $  60,282        $  53,859      $  61,077     $  62,948       $  62,187
===========     ============     ============    ===========   ===========     ===========

Page B-6

OVERVIEW OF STAR GAS
DISCOUNTED CASH FLOW ANALYSIS
WEIGHTED AVERAGE COST OF CAPITAL DERIVATION
($ IN MILLIONS)
- --------------------------------------------------------------------------------

TOTAL                                   IMPLIED    TOTAL     TOTAL
MARKET         UNIT          TOTAL       MARKET    DEBT/   DEBT AS %     UN-
LEVERED      VAL. DEBT      PRICE AT       UNITS      VALUE OF   TOTAL    OF TOTAL   LEVERED
COMPARABLE COMPANY                  BETA (A)     (BK = MKT)     (2/3/99)     OUT. (MIL)    EQUITY    EQUITY    CAPITAL     BETA
- ------------------------------------------------------------------------------------------------------------------------------------

AmeriGas Partners, L.P.               0.44         $719.0         $23.625       41.9      $1,009.8    71.2%      41.6%     0.257
Cornerstone Propane Partners, L.P.    0.55          263.1          17.500       19.9         355.6    74.0%      42.5%     0.316
Ferrellgas Partners, L.P.             0.47          594.3          18.688       31.3         596.8    99.6%      49.9%     0.235
Heritage Propane Partners, L.P.       0.48          198.3          23.750        8.6         207.9    95.4%      48.8%     0.246
National Propane Partners, L.P.       0.76          139.2           5.063       11.2          58.0   239.8%      70.6%     0.224
Star Gas Partners, L.P.               0.51          115.7          18.063        6.3         115.3   100.4%      50.1%     0.255
Suburban Propane Partners, L.P.       0.44          428.2          19.188       28.7         562.4    76.1%      43.2%     0.250

----------------------------------------------------
Star's capitalization - at market (b)              
Total debt                        $115.7   50.1%  
Comparable group's average unlevered beta:                           0.25         Common equity                      115.3   49.9%  
------ ------   
Star's debt - to - equity ratio (b):                                100.4%                                          $231.0  100.0%  
----------------------------------------------------
Star's debt as a percent of total capital (b):                       50.1% 
Comparable group's beta relevered for Star's capital structure:     0.409       
=====       

DERIVATION OF WEIGHTED AVERAGE COST OF CAPITAL:                                                MARKET RISK PREMIUM RANGE (D)
- -----------------------------------------------                                            ------------------------------------- 
11.3%   12.3%    13.3%
-------------------------------------
Star's theoretical levered beta:                                          0.409
Assumed % of equity in Star's capital structure (b):                       49.9%
Risk - free rate of return (c):                                             4.8%
Star's cost of equity range (at various market risk premiums):                                      9.5%    9.9%    10.3%
=====   =====    =====
Star's assumed tax rate:                                                   39.6%          
Assumed % of debt in capital structure (b):                                50.1%
Star's estimated cost of debt (e):                                          7.8%
Star's estimated after - tax cost of debt:                                  4.7%                    4.7%    4.7%     4.7%

------------------------------------- 
Star's weighted average cost of capital range (f):                                                  7.1%    7.3%     7.5%
------------------------------------- 

___________________________
(a) Source: Bloomberg, 143 week (maximum weekly time period allowed, or the
number of weeks available, which may be less than 143) adjusted beta
relative to the S&P 500 index.
(b) Market value of debt is assumed to equal book value.
(c) Ten - year Treasury rate on February 3, 1999.
(d) Ibbotson Associates 1998. Total returns for small company stocks of 17.7%
minus the risk-free rate.
(e) Based on Star current debt structure.
(f) Calculation based upon use of the Capital Asset Pricing Model (CAPM).

Page B-7

OVERVIEW OF STAR GAS
SUMMARY OF CAPITAL STRUCTURE
($ IN THOUSANDS)

===========================================================================================================
12/31/98                           2/3/99
BOOK VALUE        COUPON          MARKET PRICE          MARKET VALUE
----------        ------          ------------          -------------

DEBT:
Credit Agreement
Working Capital facility        $ 10,720            7.25%         Not applicable           $ 10,720
Acquisition facility               9,000            7.25%         Not applicable              9,000
Notes payable 
8.04% First Mortgage Notes        85,000            8.04%             NA                     85,000 
7.17% First Mortgage Notes        11,000            7.17%             NA                     11,000

TOTAL DEBT                                                                                 $115,720 
EFFECTIVE COST OF DEBT                                                                          7.8%
AFTER-TAX COST OF DEBT                                                                          4.7%

12/31/98                           2/3/99
SHARES OUT.                       MARKET PRICE          MARKET VALUE
-----------                       ------------          -------------

EQUITY:
Common units                         3,858,999                           $ 18.063               $ 69,703
Subordinated units                   2,396,078                             NA        (a)          43,279
General Partner                                                                                    2,306   (b) 

TOTAL EQUITY                                                                               $115,288
EFFECTIVE COST OF EQUITY                                                                        9.9%

TOTAL CAPITALIZATION                                                                            $231,008
WACC                                                                                            7.3%
Less: Cash                                                                                 $  5,831

NET CAPITALIZATION                                                                              $225,177

(a)  Market price assumed to equal common units.
(b)  Implied 2% general partner interest.

Page B-8

OVERVIEW OF STAR GAS

[GRAPH APPEARS HERE]

Page B - 9

OVERVIEW OF STAR GAS

[GRAPH APPEARS HERE]

Page B - 10

OVERVIEW OF STAR GAS
COMMON UNIT TRADING HISTORY - VOLUME DISTRIBUTION
1995 - 1999(a)

================================================================================================================
DEC. 15-31 1995           1996                  1997           
------------------  --------------------  --------------------  
PRICE PER UNIT         VOLUME        %       VOLUME        %       VOLUME        %   
----------------------   ------------------  --------------------  --------------------  

GREATER THAN   $24.800                       
24.400    24.600                           32,400  100.00%      
24.200    24.400                           55,300   99.34%       26,000  100.00%
24.000    24.200                           27,200   98.20%       25,800   99.24%
23.800    24.000                          436,500   97.65%       38,400   98.49%
23.600    23.800                          119,200   88.71%        3,000   97.37%
23.400    23.600                           79,500   86.27%       56,900   97.28%
23.200    23.400                          105,000   84.64%      194,500   95.62%
23.000    23.200                          396,900   82.49%      148,000   89.94%
22.800    23.000                          229,200   74.36%      102,100   85.62%
22.600    22.800                           96,100   69.67%      184,500   82.64%
22.400    22.600                          273,800   67.70%      145,500   77.26%
22.200    22.400     33,400  100.00%      430,500   62.09%      128,000   73.01%
22.000    22.200    762,000   95.80%      510,900   53.28%      217,500   69.27%
21.800    22.000                          400,400   42.82%      411,600   62.92%
PRE-ANNOUNCEMENT PRICE         21.600    21.800                          422,600   34.62%      302,200   50.91%
21.400    21.600                          259,400   25.96%      290,200   42.09%
21.200    21.400                          214,300   20.65%      372,800   33.62%
21.000    21.200                          388,000   16.25%      499,100   22.74%
20.800    21.000                          110,900    8.32%      108,000    8.17%
20.600    20.800                          137,500    6.05%       34,300    5.01%
20.400    20.600                           41,900    3.23%       16,000    4.01%
20.200    20.400                           62,800    2.38%       46,500    3.55%
20.000    20.200                           53,200    1.09%       22,000    2.19%
19.800    20.000                                                 24,400    1.55%
19.600    19.800                                                 28,600    0.83%
19.400    19.600
19.200    19.400
19.000    19.200
18.800    19.000
18.600    18.800
18.400    18.600
18.200    18.400
MARKET PRICE                   18.000    18.200
17.800    18.000
17.600    17.800
17.400    17.600
17.200    17.400
17.000    17.200
16.800    17.000
16.600    16.800
16.400    16.600
16.200    16.400
16.000    16.200
15.800    16.000
15.600    15.800
15.400    15.600
15.200    15.400
15.000    15.200
14.800    15.000
14.600    14.800
14.400    14.600
LESS THAN      $14.400 
--------            ----------            ----------
Total Units for Period                 795,400             4,883,500             3,425,900
Cumulative % of Total Traded                      6.24%                38.33%                26.89%
% Traded of Current Units Out. (b)               20.61%               126.55%                88.78%
Wtd. Average Unit Price               $  22.11            $    22.25            $    21.89

=====================================================================================================================
1998                 1999(A)               1995-1999(A) 
--------------------   -------------------   ----------------------
PRICE PER UNIT           VOLUME        %      VOLUME         %         VOLUME         %
----------------------   --------------------   -------------------   ----------------------

GREATER THAN   $24.800                                    
24.400    24.600                                                     32,400   100.00%
24.200    24.400       75,500  100.00%                              156,800    99.75%
24.000    24.200         -      97.92%                               53,000    98.51%
23.800    24.000         -      97.92%                              474,900    98.10%
23.600    23.800      131,200   97.92%                              253,400    94.37%
23.400    23.600       85,600   94.31%                              222,000    92.38%
23.200    23.400      173,700   91.95%                              473,200    90.64%
23.000    23.200       51,400   87.18%                              596,300    86.93%
22.800    23.000       36,200   85.77%                              367,500    82.25%
22.600    22.800       42,700   84.77%                              323,300    79.36%
22.400    22.600      192,300   83.69%                              611,600    76.82%
22.200    22.400      710,900   78.31%                            1,302,800    72.02%
22.000    22.200      256,500   58.75%                            1,746,900    61.80%
21.800    22.000      395,800   51.70%                            1,207,800    48.09%
PRE-ANNOUNCEMENT PRICE         21.600    21.800      243,600   40.81%                              968,400    38.61%
21.400    21.600      184,500   34.11%                              734,100    31.00%
21.200    21.400      115,000   29.04%                              702,100    25.34%
21.000    21.200      178,000   25.87%                            1,065,100    19.73%
20.800    21.000       77,300   20.98%                              296,200    11.37%
20.600    20.800       69,100   18.85%                              240,900     9.05%
20.400    20.600       37,500   16.95%                               95,400     7.16%
20.200    20.400       44,000   15.92%                              153,300     6.41%
20.000    20.200       14,300   14.71%                               89,500     5.20%
19.800    20.000       21,500   14.31%                               45,900     4.50%
19.600    19.800       14,900   13.72%       3,500   100.00%         43,500     4.14%
19.400    19.600         -      13.31%      54,800    98.93%           -        3.80%
19.200    19.400       16,400   13.31%      14,500    82.13%         16,400     3.80%
19.000    19.200       12,900   12.85%      28,100    77.68%         12,900     3.67%
18.800    19.000       25,200   12.51%      66,400    71.52%         25,200     3.57%
18.600    18.800       33,200   11.81%      43,300    51.16%         33,200     3.37%
18.400    18.600        9,200   10.90%      25,300    37.89%          9,200     3.11%
18.200    18.400       16,900   10.65%        -       30.13%         16,900     3.04%
MARKET PRICE                   18.000    18.200       40,900   10.18%       4,800    30.13%         40,900     2.91% 
17.800    18.000       11,900    9.06%        -       28.66%         11,900     2.58%
17.600    17.800       10,100    8.73%        -       28.66%         10,100     2.49%
17.400    17.600       28,100    8.45%        -       28.66%         28,100     2.41%
17.200    17.400       13,500    7.68%      24,000    28.66%         13,500     2.19%
17.000    17.200       14,700    7.31%        -       21.31%         14,700     2.09%
16.800    17.000         -       6.90%        -       21.31%           -        1.97%
16.600    16.800       12,400    6.90%        -       21.31%         12,400     1.97%
16.400    16.600         -       6.56%      18,800    21.31%           -        1.87% 
16.200    16.400         -       6.56%        -       15.54%           -        1.87% 
16.000    16.200         -       6.56%        -       15.54%           -        1.87% 
15.800    16.000       27,500    6.56%        -       15.54%         27,500     1.87% 
15.600    15.800       37,400    5.81%        -       15.54%         37,400     1.66% 
15.400    15.600       53,800    4.78%        -       15.54%         53,800     1.36% 
15.200    15.400         -       3.30%        -       15.54%           -        0.94% 
15.000    15.200         -       3.30%        -       15.54%           -        0.94% 
14.800    15.000       41,000    3.30%        -       15.54%         41,000     0.94% 
14.600    14.800         -       2.17%        -       15.54%           -        0.62%
14.400    14.600       78,900    2.17%      50,708    15.54%         78,900     0.62%
LESS THAN      $14.400                                 
----------             --------              -----------
Total Units for Period                 3,635,500              326,200               12,740,300
Cumulative % of Total Traded                       28.54%                 2.56%                  100.00%
% Traded of Current Units Out. (b)                 94.21%                 8.45%                  330.15%
Wtd. Average Unit Price               $    21.39             $  18.03              $     21.90

____________________________

(a) Through February 3, 1999.
(b) Based on 3,858,999 common units outstanding.   

Page B-11

OVERVIEW OF STAR GAS
SHAREHOLDER ANALYSIS (a)

- -------------------------------------------------------------------
COMMON                 
INSTITUTIONS (B)                          UNITS HELD     % OF TOTAL   
- -------------------                       ----------     ----------             

Bear, Stearns & Co.                           52,900        1.4%   
Graver Bokhof                                 27,150        0.7%   
DLJ Corp.                                     24,950        0.6%   
Paine Webber Group                            14,670        0.4%   
Advest Group, Inc.                            12,015        0.3%   
The Vanguard Group                             9,800        0.3%   
CIBC Oppenheimer                               3,500        0.1%   
Weiss Peck & Greer                               900        0.0%   
Legg Mason Wood Walker                           500        0.0%   
U.S. Trust Co. NY                                500        0.0%   
Cullen/Frost Bankers                             300        0.0%   
----------     ----------   
ALL INSTITUTIONS                             147,185        3.8%   

- ----------------------------------------------------------------------------------------------------------------------------------- 
COMMON                    SUBORDINATED         
DIRECTORS AND OFFICERS               TITLE                               UNITS HELD    % OF TOTAL     UNITS HELD       % OF TOTAL
- ----------------------               --------------------------------    ----------    ----------    ------------      ----------

Wolfgang Traber                      Star Director and Petro Director        10,400          0.3%               -          0.0%
Richard F. Ambury                    V.P. of Finance                            525          0.0%               -          0.0%
----------    ----------    ------------      ---------- 
TOTAL DIRECTORS & OFFICERS HOLDINGS                                          10,925          0.3%               -          0.0%  

COMMON                    SUBORDINATED               
GENERAL PARTNER                                                          UNITS HELD    % OF TOTAL     UNITS HELD       % OF TOTAL
- ---------------------------                                              ----------    ----------    ------------      ----------
Petro                                                                        60,727          1.6%       2,396,078        100.0%    

- ------------------------------------------------------------------------------------------------------------------------------------
SUMMARY                                                               
- -------                                                               
COMMON                    SUBORDINATED               
INSIDER HOLDINGS                                                           UNITS       % OF TOTAL       UNITS          % OF TOTAL
----------    ----------    ------------      ---------- 
Directors and Officers as a Group                                          10,925          0.3%               -          0.0%  
General Partner                                                            60,727          1.6%       2,396,078        100.0% 
----------    ----------    ------------      ---------- 
71,652          1.9%       2,396,078        100.0% 

PUBLIC HOLDINGS                                                          
INSTITUTIONAL                                                             144,035          3.7%                                
RETAIL                                                                  3,643,312 (c)     94.4%                                
----------    ----------               
3,787,347         98.1%                               

TOTAL UNITS OUTSTANDING                                                   3,858,999        100.0%       2,396,078        100.0% 
- --------------------------------------------------------------------------------------------------------------------------------- 

_____________________
(a) Based on units outstanding and most recently available data as of 2/04/99.
(b) Source: Bloomberg.

Page B-12

STAR GAS HAS ONGOING RESEARCH COVERAGE BY TWO FIRMS.

OVERVIEW OF STAR GAS
RESEARCH COVERAGE

RESEARCH COVERAGE                DATE PUBLISHED                          ESTIMATES UPDATED
-----------------                --------------                          -----------------

Published Research Reports           
A.G. Edwards - Buy               1/5/98                                    2/5/99
PaineWebber - Buy              12/30/97                                    1/6/99 
Lehman                           2/7/96                                   11/4/96

EARNINGS ESTIMATES               NUMBER OF ESTIMATES      MEAN 1998      MEAN 1999
------------------               -------------------      ---------      ---------

IBES                                     2                    NA           $0.48
Nelson                                   2                 ($0.14)         $0.65
Zacks                                    2                 ($0.19)         $0.48

Page B-13

SUMMARY OF THE TRANSACTION
PRO FORMA STAR GAS UNITS OUTSTANDING
(IN THOUSANDS EXCEPT PER SHARE AND PER UNIT)

[_]  There are currently 6,383 Star Gas units outstanding comprised of 
3,859 common units, 2,396 subordinated units and 128 implied general 
partner ("GP") units. The subordinated units and GP units are 
currently assets of Petro.

[_]  There are currently 26,463 shares of Petro common stock outstanding
held by public shareholders and "affiliates." The public holds 14,327
Class A shares, 11 Class B shares and 291 Class C shares. The
"affiliates" hold 11,834 shares which include 9,528 Class A shares and
2,306 Class C shares.

[_]  Each shareholder of Petro will receive a certain number of units in
Star Gas such that the implied consideration paid for each Petro share
averages $1.91 based on A.G. Edwards' estimates of the value of the
units being offered to Petro as consideration.

[_]  All of the publicly held 14,327 Class A shares and 291 Class C shares,
and a portion of the "affiliate" held Class A shares (5,243) and Class
C shares (1,328) will receive .11758 units of newly created senior
subordinated units for each share (1,719 units to the public and 773
units to the "affiliates", 2,492 units in total) with an attached
Contingent Unit ("CU"). See the following page for a discussion of the
Contingent Units. A.G. Edwards estimates an implied value for these
units of $16.22/unit (see page D-3). The remaining "affiliates" of
Petro not receiving senior subordinated units, who hold a total of
5,262 shares, will receive .14318 units for a total of 753 junior
subordinated and GP units, both of which will also include attached
CUs. A.G. Edwards estimates an implied value for these units
$13.55/unit (see page D-6).

[_]  The 2,396 subordinated units and 128 GP units currently owned by Petro
will effectively be retired in the Transaction.

Page C-1

SUMMARY OF THE TRANSACTION
PRO FORMA STAR GAS UNITS OUTSTANDING
(IN THOUSANDS)
(continued)

Description of Contingent Units

[_]  During the five year period, beginning with the first full four
quarters following the Merger, the senior subordinated units, junior
subordinated units and general partner interests will have the right
to receive up to 909,000 senior subordinated units upon Petro meeting
a "Contingent Unit Test." Each time the Contingent Unit Test is met
(but not more frequently than once every four quarter period), the
senior subordinated units, junior subordinated units and general
partner interests will receive an aggregate of 303,000 senior
subordinated units, subject to a maximum of 909,000 senior
subordinated units. The Contingent Unit Test will be met during any
four quarter period when distributable cash flow per unit attributable
to Petro exceeds $2.90.

Page C-2

SUMMARY OF THE TRANSACTION 
ALLOCATION OF CURRENT PETRO SHARES OUTSTANDING
(IN THOUSANDS)

==========================================================================
Class A   Class C      Total
-------   --------    ------- 

Groups Receiving Senior Sub
---------------------------
Public                                        14,327      291       14,618
Affiliates                                     5,243    1,328        6,572
------    -----       ------
Total Receiving Senior Sub                    19,570    1,619       21,190

Groups Receiving Junior Sub and GP
----------------------------------
Affiliates                                     4,284      978        5,262 
------    -----       ------

Sub Total                                     23,855    2,598       26,452
======    =====

Class B                                                                 11
------ 

Total Shares including Class B                                      26,463
======

Page C-3

SUMMARY OF THE TRANSACTION
PRO FORMA STAR GAS UNITS OUTSTANDING
PRE-FINANCING ASSUMPTIONS
(IN THOUSANDS)

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

Issued to Petro
----------------------
Type of Units                 Current      Public    Affiliates     Retired     Pro Forma
--------------------------   ---------    --------  ------------   ---------   ----------- 

Common                          3,859           -             -           -         3,859

Senior Subordinated                 -       1,719           773           -         2,492

Subordinated                    2,396           -             -      (2,396)            -

Junior Subordinated
& New General Partner          -           -           753           -           753

Old General Partner               128           -             -        (128)            - 
---------                                         ----------- 

6,383                                               7,104

Page C-4

SUMMARY OF THE TRANSACTION
EQUITY PURCHASE PRICE CALCULATION
IMPLIED EQUITY VALUE OF PETRO'S ASSETS
($ AND UNITS IN THOUSANDS, EXCEPT PER UNIT AMOUNTS)

-----------------------------------------------------------------------------------------------------------
Value of Securities
Event                                                                    Issued to and Retired from Petro
-------------------------------------------------------------     -----------------------------------------

Issuance of Senior Subordinated                              
Units to Public Petro Shareholders                                        1,719       x        $16.22
----------------------------------
$27,879

Issuance of Senior Subordinated                              
Units to Affiliate Petro Shareholders                                       773       x        $16.22  
----------------------------------
$12,540   

Issuance of Junior Subordinated                                         
& General Partner Units to Affiliate Petro Shareholders                     753       x        $13.35      
----------------------------------
$10,059

-----------
PURCHASE PRICE OF PETRO'S EQUITY                                                   $50,478

-----------------------------------------------------------------------------------------------------------
Dividend by 26,452 shares of Petro's Common stock =                                        $1.91 per share
(Excludes 11 Class B Shares)
-----------------------------------------------------------------------------------------------------------

Retire Subordinated Units held by Petro                                  (2,396)      x        $13.35
----------------------------------
($31,988) 

Retire Old General Partner Units held by Petro                             (128)      x        $19.08 (a)
----------------------------------
($2,435)

-----------
EQUITY VALUE OF PETRO'S HEATING OIL ASSETS                                         $16,054

_______________________________
(a) Star 20-day average common unit price through 2/3/99.

Page C-5

SUMMARY OF THE TRANSACTION
PRO FORMA CAPITAL STRUCTURE
12/31/98
($ IN THOUSANDS)

----------------------------------------------
PRO FORMA
STAR GAS    PETRO     ADJUSTMENTS   STAR GAS
--------   -------    -----------  --------- 

DEBT:
8.04% First Mortgage Notes       $ 85,000         -            -     $ 85,000
7.25% WC Revolver                  10,720         -            -       10,720
7.25% Acquisition Facility          9,000         -            -        9,000
7.17% First Mortgage Notes         11,000         -            -       11,000

10.90% Senior Notes                     -  $ 60,000            -       60,000
14.10% Senior Notes                     -     3,100            -        3,100
14.10% Subordinated Notes               -     3,100            -        3,100
10.13% Sub Notes & Sr Notes             -    50,000    ($ 50,000)           -
9.38% Sub Notes & Sr Notes              -    75,000      (75,000)           -
12.25% Sub Notes & Sr Notes             -    81,250      (81,250)           -
8.00% Existing Acq Notes Payable        -    14,301            -       14,301
7.5% New Debt                           -         -       90,000       90,000

--------  --------    -----------  ---------
TOTAL DEBT                         $115,720  $286,751    ($116,250)    $286,221

WEIGHTED AVERAGE COST OF DEBT                                               8.5%

PREFERRED STOCK:
14.33% Preferred Stock           $      0  $  4,167    ($  4,167)    $      0
12.88% Preferred Stock                  -    30,000      (30,000)           -
--------   -------    -----------  ---------
-   $34,167     ($34,167)           -

ESTIMATED EQUITY VALUE:

PRO FORMA   ESTIMATED             ESTIMATED 
UNITS OUT   UNIT PRICE          MARKET VALUE
---------   ----------          ------------

Common                              12,873 (a)   $18.06 (b)          $232,510
Senior Subordinated                  2,492        16.22                40,412
Junior Subordinated and GP             753        13.35                10,059
-------                          --------- 
16,118                           $282,981

TOTAL CAPITALIZATION:                                                $569,202
Less: Cash and Cash Collateral                                       19,635
--------- 
NET CAPITALIZATION                                                   $549,567 

(a) Comprised of 3,859 currently outstanding units, 8,911 units to be issued in
a common unit offering to close concurrent with the Merger, and 103 units
issued as a consent fee in the Refinancing Transaction.
(b) Current price of Star Gas (2/3/99): $18.063

Page C-6

DISCOUNTED CASH FLOW ANALYSIS  
STAR GAS- PRO FROMA
PRO FORMA WEIGHTED AVERAGE COST OF CAPITAL DERIVATION
($ IN MILLIONS)
- --------------------------------------------------------------------------------

TOTAL                                   IMPLIED    TOTAL     TOTAL
MARKET         UNIT          TOTAL       MARKET    DEBT/   DEBT AS %     UN-
LEVERED      VAL. DEBT      PRICE AT       UNITS      VALUE OF   TOTAL    OF TOTAL   LEVERED
COMPARABLE COMPANY                  BETA (A)     (BK = MKT)     (2/3/99)     OUT. (MIL)    EQUITY    EQUITY    CAPITAL     BETA
- ------------------------------------------------------------------------------------------------------------------------------------

AmeriGas Partners, L.P.               0.44         $719.0         $23.625       41.9      $1,009.8    71.2%      41.6%     0.257
Cornerstone Propane Partners, L.P.    0.55          263.1          17.500       19.9         355.6    74.0%      42.5%     0.316
Ferrellgas Partners, L.P.             0.47          594.3          18.688       31.3         596.8    99.6%      49.9%     0.235
Heritage Propane Partners, L.P.       0.48          198.3          23.750        8.6         207.9    95.4%      48.8%     0.246
National Propane Partners, L.P.       0.76          139.2           5.063       11.2          58.0   239.8%      70.6%     0.224
Star Gas Partners, L.P.               0.51          115.7          18.063        6.3         115.3   100.4%      50.1%     0.255
Suburban Propane Partners, L.P.       0.44          428.2          19.188       28.7         562.4    76.1%      43.2%     0.250

----------------------------------------------------
Pro forma capitalization - at market (b) 
Comparable group's average unlevered beta:                           0.25         Total debt                        $286.2   50.3%  
Pro forma debt - to - equity ratio (b):                             101.1%        Total equity                       283.0   49.7%  
------ ------   
Pro forma debt as a percent of total capital (b):                    50.3%                                          $569.2  100.0%  
----------------------------------------------------
Comparable group's beta relevered for Pro forma capital structure:  0.410
=====       

DERIVATION OF WEIGHTED AVERAGE COST OF CAPITAL:                                                MARKET RISK PREMIUM RANGE (D)
- -----------------------------------------------                                            ------------------------------------- 
11.3%   12.3%    13.3%
------------------------------------- 
Pro forma theoretical levered beta:                                        0.410
Assumed % of common equity in Pro forma capital structure (b):              49.7%
Risk - free rate of return (c):                                              4.8%
Pro forma cost of common range (at various market risk premiums):                                   9.5%    9.9%    10.3%
=====   =====    =====
Pro forma assumed tax rate:                                                 39.6%          
Assumed % of debt in capital structure (b):                                 50.3%
Pro forma estimated cost of debt (e):                                        8.5%
Pro forma estimated after - tax cost of debt:                                5.1%                   5.1%    5.1%     5.1%

------------------------------------- 
Pro forma weighted average cost of capital range (f):                                               7.3%    7.5%     7.7%
------------------------------------- 

___________________________
(a) Source: Bloomberg, 143 week (maximum weekly time period allowed, or the
number of weeks available, which may be less than 143) adjusted beta
relative to the S&P 500 index.
(b) Market value of debt is assumed to equal book value. See page C-6 for 
equity calculation.
(c) Ten - year Treasury rate on February 3, 1999.
(d) Ibbotson Associates 1998. Total returns the small company stocks of 17.7%
minus the risk-free rate.
(e) Based on Pro forma debt structure.
(f) Calculation based upon use of the Capital Asset Pricing Model (CAPM).

Page C-7

IMPLIED UNIT VALUE ANALYSIS
COMMON UNITS

[_]  A.G. Edwards calculated a range of values for the Senior Subordinated,
Junior Subordinated and General Partner units, based on a required rate of
return, trading yield, and discount to the common units.

1999   2000   2001   2002   THEREAFTER 
----   ----   ----   ----   ---------- 

COMMON UNIT                                                              

Indicated Distribution         $ 1.15  $2.30  $2.30  $2.30       $2.30  
Cost of Equity (a)                9.5%   9.5%   9.5%   9.5%        9.5%
------
NPV of future distributions    $24.31                                  
------

1999   2000   2001   2002   THEREAFTER 
----   ----   ----   ----   ---------- 
COMMON UNIT                                                              

Indicated Distribution         $ 1.15  $2.30  $2.30  $2.30       $2.30  
Cost of Equity (a)                9.9%   9.9%   9.9%   9.9%        9.9%
------
NPV of future distributions    $23.30                                  
------

1999   2000   2001   2002   THEREAFTER 
----   ----   ----   ----   ---------- 
COMMON UNIT                                                              

Indicated Distribution         $ 1.15  $2.30  $2.30  $2.30       $2.30  
Cost of Equity (a)               10.3%  10.3%  10.3%  10.3%       10.3%
------
NPV of future distributions    $22.38                                  
------

-----------------------------------------------------------------    ------------------------------------
AVERAGE PRICE OVER LAST 20 TRADING DAYS ENDED 2/3/99:     $19.08     CURRENT PRICE (2/3/99):     $18.06  
AVERAGE YIELD (B):                                          12.1%    CURRENT YIELD (B):            12.7% 
-----------------------------------------------------------------    ------------------------------------ 

(a)  Per Cost of Capital analysis on page D-2. 
(b)  Assumes a $2.30 distribution.             

[_]  Certain analysis included in this presentation, including the calculations
of the implied value of the senior subordinated, junior subordinated and GP
units, require an estimate of the future price of the common units at
Closing. To serve as a proxy for this future price, A.G. Edwards used the
average common unit closing price for the last 20 trading days ended
February 3, 1999. Such price is 14.7% to 21.5% lower than the common units'
implied unit value per the above analysis, and 5.6% greater than the common
units' most recent closing price on February 3, 1999.

Page D-1

IMPLIED UNIT VALUE ANALYSIS  
THEORETICAL PRO FORMA COST OF EQUITY FOR COMMON UNITS
($ IN MILLIONS)

====================================================================================================================================

TOTAL                                   IMPLIED    TOTAL     TOTAL
MARKET         UNIT          TOTAL       MARKET    DEBT/   DEBT AS %     UN-
LEVERED      VAL. DEBT      PRICE AT       UNITS      VALUE OF   TOTAL    OF TOTAL   LEVERED
COMPARABLE COMPANY                  BETA (A)     (BK = MKT)     (2/3/99)     OUT. (MIL)    EQUITY    EQUITY    CAPITAL     BETA
- ------------------------------------------------------------------------------------------------------------------------------------

AmeriGas Partners, L.P.               0.44         $719.0         $23.625       41.9      $1,009.8    71.2%      41.6%     0.257
Cornerstone Propane Partners, L.P.    0.55          263.1          17.500       19.9         355.6    74.0%      42.5%     0.316
Ferrellgas Partners, L.P.             0.47          594.3          18.688       31.3         596.8    99.6%      49.9%     0.235
Heritage Propane Partners, L.P.       0.48          198.3          23.750        8.6         207.9    95.4%      48.8%     0.246
National Propane Partners, L.P.       0.76          139.2           5.063       11.2          58.0   239.8%      70.6%     0.224
Star Gas Partners, L.P.               0.51          115.7          18.063        6.3         115.3   100.4%      50.1%     0.255
Suburban Propane Partners, L.P.       0.44          428.2          19.188       28.7         562.4    76.1%      43.2%     0.250

----------------------------------------------------
Pro forma capitalization - at market (b) 
Comparable group's average unlevered beta:                           0.25         Total debt                        $286.2   50.3%  
Pro forma debt - to - equity ratio (b):                             100.1%        Total equity                       283.0   49.7%  
------ ------   
Pro forma debt as a percent of total capital (b):                    50.3%                                          $569.2  100.0%  
----------------------------------------------------
Comparable group's beta relevered for Pro forma capital structure:  0.410       
=====       

DERIVATION OF WEIGHTED AVERAGE COST OF CAPITAL:                                                MARKET RISK PREMIUM RANGE (D)
- -----------------------------------------------                                            ------------------------------------- 
11.3%   12.3%    13.3%
------------------------------------- 
Pro forma theoretical levered beta:                                        0.410                   
Assumed % of equity in Pro forma capital structure (b):                     49.7%
Risk - free rate of return (c):                                              4.8%
Pro forma cost of common range (at various market risk premiums):                                   9.5%    9.9%    10.3%
=====   =====    =====
Pro forma assumed tax rate:                                                 39.6%          
Assumed % of debt in capital structure (b):                                 50.3%
Pro forma estimated cost of debt (e):                                        8.5%
Pro forma estimated after - tax cost of debt:                                5.1%                   5.1%    5.1%     5.1%

------------------------------------- 
Pro forma weighted average cost of capital range (f):                                               7.3%    7.5%     7.7%
------------------------------------- 

___________________________
(a) Source: Bloomberg, 143 week (maximum weekly time period allowed, or the
number of weeks available, which may be less than 143) adjusted beta
relative to the S&P 500 index.
(b) Market value of debt is assumed to equal book value. See page C-6 for 
equity calculation.
(c) Ten - year Treasury rate on February 3, 1999.
(d) Ibbotson Associates 1998. Total returns for the small company stocks of
17.7% minus the risk-free rate.
(e) Based on Pro forma debt structure.
(f) Calculation based upon use of the Capital Asset Pricing Model (CAPM).

Page D-2

IMPLIED UNIT VALUE ANALYSIS
SENIOR SUBORDINATED UNITS
REQUIRED RATE OF RETURN

- -------------------------------------------------------------------------------------------------------------------------
1999      2000      2001       2002     Thereafter(a)  
--------  --------  --------   --------   -------------  

SENIOR SUBORDINATED UNIT (WITHOUT CU)                                                                              
Indicated Distribution                                   $  0.00   $  2.30   $  2.30    $  2.30      $  2.30       
Cost of Equity                                              20.0%     20.0%     20.0%      20.0%         9.9%     
--------                                                 
NPV of future distributions                              $ 16.72                                                  
--------                                                 
CONTINGENT UNIT                                                                                                      
Indicated Distribution (b)                              $     0   $     0   $     0    $     0      $     0       
Cost of Equity                                             20.0%     20.0%     20.0%      20.0%         9.9%     
--------                                                  
NPV of future distributions                              $     0                                                  
--------                                                  

- --------------------------------------------------------------------
UNIT VALUE OF SENIOR SUBORDINATED UNIT WITH ATTACHED CU     $ 16.72 
(Each Unit has claim to 1/3,245 of the Contingent Unit.)
- --------------------------------------------------------------------

1999      2000      2001       2002     Thereafter(a)  
--------  --------  --------   --------   -------------   
SENIOR SUBORDINATED UNIT (WITHOUT CU)
Indicated Distribution                                  $  0.00   $  2.30   $  2.30    $  2.30      $  2.30       
Cost of Equity                                             30.0%     30.0%     30.0%      30.0%         9.9% 
--------                                                  
NPV of future distributions                             $ 12.96
--------                                                  

CONTINGENT UNIT
Indicated Distribution (b)                              $     0   $     0   $     0    $     0      $     0       
Cost of Equity                                             30.0%     30.0%     30.0%      30.0%         9.9%  
-------- 
NPV of future distributions                             $     0  
-------- 

- --------------------------------------------------------------------
UNIT VALUE OF SENIOR SUBORDINATED UNIT WITH ATTACHED CU     $ 12.96
(Each Unit has claim to 1/3,245 of the Contingent Unit.)
- --------------------------------------------------------------------

(a)  Distributions made after 2002 are discounted at the cost of equity for the 
Common Units, estimated at 9.9% due to the end of the Subordination Period.

(b)  Assumes that the Contingent Units Test is not met.

Page D-3

IMPLIED UNIT VALUE ANALYSIS
THEORETICAL PRO FORMA COST OF EQUITY FOR SENIOR SUBORDINATED UNITS
($ IN MILLIONS)

==============================================================================================================================
Total                           Implied     Total     Total                
Market       Unit      Total      Market     Debt/    Debt as %     Un-     
Levered   Val. Debt   Price at    Units     Value of    Total    of Total    levered   
Comparable Company                      Beta (a)  (Bk = Mkt)  (2/3/99)  Out. (Mil)   Equity     Equity    Capital      Beta    
- -----------------------------------------------------------------------------------------------------------------------------

AmeriGas Partners, L.P.                   0.44      $719.0    $23.625      41.9     $1,009.8    71.2%      41.6%      0.257     
Cornerstone Propane Partners, L.P.        0.55       263.1     17.500      19.9        355.6    74.0%      42.5%      0.316
Ferrellgas Partners, L.P.                 0.47       594.3     18.688      31.3        596.8    99.6%      49.9%      0.235
Heritage Propane Properties, L.P.         0.48       198.3     23.750       8.6        207.9    95.4%      48.8%      0.246
National Propane Partners, L.P.           0.76       139.2      5.063      11.2         58.0   239.8%      70.6%      0.224
Star Gas Partners, L.P.                   0.51       115.7     18.063       6.3        115.3   100.4%      50.1%      0.255
Suburban Propane Partners, L.P.           0.44       428.2     19.188      28.7        562.4    76.1%      43.2%      0.250

-----------------------------------------------------------
Pro forma capitalization - at market(b)     
Comparable group's average unlevered beta                      0.25        Total debt                             $518.7    91.1% 
Pro forma adjusted debt-to-subordinated equity ratio(b)     1027.8%        Total equity                             50.5     8.9%
------   ------
Pro forma adjusted debt as a percent of total capital(b):     91.1%                                               $569.2   100.0%
----------------------------------------------------------
Comparable group's beta relevered for Pro forma capital                   
structure(b):                                               1,835       
====== 

DERIVATION OF WEIGHTED AVERAGE COST OF CAPITAL:                                      Market Risk Premium Range(d)
- -----------------------------------------------                                    -------------------------------
11.3%    12.3%     13.3%
-------------------------------
Pro forma theoretical levered beta:                                    1.835    
Assumed % of subordinated equity in Pro forma capital structure(b):     8.9%     
Risk-free rate of return(c):                                            4.8%
Pro forma cost of equity range (at various market risk premiums):                      25.6%    27.4%     29.2%
=====    =====     =====
-------------------------------

__________________________
(a)  Source: Bloomberg. 143 week (maximum weekly time period allowed, or the
number of weeks available, which may be less than 143) adjusted beta
relative to the S&P 500 index.

(b)  Market value of debt is assumed to equal book value; for purposes of this
calculation only, debt includes the market value of pro forma common units;
equity includes only the value of senior subordinated, junior subordinated
units, and GP units.

(c)  Ten-year Treasury rate on February 3, 1999.

(d)  Ibbotson Associates 1998. Total returns for small company stocks of 17.7% 
minus the risk-free rate.

Page D-4

IMPLIED UNIT VALUE ANALYSIS
JUNIOR SUBORDINATED AND GP UNITS

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

Range
------------

Required rate of return (a)        35.0%-45.0%         $ 9.19-11.50
Trading yield (b)                  15.0%-17.0%         $13.53-15.33
Discount to common units (c)       25.0%-35.0%         $12.40-14.31

Range               $ 9.19-15.33
Adjusted Range (d)  $12.40-14.31

------------
Assumed value  (e)  $   13.35
------------

(a) Represents required rate of return during subordination period, which
is assumed to continue through the end of fiscal 2002. Thereafter, the 
rate of return is assumed to equal that of the common units, for a
blended required rate of return of 18.4% to 22.6%. Cost per unit
calculations provided on page D-7.

(b) Based on a $2.30 annualized MQD.

(c) Based on a discount to the common unit's average closing price for the 
last 20 trading days as of 2/3/99 of $19.08, as referenced on page D-1.

(d) Represents the middle values of both the range of highs and lows.

(e) Implied required rate of return, trading yield and discount to common 
at a unit price of $13.35 are 28.8% during subordination (16.0%
blended), 17.2%, and 30.0%, respectively.

Page D-5

IMPLIED UNIT VALUE ANALYSIS
JUNIOR SUBORDINATED AND GP UNITS
Required Rate of Return

========================================================================================================================

1999      2000      2001      2002      Thereafter (a)
----      ----      ----      ----      -------------- 

JUNIOR SUBORDINATED AND GP UNITS                 

Indicated Distribution                                         $ 0.00    $2.30     $2.30     $2.30       $2.30
Cost of Equity                                                   35.0%    35.0%     35.0%     35.0%        9.9%      
------ 
NPV of future distributions                                    $11.50  
------ 

CONTINGENT UNIT                             

Indicated Distribution (b)                                      $    0    $   0     $   0     $    0      $   0  
Cost of Equity (c)                                                25.0%    25.0%     25.0%      25.0%       9.9%  
------ 
NPV of future distributions                                     $    0 
------  

------------------------------------------------------------------------
UNIT VALUE OF JUNIOR SUBORDINATED AND GP UNIT WITH ATTACHED CU    $11.50
(Each Unit has claim to 1/3,245 of the Contingent Unit.)
------------------------------------------------------------------------

1999      2000      2001      2002      Thereafter (a)
----      ----      ----      ----      --------------    
JUNIOR SUBORDINATED AND GP UNITS

Indicated Distribution                                          $ 0.00    $2.30     $2.30     $2.30      $2.30  
Cost of Equity                                                    45.0%    45.0%     45.0%     45.0%       9.9%   
----- 
NPV of future distributions                                     $ 9.19
-----

CONTINGENT UNIT

Indicated Distribution (b)                                      $    0    $   0     $   0     $   0      $   0
Cost of Equity (c)                                                25.0%    25.0%     25.0%     25.0%       9.9%   
-----   
NPV of future distributions                                     $    0
-----

------------------------------------------------------------------------
UNIT VALUE OF JUNIOR SUBORDINATED AND GP UNIT WITH ATTACHED CU    $ 9.19   
(Each Unit has claim to 1/3,245 of the Contingent Unit.)
------------------------------------------------------------------------ 

(a) Distributions made after 2002 are discounted at the cost of equity for
the Common Units, estimated at 9.9% due to the end of the
Subordination Period.
(b) Assumes that the Contingent Units Test is not met.   
(c) Utilized senior subordinated discount rate as CUs convert to senior 
subordinated units. 

Page D-6

IMPLIED UNIT VALUE ANALYSIS
THEORETICAL PRO FORMA COST OF EQUITY FOR JUNIOR SUBORDINATED AND GP UNITS
($ IN MILLIONS)

==============================================================================================================================
Total                           Implied     Total     Total                
Market       Unit      Total      Market     Debt/    Debt as %     Un-     
Levered   Val. Debt   Price at    Units     Value of    Total    of Total    levered   
Comparable Company                      Beta (a)  (Bk = Mkt)  (2/3/99)  Out. (Mil)   Equity     Equity    Capital      Beta    
- -----------------------------------------------------------------------------------------------------------------------------

AmeriGas Partners, L.P.                   0.44      $719.0    $23.625      41.9     $1,009.8    71.2%      41.6%      0.257     
Cornerstone Propane Partners, L.P.        0.55       263.1     17.500      19.9        355.6    74.0%      42.5%      0.316
Ferrellgas Partners, L.P.                 0.47       594.3     18.688      31.3        596.8    99.6%      49.9%      0.235
Heritage Propane Properties, L.P.         0.48       198.3     23.750       8.6        207.9    95.4%      48.8%      0.246
National Propane Partners, L.P.           0.76       139.2      5.063      11.2         58.0   239.8%      70.6%      0.224
Star Gas Partners, L.P.                   0.51       115.7     18.063       6.3        115.3   100.4%      50.1%      0.255
Suburban Propane Partners, L.P.           0.44       428.2     19.188      28.7        562.4    76.1%      43.2%      0.250

-----------------------------------------------------------
Pro forma capitalization - at market(b)     
Comparable group's average unlevered beta:                      0.25       Total debt                             $559.1    98.2% 
Pro forma adjusted debt-to-junior subordinated equity                      Total equity                             10.1     1.8%
ratio(b):                                                  5558.7%                                              ------   ------
Pro forma adjusted debt as a percent of total capital(b):      98.2%                                              $569.2   100.0%
----------------------------------------------------------
Comparable group's beta relevered for Pro forma capital             
structure:                                                  8.803
====== 

DERIVATION OF WEIGHTED AVERAGE COST OF CAPITAL:                                      Market Risk Premium Range(d)
- -----------------------------------------------                                    -------------------------------
11.3%    12.3%     13.3%
-------------------------------
Pro forma theoretical levered beta:                                   8.803    
Assumed % of junior subordinated equity in Pro forma capital 
structure(b):                                                         1.8%      
Risk-free rate of return(c):                                            4.8%
Pro forma cost of equity range (at various market risk premiums):                     104.3%   113.1%    121.9%
======   ======    ======
-------------------------------

__________________________
(a)  Source: Bloomberg. 143 week (maximum weekly time period allowed, or the
number of weeks available, which may be less than 143) adjusted beta
relative to the S&P 500 index.

(b)  Market value of debt is assumed to equal book value; for purposes of this
calculation only, debt includes the market value of common and senior
subordinated units; equity only includes the value of junior subordinated,
and GP units.

(c)  Ten-year Treasury rate on February 3, 1999.

(d)  Ibbotson Associates 1998. Total returns for small company stocks of 17.7% 
minus the risk-free rate.

Page D-7

PRO FORMA MERGER ANALYSIS

[_]  A.G. Edwards analyzed the impact of the Transaction on the Partnership's
distributable cash flow per unit, the related accretion, common unit
coverage and total unit coverage on a pro forma basis.

----------------------------------------------------------------
STAR GAS     STAR GAS
STAND-ALONE   PRO FORMA
------------  ----------

DCF PER UNIT                        
1998 Actual                           $ 1.30      $ 1.44
1999 Adjusted for Actual (a)            1.51        2.07
2000 Projected                          2.02        2.39

ACCRETION/DILUTION                  
1998 Actual                                       $ 0.13
1999 Adjusted for Actual (a)                        0.56
2000 Projected                                      0.37

COMMON UNIT COVERAGE                
1998 Actual                             0.98x       0.78x
1999 Adjusted for Actual (a)            1.13        1.12
2000 Projected                          1.49        1.29

TOTAL UNIT COVERAGE                 
1998 Actual                             0.59x       0.62x
1999 Adjusted for Actual (a)            0.68        0.90
2000 Projected                          0.92        1.04

----------------------------------------------------------------
(a) Adjusted to include actual results through January 21, 1999.

Page E-1

MERGER PREMIUMS TO MARKET VALUE ANALYSIS

[_]      A.G. Edwards analyzed the premium of the consideration to be received
by Petro Common Shareholders and compared the premium to Petro's
current and historical prices. These premiums were compared to
premiums paid in acquisitions of majority or remaining interests
announced and completed between January 1, 1996 and February 3, 1999
where the target's share price one week prior to the announcement date
was either (i) equal to or less than $5, (ii) greater than $5 and less
than $10, or (iii) equal to or greater than $10.

[_]      Premiums were calculated one day, one week, four weeks, three months
and one year prior to the announcement of the agreement in principle
for each merger.

================================================================================================================================
COMPARISON OF PREMIUMS PAID
--------------------------------------------------------------------------------------------------------------------------------
PETRO AT        MEAN OF TRANSACTIONS  MEAN OF TRANSACTIONS
$1.91 PER UNIT        EQUAL TO OR          GREATER THAN $5
PREMIUM TO STOCK PRICE PRIOR TO ANNOUNCEMENT ON AUGUST 14TH:          OFFER PRICE        LESS THAN $5         AND LESS THAN $10  
------------------------------------------------------------------------------------------------------------------------------

One day prior:                                                   1.9%                57.8%                34.3%       

One week prior:                                                  9.1%                68.5%                43.2%       

Four weeks prior:                                               -7.4%                71.1%                50.1%       

Three months prior:                                             19.8%                71.8%                63.6%       

One year prior:                                                -36.3%                51.9%                51.3%       

-------------------------------------------------------------------------------
Maximum                19.8%                71.8%                63.6%       
Minimum               -36.3%                51.9%                34.3%       
===============================================================================

===================================================================================
COMPARISON OF PREMIUMS PAID
-----------------------------------------------------------------------------------
MEAN OF TRANSACTIONS
EQUAL TO OR
PREMIUM TO STOCK PRICE PRIOR TO ANNOUNCEMENT ON AUGUST 14TH:     GREATER THAN $10
---------------------------------------------------------------------------------

One day prior:                                              28.4% 

One week prior:                                             32.9%

Four weeks prior:                                           39.4%

Three months prior:                                         54.7%

One year prior:                                             72.1%

----------------------------------
Maximum            72.1%
Minimum            28.4%
==================================

[_]      The premium to Petro's current stock price ($1.00 as of February 3, 
1999) was 91.0%

Page  F-1

MERGER PREMIUMS TO MARKET VALUE ANALYSIS
MERGERS WITH TARGET PRICE EQUAL TO OR LESS THAN $5 PER SHARE
ANNOUNCED AND COMPLETED 1/1/96 - 2/3/99

================================================================================

Date      Date                                  
Announced Effective  Target Name                     Target Business Description      Acquirer Name
_____________________________________________________________________________________________________________________________

01/10/96  06/26/96   American Resource Corp          Gold mining company              REA Gold Corp
01/18/96  08/23/96   AMSERV Healthcare Inc           Pvd temp nursing employment      Star Multi Care Services Inc
01/23/96  05/09/96   Portage Industries Corp         Mnfr extruded plastic sheets     Spartech Corp
02/05/96  09/30/96   Customedix Corp                 Mnfr dental, medical products    CUS Acquisition Inc
02/13/96  07/12/96   Medical Innovations Inc         Pvd home health care services    Horizon/CMS Healthcare Corp
02/15/96  04/29/96   LDI Corp                        Computer equip leasing svcs      NationsBank Corp, Charlotte, NC    
02/28/96  07/11/96   Salton/Maxim Houswares Inc      Mnfr electric housewares, fares  Windmere Corp 
03/13/96  09/27/96   DeSolo Inc                      Mnfr paints and detergents       Keystone Consolidated Inds Inc
04/16/96  05/31/96   CIS Technologies Inc            Manufacture computers            National Data Corp
04/22/96  06/04/96   Cornerstone Natural Gas Co      Natural gas distribution svcs    El Paso Field Svcs (El Paso)
05/03/96  03/17/98   Homeowners Group Inc            Real estate insurance agency     Cross Country Group Inc
05/06/96  09/03/96   Transcisco Industries Inc       Mnfr service railroad equip      Trinity Industries Inc
05/07/96  09/03/96   NMR of America Inc              Pvd medical equip leasing svcs   Medical Resources Inc    
05/13/96  08/30/96   MDT Corp                        Mnfr sterility assurance equip   Getinge Industries AB    
05/15/96  09/10/96   Carlisle Plastics Inc           Mnfr whl plastic prods, resins   Tyco International Ltd
06/03/96  01/09/97   Bio-Dental Technologies Corp    Provide dental research svcs     Zila Inc
06/10/96  07/22/96   SysteMed Inc                    Pvd medical services             Merck-Medco Managed Care Inc
06/11/96  09/03/96   Computer Identics Corp          Manufacture bar code scanners    Robotic Vision Systems Inc
06/17/96  10/07/96   Scanforms Inc                   Mnfr business forms              Big Flower Press Holdings Inc
06/21/96  08/23/96   Computer Petroleum Corp         Information retrieval svcs       United Communications Group    
06/24/96  12/05/96   MEM Co Inc                      Manufacture toiletries           Renaissance Cosmetics Inc
07/31/96  11/13/96   Calgene Inc                     Own and operate greenhouse       Monsarto Co
08/13/96  02/27/97   LaTex Resources Inc             Oil and gas expl prodn           Alliance Resources PLC
09/10/96  01/03/97   GreenStone Industries Inc       Manufacture stationery           Louisiana-Pacific Corp
09/11/96  03/04/97   Cherrpower Inc                  Insulation, asbestos abatement   American Eco Corp
09/16/96  12/06/97   Proler International Corp       Whl scrap metals & metals        Schnitzer Steel Industries Inc
09/26/96  01/24/97   General Physics Corp            Provide training services        National Patent Development
10/02/96  12/27/96   Software Publishing Corp        Develop software                 Allegro New Media
10/03/96  11/12/97   Pittencrieff Communications     Pvd radio telephorne commun svcs Nextel Communications Inc 
10/04/96  12/31/96   Pet Food Warehouse Inc          Own, op pet food stores          Petco Animal Supplies Inc
10/30/96  12/20/96   Pacific Rehab & Sports Med      Own, op rehab hospital           Horizon/CMS Healthcare Corp
11/05/96  03/14/97   Panatech Research & Development Manufacture semiconductors       Harbour Group Ltd
11/25/96  02/28/97   American Studios Inc            Pvd photography services         PCA International Inc
12/06/96  03/18/97   MaxServ Inc (Sears Roebuck)     Pvd technical info support svc   Sears Roebuck & Co
12/09/96  02/28/97   Houston Biotechnology Inc       Mnfr monoclonal antibodies       Medarex Inc
12/18/96  09/29/97   Aircoa Hotel Partners LP        Real estate agency               Regal Hotel Management Inc
01/24/97  07/02/97   INCSTAR Corp (Sonin Biomedical) Mnfr diagnostic substances       American Standard Inc
01/28/97  05/21/97   Calgene Inc (Monsarto Co)       Own and operate greenhouse       Monsarto Co
01/30/97  08/12/97   AST Research Inc                Mnfr computers, dvlp software    Samsung Electronics Co Ltd
02/07/97  08/01/97   MS Financial (MS Diversified)   Pvd financial credit services    Search Financial Services Inc
02/11/97  07/31/97   Serv-Tech Inc                   Maintenance and cleaning svcs    Philip Environmental Inc
03/04/97  06/27/97   Audio King Corp                 Own, op consumer eledn stores    Ultimate Electronics Inc
04/15/97  06/30/97   Kurzweil Applied Intelligence   Electronic computing equip       Lernout & Hauspie Speech
04/30/97  07/25/97   Arden Industrial Products Inc   Whl fasteners                    Park-Ohio Industries Inc

Premium
------------------------------------------------------------
Value of  Enterprise    1 Day        1 Week      4 Week      3 Months    1 Year
Date      Acquirer                         Transaction       Value    Prior to    Prior to    Prior to    Prior to  
Announced Business Description                 ($ mil)     ($ mil)   Annc. Date  Annc. Date  Annc. Date  Annc. Date  Annc. Date
- --------------------------------------------------------------------------------------------------------------------------------

01/10/96  Gold mining company                     77.5      76.353        30.77       23.50       27.03                             
01/18/96  Pvd home health care services            9.2       7.895        14.56       27.29       20.59     -4.67     20.42  
01/23/96  Manufacture plastic products            15.8      17.540        46.67       78.98       78.98    134.67    193.33  
02/05/96  Investment company                       3.6      15.103        22.58       26.67        5.56     19.00    -18.98  
02/13/96  Pvd nursing care services               30.3      41.725        13.85       18.40        5.71      5.71     37.67  
02/15/96  Bank hldg corpvd finl svcs              28.1     288.893        31.20       21.48       49.09     26.15      5.81 
02/28/96  Mnfr personal care appliances           21.1      53.442        -0.19       12.84        3.81      1.65     -9.05  
03/13/96  Manufacture steel wire                  36.1      40.529        65.41       53.00       80.00    118.57     53.00  
04/16/96  Pvd info, transaction svcs              99.3     112.471        50.50       30.16       30.16     -5.57     33.78  
04/22/96  Own, op oil and gas pipelines           96.6      97.614        28.00       29.73      100.00    134.15    182.35  
05/03/96  Pvd homeowner memberships svcs          11.4      14.968        22.07       26.77       93.88    135.43     17.71  
05/06/96  Mnfr transp equip, parts                44.7      51.126        15.56       36.84       28.40     57.58    271.43  
05/07/96  Own, op diagnostic imaging ctrs         40.4      57.369        41.43       86.79       90.39     98.08     37.56  
05/13/96  Mnfr sterilizing equipment              70.3      69.457        12.82       22.22        4.76     15.79     -6.38  
05/15/96  Mnfr fire protection systems           122.4     273.282        38.20       38.20       41.83     73.94     31.51  
06/03/96  Mnfr, whl pharmaceuticals               40.3      48.477        64.99       43.28      109.42    194.49     65.09  
06/10/96  Health insurance company                64.8      60.646        -4.00        4.35        9.09    -23.81    -56.36  
06/11/96  Mnfr 2-D, 3-D vision-based sys          42.0      40.881        63.11       54.53       54.53     72.71     19.84  
06/17/96  Pvd advertising, marketing svcs         27.5      15.661        61.40       61.40       58.62     70.37    130.00  
06/21/96  Publish newsletters                     12.0      11.548        28.33       46.67       71.11    105.33    208.00  
06/24/96  Investor group                          38.2      29.577        13.21       81.82       90.48     93.55    114.29  
07/31/96  Mnfr agro cherris, manmade fibers       50.0     584.080        64.10       80.28       39.13     31.96     14.29 
08/13/96  Oilo and gas exploration, prodn         27.1      44.759       181.14      202.77      181.14    228.00    107.16 
09/10/96  Mnfr lumber plywood, pulp               29.2      40.823        33.33       52.73       58.49     42.37     50.00 
09/11/96  Pvd engineering services                50.0      36.189        48.06       48.06       45.88     50.30     65.33 
09/16/96  Manufacture steel products              42.5      68.146       132.26      125.00      148.28     33.33      9.09 
09/26/96  Mnfr contact lenses                     26.1      70.360        16.57       31.61       36.00     23.64     45.71 
10/02/96  Pvd software services                   25.2       8.786        14.86       10.90       60.80    -88.09           
10/03/96  Pvd cellular telephone svcs            116.3     159.860         8.95       14.40       30.74    -13.08     29.14 
10/04/96  Own and operate pet stores              60.7      55.986        22.93       26.00       48.24     48.24     57.50 
10/30/96  Pvd nursing care services               72.7      75.706        67.74       62.50       48.57     60.00      6.12 
11/05/96  Mnfr steel cutting tools                29.2      26.218        55.56       55.56       51.35                     
11/25/96  Pvd photo processing services           66.3      67.650        50.48      110.53      166.67    -65.28    -73.33 
12/06/96  Department stores finl svcs             46.0      87.263        19.23       67.57       55.00     67.57    129.63 
12/09/96  Manufacture pharmaceuticals              8.6       8.700        52.00       62.13       52.00    -93.01    -92.05 
12/18/96  Own, op hotels                           5.9     166.329      1233.33     1233.33     1233.33   1354.55   1042.86 
01/24/97  Transportation, building prod          106.3     102.865        42.93       53.21       68.53                     
01/28/97  Mnfr agro cherris, manmade fibers      242.6     567.548        62.03       60.00       60.00     60.00     42.22 
01/30/97  Mnfr consumer electronics              495.8     558.108        16.76        8.00       20.00     23.43    -31.43 
02/07/97  Pvd business credit services            17.2     102.602        20.00       46.67       10.00      1.54    -70.67 
02/11/97  Provide waste management svcs           73.4      54.956        32.00       60.00       88.57    129.57     12.34 
03/04/97  Own, op radio, TV, eledn stores          6.0      12.363        60.00       68.00       68.00     68.00    -18.05 
04/15/97  Mnfr speech tech products               51.3      50.582        83.83       69.69       66.49     84.00     63.65 
04/30/97  Mnfr forged and mechined parts          42.0      44.995        41.18       50.00       37.14     20.00     26.32   

MERGER PREMIUMS TO MARKET VALUE ANALYSIS

MERGERS WITH TARGET PRICE EQUAL TO OR LESS THAN $5 PER SHARE

ANNOUNCED AND COMPLETED 1/1/96 - 2/3/99

(CONTINUED)

================================================================================

DATE            DATE                                                                                           
ANNOUNCED     EFFECTIVE       TARGET NAME                           TARGET BUSINESS DESCRIPTION      ACQUIROR NAME
- ------------------------------------------------------------------------------------------------------------------------------------

05/01/97      08/01/97        Cryenco Sciences Inc                  Mnfr liquid gas storage tanks    Chart Industries Inc  
05/08/97      09/10/97        Imex Medical Systems Inc              Mnfr fetal diagnostic instr      Nicolet Biomedical Inc
06/16/97      09/30/97        Frederick's of Hollywood, Inc.        Women's clothing stores          Investor Group
06/24/97      07/25/97        Jillians Entertainment Corp           Own, op billiards clubs          JW Childs Equity Partners LP
07/22/97      12/16/97        Box Worldwide Inc                     Pvd interactive TV svcs          TCI Music (Tele-Communications)
07/23/97      12/02/97        Rudy's Restaurant Group               Own and operate restaurants      Berahana Inc
08/01/97      09/26/97        Community Care of America Inc         Own, op nursing homes            Integrated Health Services Inc
08/07/97      12/02/97        Magnetic Technologies Corp            Manufacture copiers printers     SPS Technologies Inc
08/14/97      12/31/97        Allied Capital Advisers Inc           Investment advisory svcs         Allied Capital Lending Corp
09/02/97      12/03/97        Ground Round Restaurants              Own and operate restaurants      CRR Holdings LLC
09/04/97      12/30/97        Cinergi Pictures Entertainment        Pvd motion picture prodn svcs    Investor Group
09/26/97      09/26/97        Laclede Steel Co                      Own, operate steel works         Birmingham Steel Corp
10/10/97      01/07/98        Puro Water Group Inc                  Whl bottled water                United States Filter Corp
10/13/97      03/19/98        Integrated Brands Inc                 Produce ice cream                Yogan Fruz World-Wide Inc
11/03/97      02/25/98        Individual Inc                        Pvd on-line info retrieval svc   Desktop Data Inc
11/04/97      01/12/98        Computer Vision Corp                  Mnfr computers, peripherals      Parametric Technology Corp
11/12/97      03/03/98        PureTec Corp                          Manufacture plastic products     Teloni-Plex Inc
11/24/97      01/07/98        General Host Corp                     Own, op specialty retail stores  Cypress Group LLC
12/02/97      03/17/98        Staodyn Inc                           Mnfr electromedical equipment    Rehabilicare Inc
12/12/97      02/13/98        Impact Systems Inc                    Paper prodn control systems      Voith Sulzer Paper Technology
12/12/97      09/10/98        Timber Lodge Steakhouse Inc           Own, op restaurants              Santa Barbara Restaurant Group
12/15/97      02/24/98        MetroGolf Inc                         Own, op golf centers             Family Golf Centers Inc
12/22/97      05/20/98        Artistic Greetings Inc                Mnfr personalized stationery     MDC Communications Corp
12/23/97      03/20/98        American Paging Inc                   Pvd wireless messaging svcs      Telephone and Data Systems Inc
12/23/97      01/27/98        Hi-Lo Automotive Inc                  Own, op auto parts stores        O'Reilly Automotive Inc
01/13/98      07/31/98        Bird Corp                             Manufacture building products    CertainTeed Corp
01/16/98      02/26/98        Opthalmic Imaging Systems Inc         Mnfr, design, market imaging sys Premier Laser Systems
01/26/98      05/06/98        TransAmerican Waste Industries        Pvd waste management services    USA Waste Services Inc
02/09/98      06/18/98        American Waste Services               Provide waste management svcs    USA Waste Services Inc
02/19/98      10/15/98        Casino Magic Corp                     Own, operate casinos             Hollywood Park Inc
02/23/98      06/26/98        CorrpScript Inc                       Pvd pharmaceutical mgnt svcs     Omnicare Inc
03/02/98      04/30/98        First Alert Inc                       Mnfr fire and burglar alarms     Sunbeam Corp
03/31/98      06/29/98        IBAH Inc                              Mnfr pharmaceutical products     Omnicare Inc
04/09/98      07/29/98        Spec's Music Inc                      Record and video retail stores   Camelot Music Holdings
04/10/98      06/26/98        Dataflex Corp                         Whl microcomputer equipment      CompuCom SystemsInc(Safeguard)
04/22/98      06/29/98        Accel Graphics Inc                    Mnfr graphics accelerators       Evans & Sutherland Computer
04/23/98      07/31/98        Morrison Restaurants Inc              Own, operate eating places       Piccadilly Cafeterias Inc
05/05/98      09/25/98        Allied Digital Technologies Co        Mnfr multi media software prod   Investor Group
05/07/98      07/31/98        Innovative Tech Systems Inc           Dvlp facilities mgnt software    Peregine Systems Inc
05/11/98      07/14/98        Micronics Computers Inc               Mnfr system boards               Diamond Multimedia Systems Inc
05/12/98      08/24/98        Virus Research Institute Inc          Mnfr biological products         T Cell Sciences Inc
05/19/98      11/16/98        GTI Corp (Telemetrix PLC)             Mnfr electronic components       Technitrol Inc
05/20/98      09/15/98        InnoServ Technologies                 Pvd med equip repair svcs        GE Medical Systems
05/22/98      07/22/98        Pete's Brewing Co                     Produce beer                     Carrbrinus Co
05/29/98      08/17/98        Arch Petroluem Inc                    Oil, gas mining                  Pogo Producing Co
06/02/98      10/08/98        RF Power Products                     Mnfr, whl RF power delivery sys  Advanced Energy Industries

VALUE OF   ENTERPRISE                            PREMIUM
-----------------------------------------------------------
DATE           ACQUIROR                        TRANSACTION        VALUE       1 DAY PRIOR          1 WEEK PRIOR        4 WEEKS PRIOR
ANNOUNCE       BUSINESS DESCRIPTION                ($ MIL)       ($MIL)     TO ANNC. DATE         TO ANNC. DATE       TO ANNC. DATE
- ------------------------------------------------------------------------------------------------------------------------------------

05/01/97       Mnfr process control instmnts          19.2       27.904             69.23                 76.00               72.55
05/08/97       Investment company                      9.3       10.238              7.90                  2.76                2.76
06/16/97       Investor group                         69.4       57.007             48.85                 44.47               25.95
06/24/97       Investment company                      4.7        7.007             14.29                 77.78               45.46
07/22/97       Pvd communications services            36.1       36.101             20.00                 54.84              152.63
07/23/97       Own and operate restaurants            18.8       18.936             50.94                 70.21               72.04
08/01/97       Pvd specialty healthcare svcs          94.0       89.996             23.08                 18.52               88.24
08/07/97       Mnfr industrial fasteners              16.8       15.984             25.00                 25.00               33.33
08/14/97       Closed-end mgnt investment co          49.5       44.111             10.41                  4.68               10.41
09/02/97       Investment company                     17.5       56.945             10.00                 10.00               -5.71
09/04/97       Investor group                         16.3       59.794             26.90                 24.75               56.60
09/26/97       Manufacture steel, steel prod          15.0      131.767            106.45                106.45              106.45
10/10/97       Mnfr water treatment equip             25.7       30.186             33.95                 47.69               44.00
10/13/97       Produce frozen yogurt                  46.8       51.274             69.94                106.35              167.50
11/03/97       Pvd info retrieval svcs                86.8       79.390              0.92                 14.93               -7.02
11/04/97       Develop, wholesale software           250.3      460.128             28.31                 69.92               18.63
11/12/97       Mnfr plastic                          324.6      281.484             28.74                 34.94               31.77
11/24/97       Investment bank                       326.2      278.128             60.00                 62.96               79.59
12/02/97       Mnfr electromedical equip              22.5       22.867             47.38                 47.38               89.49
12/12/97       Provide paper tech dvlp svcs           28.6       28.467             57.14                 49.15               44.26
12/12/97       Own, op fast food restaurant           30.4       30.925             74.13                 74.13               81.19
12/15/97       Own and operate golf courses            6.6       18.428             20.00                 20.00              -11.11
12/22/97       Provide marketing services             33.6       35.618             28.45                 47.10               52.00
12/23/97       Pvd telecommunications svcs             9.1      217.941             17.65                 33.33               29.03
12/23/97       Own, op auto supply stores             42.5       89.680            -14.07                 12.26               24.29
01/13/98       Mnfr asbestos, fiberglass prods        39.2       27.821             25.71                 18.92               29.41
01/16/98       Mnfr, whl laser sys, alarms             1.3        7.006             16.67                 27.27               40.00
01/26/98       Pvd waste disposal services           142.3      156.717             51.42                 36.57               78.59
02/09/98       Pvd waste disposal services           122.1      106.919            100.00                156.00              166.67
02/19/98       Own, op garning company               344.8      308.423             34.52                 32.07               32.07
02/23/98       Whl, retail pharmaceuticals            68.4       68.415             26.56                 67.24               52.70
03/02/98       Mnfr, whl household appliances        129.2      171.213             68.00                 90.91              110.00
03/31/98       Whl, retail pharmaceuticals           154.3      153.807             12.20                 61.40               58.62
04/09/98       Own, op chain record stores            26.8       25.276             30.37                 65.00               65.00
04/10/98       Manufacture computer equipment         25.2       46.850              8.43                  9.33               23.77
04/22/98       Mnfr computer graphics system          55.9       41.933             13.58                 22.67               21.05
04/23/98       Own and operate cafeterias             46.2        5.412             45.46                 73.91               81.82
05/05/98       Investor group                         69.2      110.009             14.29                 14.29               37.93
05/07/98       Dulp service desk software             75.7       72.285              8.04                 10.88               25.78
05/11/98       Manufacture multimedia systems         31.7       12.967             37.54                 15.29               50.77
05/12/98       Mnfr vaccines, related products        62.6       60.225             91.64                 75.67               81.72
05/19/98       Mnfr electronic components             33.7       36.727              1.22                 34.05               -2.75
05/20/98       Mnfr diagnostic imaging equip          13.1       11.596             30.77                 32.04               42.66
05/22/98       Produce, wholesale beer                69.4       51.299              6.25                 39.73               41.67
05/29/98       Oil and gas exploration, prodn        114.0      100.081              0.13                  5.47               -3.53
06/02/98       Mnfr power delivery systems            60.8      173.871            251.61                354.17              431.71

DATE              3 MONTHS PRIOR              1 YEAR PRIOR 
ANNOUNCE          TO ANNC. DATE              TO ANNC. DATE
- ----------------------------------------------------------------------------

05/01/97                   41.94                     -26.67
05/08/97                  -30.32                     -32.50
06/16/97                   93.75                      85.07
06/24/97                  220.00                     166.67
07/22/97                  231.03                      41.18
07/23/97                   60.00                       5.26
08/01/97 
08/07/97                   42.85                      33.33
08/14/97                    8.97                     -28.00
09/02/97                   14.78                     -34.00
09/04/97                  236.00                      26.00
09/26/97                  113.33                      88.24
10/10/97                   44.00
10/13/97                  501.33                     381.07
11/03/97                   47.71                      -6.00
11/04/97                   14.33                     -55.09
11/12/97                  143.48                      69.70
11/24/97                   51.72                      77.69
12/02/97                  100.45                     152.95
12/12/97                   69.23                     109.52
12/12/97                   94.32                     139.43
12/15/97                  -25.00                     -75.51
12/22/97                   47.10                      21.60
12/23/97                   17.65                     -47.37
12/23/97                   17.97                      74.00
01/13/98                   37.50                      -8.33
01/16/98                   75.00                     -63.16
01/26/98                   55.02                      70.15
02/09/98                  -79.08                     -56.76
02/19/98                   72.95                     -19.29
02/23/98                   80.10                     -57.69
03/02/98  
03/31/98                   53.33                      -9.80
04/09/98                  340.00                     230.00
04/10/98                   21.48                      49.09
04/22/98                   62.83                     -38.67
04/23/98                   77.78                       8.11
05/05/98                   86.05                     158.06
05/07/98                   62.15                     301.52
05/11/98                   30.67                     -16.60
05/12/98                   46.44                       9.83
05/19/98                  -34.74                     -53.21
05/20/98                   21.43                     130.51
05/22/98                   45.83                       6.33
05/29/98                    4.00                     -17.67
06/02/98 

Page F - 3

MERGER PREMIUMS TO MARKET VALUE ANALYSIS
MERGERS WITH TARGET PRICE EQUAL TO OR LESS THAN $5 PER SHARE
ANNOUNCED AND COMPLETED 1/1/96 - 2/3/99
(continued)

===================================================================================================================================
Date            Date                                                                                            
Announced     Effective     Target Name                          Target Business Description        Acquiror Name                  
- -----------------------------------------------------------------------------------------------------------------------------------

07/06/98      12/23/98      Peoples Telephone Co Inc             Own op public pay telephones       Davel Communications Group Inc
07/07/98      09/21/98      Republic Engineered Steels           Mnfr cold-finished steel prods     Investor Group
07/09/98      10/09/98      American Materials & Techs           Mnfr advanced composities           Cytec Industries
07/14/98      12/08/98      Consep Inc                           Manufacture pesticides             Verdant Brands Inc
07/14/98      09/18/98      DEP Corp                             Manufacture personal care prod     Henkel KGaA
07/20/98      10/01/98      US SerVis Inc                        Dvp, design, whl software          HBO & Co
07/23/98      10/08/98      Innova Corp                          Mnfr millimeter wave radios        Digital Microwave Corp
07/29/98      09/11/98      E-Z Serve Group                      Whl and retail gasoline            EBC Texas Acquisition Corp
08/19/98      12/16/98      Peerless Group Inc                   Develop computer software          Jack Henry & Associates Inc
08/26/98      01/12/99      Lion Brewery Inc                     Produce beer                       Malt Acquiring Inc
09/21/98      10/30/98      Gamma Biologicals Inc                Mnfr blood transfusion prod        Immucor Inc       
09/23/98      11/13/98      Golden Eagle Group Inc               Pvd transp logistics svcs          USFreightways Corp
09/23/98      12/17/98      J&L Speciality Steel Inc             Mnfr steel, steel products         Usinor SA
10/07/98      12/31/98      Red Brick Systems Inc                Develop software                   Informix Corp                  
10/12/98      12/11/98      Consilium Inc                        Develop software                   Applied Materials Inc
10/13/98      12/31/98      DataWorks Corp                       Dvlp computer integrated sys       Platinum Software Corp
10/22/98      12/08/98      Lab Specialists of America Inc       Provide laboratory testing svc     Kroll-O'Gara Co
11/02/98      12/30/98      Intl Manufacturing Svcs Inc          Pvd electn manufacturing svcs      Celestica Inc(Onex Corp)   
11/12/98      01/18/99      Hills Stores Co                      Own, op dept stores, shoe stores   Ames Department Stores Inc 
12/03/98      01/22/99      Microdyne Corp                       Mnfr, whl telemetry products       L-3 Communications Holdings
12/29/98      12/29/98      Crowley Milner & Co                  Own, op department stores          Value City Department Stores

Value of  Enterprise                     Premium
-----------------------------------------------
Date        Acquiror                         Transaction       Value     1 Day Prior    1 Week Prior   4 Weeks Prior 
Announced   Business Description                 ($mil)      ($mil)     to Annc. Date   to Annc. Date   to Annc. Date
- ----------------------------------------------------------------------------------------------------------------------

07/06/98    Pvd pay telephone common svcs         114.5      209.603          87.52            80.31          118.05
07/07/98    Investor group                        417.8      409.392          56.76            68.12           45.00
07/09/98    Manufacture chemicals                  34.8       35.050         100.00           100.00           81.13
07/14/98    Mnfr, wholesale fertilizers            12.4       18.480          -7.20            10.84            5.01
07/14/98    Mnfr, whl chemicals, detergents        89.7       90.606          31.25            95.35           78.72
07/20/98    Dvlp healthcare software               60.7       42.528         151.62            85.98          151.62
07/23/98    Mnfr telecommunications prod          115.7      116.449          16.17            36.50           30.00
07/29/98    Investment firm                        43.2      107.882          37.14            20.00           20.00
08/19/98    Develop computer software              37.0       35.447          50.97            59.14           47.20
08/26/98    Investor group                         18.3       14.413          13.94            27.46           21.29
09/21/98    Mnfr blood reagent products            25.6       25.310          87.83           127.37           23.43 
09/23/98    Provide trucking services              30.2       35.062         223.64           184.80          223.64
09/23/98    Manufacture, wholesale steel          115.0      526.238         100.00           112.50           37.84
10/07/98    Dvlp management software               33.6       26.470          15.82            22.64           12.69
10/12/98    Mnfr wafer fabrication systems         45.2       41.319         145.71           145.71          145.71
10/13/98    Develop modular software               96.5       74.994          23.72            54.20           23.72
10/22/98    Pvd security prod svcs                 38.5       35.716          57.65            90.37           57.65
11/02/98    Mnfr memory prod power sys            173.2      163.891          42.93           172.56           83.13
11/12/98    Operate department stores              23.1      644.965          14.29             9.09          -11.11
12/03/98    Mnfr communications sys                90.0       73.077          15.94            60.00           44.14
12/29/98    Own, op variety stores                  0.3       78.243         390.48           296.15          194.29

-----------------------------------------------------------
Mean:           57.8%            68.5%           71.1%
===========================================================

------------------------------
Date          3 Months Prior   1 Year Prior
Announced     to Annc. Date    to Annc. Date 
- --------------------------------------------

07/06/98             -72.74          -57.77 
07/07/98              87.10          427.27        
07/09/98             104.26           35.21 
07/14/98             -20.00          -56.52 
07/14/98              75,00          236.00 
07/20/98             289.09          256.67 
07/23/98             -59.82                 
07/29/98              20.00          -20.00 
08/19/98              41.88           13.23 
08/26/98              19.37           48.91 
09/21/98                                    
09/23/98             137.33          109.41
09/23/98               9.76          -48.70 
10/07/98             -39.48          -64.61 
10/12/98              76.41           -4.44 
10/13/98             -48.35          -64.77 
10/22/98              48.47           24.64 
11/02/98              43.02          -32.60 
11/12/98             -53.85          -59.32 
12/03/98              66.67          -27.27 
12/29/98             243.47           49.33 

--------------------------- 
71.8%           51.9%
=========================== 

- --------------------------------------------------------------------------------
Source: Securities Data Company, Inc; Three-month and one-year premiums 
calculated using security prices from FactSet Research Systems, Inc. Commercial 
banks and other similar financial institutions were excluded for the purpose of 
this analysis.

Page F-4

MERGER PREMIUMS TO MARKET VALUE ANALYSIS
MERGERS WITH TARGET PRICE BETWEEN $5 AND $10 PER SHARE

Announced and Completed 1/1/96 - 2/3/99

====================================================================================================================================

Date              Date                                                                               Acquiror
Announced       Effective      Target Name                         Target Business Description       Business  Description
- ------------------------------------------------------------------------------------------------------------------------------------

01/03/96         08/28/96      International Jensen Inc             Mnfr radios and televisions      Recoton Corp    
01/08/96         05/31/96      Medalist Industries Inc              Mnfr screws, bolts               Illinois Tool Works Inc 
01/11/96         07/30/96      Golf Enterprises Inc                 Own, op golf course, club, shop  National Golf Properties Inc
01/16/96         02/26/96      KBL Healthcare Acq Corp              Healthcare venture capital co    Multicare Cos Inc 
01/16/96         04/10/96      Orthopedic Technology Inc            Manufacture surgical supplies    Deputy Inc (Corange Ltd)
01/24/96         03/29/96      TGV Software Inc                     Develop software                 Cisco Systems Inc
01/29/96         04/08/96      Varitronic Systems Inc               Mnfr typewriters                 WH Brady Co
02/08/96         07/31/96      Citizens Security Group Inc          Insurance holding company        Meridian Insurance Group
03/04/96         06/27/96      Storage Properties Inc               Own and operate warehouses       Public Storage Inc
03/13/96         04/18/96      CAPCO Automotive Products Corp       Mnfr automobile parts            Eaton Corp
04/03/96         06/17/96      E&B Maine Inc                        Ret, whl marine accessories      West Marine Inc    
04/15/96         11/22/96      Multi-Market Radio Inc               Own, op radio broadcasting stns  SFX Broadcasting Inc
04/22/96         07/18/96      Duplex Products Inc                  Manufacture business forms       Reynolds & Reynolds Co
04/22/96         08/07/96      Ideon Group Inc                      Operate ret mail order house     CUC International Inc
04/25/96         10/01/96      Sterling Chemicals Inc               Mnfr commodity chemicals         Investor Group
04/29/96         09/09/96      Crocker Realty Trust Inc             REIT                             Highwoods Properties Inc 
05/16/96         08/20/96      Professional Sports Care Mngmt.      Own, op physical therapy clinic  HealthSouth Corp 
05/20/96         08/29/96      Financing for Science Intl Inc       Pvd business credit services     Finova Group Inc
05/22/96         08/02/96      Network Express Inc                  Mnfr telecommunication equip     Cabletron Systems Inc 
05/24/96         09/04/96      Clinton Gas Systems Inc              Oil and gas exploration, prod    JointEnergy Dvlp Investments 
06/10/96         08/23/96      Bailey Corp                          Manufacture rubber products      Vernco Acquisition Corp
06/14/96         09/13/96      Bugaboo Creek Steak House Inc        Own, op restaurants              Longhom Steaks Inc
06/21/96         09/26/96      Applied Bioscience Intl (IMS)        Provide medical testing svcs     Pharmaceutical Product Dvlp
07/10/96         09/25/96      Brooktree Corp                       Manufacture semiconductors       Rockwell International Corp
07/03/96         09/05/97      Golden Poultry Co Inc                Produce, wholesale poultry       GoldKist Inc
07/11/96         10/11/96      Fay's Inc                            Own and operate drug stores      Thrift Drug Inc (JC Penney Co) 
07/12/96         10/10/96      ADCO Technologies Inc                Mnfr adhesives and sealants      Astor Chemicals
07/12/96         10/23/96      Supercuts Inc                        Operate barber shops             Regis Corporation
07/19/96         08/30/96      FluoroScan Imaging Systems           Mnfr, whl x-ray imaging device   Hologic Designs
08/02/96         11/07/96      Colonial Data Technologies           Manufacture telecommun equip     US Order Inc
08/26/96         12/20/96      Home Shopping Network (Liberty)      Own, op TV Broadcasting statn    Silver King Communication Inc
09/09/96         09/23/96      Crocker Realty Trust Inc             REIT                             Highwoods Properties Inc
09/10/96         12/05/96      Acquitron Medical Inc                Manufacture apnea monitors       Nellcor Puritan-Bernett
09/11/96         12/02/96      ReadiCare Inc                        Own and operate HMO's            HealthSouth Corp
09/16/96         11/07/97      Centerior Energy Corp                Electric utility holding co      Ohio Edison Co
09/24/96         01/02/97      Datalogix International              Develop business software        Oracle Corp
10/01/96         04/25/97      Cosmetic Center Inc                  Operate cosmetic stores          Prestige Fragrance & Cosmetics 
10/10/96         02/21/97      Knogo North America Inc              Mnfr search, navigation equip    Video Sentry Corp
10/10/96         11/27/96      WCI Steel (Renco Group Inc)          Manufacture steel                Renco Group Inc
10/17/96         02/27/97      Triad Systems Corp                   Develop turnkey computer sys     Investor Group
11/06/96         03/07/97      Midland Financial Group Inc          Fire, marine , casualty ins co   Progressive Corp
11/06/96         12/11/96      Union Switch & Signal Inc            Manufacture railroad equip       Ansaldo Transport SpA
11/11/96         03/17/97      AHI Healthcare Systems Inc           Pvd physician contracting svcs   FPA  Medical Management Inc 
11/13/96         12/1?/96      Edmark Corp                          Develop Educational Software     IBM Corp
11/18/96         03/27/97      Tyco Toys Inc                        Manufacture and wholesale toys   Mattel Inc  

====================================================================================================================================
Value of     Enterprise                           Premium
-------------------------------------------------------------------
Acquiror                                 Transaction          Value       1 Day Prior     1 Week Prior    4 Weeks Prior  
Business Description                        ($mil)          ($mil)      to Annc. Date    to Annc. Date   to Annc. Date  
- ------------------------------------------------------------------------------------------------------------------------------------

Mnfr audio, video equipment                  109.1         109.595         29.41          57.14             49.15
Mnfr indl fasteners, tools                    55.4          91.567        127.20         136.67            110.37
Real estate investment trust                  82.9         141.614         37.14          45.46             45.46
Own, op nursing care facilities              126.9         126.755         25.11          43.42             58.92 
Mnfr orthopedic devices                       45.2          44.871         26.45          43.89             49.03 
Mnfr inter-networking systems                 92.4          71.540         41.55          70.63             73.00 
Mnfr indl labeling machines                   42.5          43.333         79.49          79.49             62.79
Insurance holding company                     22.6          26.703         88.68         108.33            117.39 
Real estate investment trust                  22.8        1293.505         10.94          16.44             15.29   
Manufacture automotive parts                 128.9         140.935         66.67          72.41             78.57
Own, op boat dealerships                      30.6          49.597          4.67          20.00              7.14
Own, op radio bakstg stations                104.0          89.166         11.11          29.87             19.05
Pvd comm phy sys & bus forms svcs             90.1          85.540          1.05          28.86             36.71
Provide discount club svcs                   381.8         382.225         38.46          54.29             36.17
Investor group                               798.4         791.162         29.73          47.69             47.69
Real Estate investment trust                 537.5         531.940         10.20          11.60             13.03
Own, op outpatient surgery ctr                64.8          54.952         13.74          29.05             34.21
Pvd Financial services                        39.2         193.919          4.49           6.67             12.53
Mnfr, whl, install LAN, WAN                  118.4         112.039        -10.64          19.97             39.01
Investment firm                               38.4          52.887          3.85          14.89             31.71
Investment holding company                    47.8         106.359          5.46           6.06             11.11
Own and operate steakhouses                   48.5          55.641          9.19          16.02             10.82
Pvd co??  phy research svcs                  491.5         483.418         75.34          82.86             77.78
Mnfr aircraft, defense systems               261.8         273.377         42.86          64.38             16.51
Produce, wholesale poultry                     521         209.708         52.00          50.00             39.02
Own and operate drug stores                  277.9         352.368         27.50          61.91             61.91
Mnfr specialty chemicals                      53.8          54.141         28.13          51.85             57.69
Operate hairstyling salons                   175.1         174.379         55.29          53.04             60.00
Mnfr and whl X-ray systems                    59.1          53.882        116.00         109.35             70.10
Pvd equip rental, leasing svcs               186.5         176.021         20.00          33.33             -6.80 
Operate television stations                 1216.9        1069.458         38.95          62.46             62.46
Real estate investment trust                  76.1         557.561         18.80          20.30             21.85
Mnfr elect?patient monitors                   56.6          56.176         18.06          21.53             40.07
Own, op outpatient surgery dr                 73.9          70.736         66.79          55.42             55.42
Electric utility                            1612.6        6202.925         42.82          40.52             42.82
Develop database software                     80.0          63.045         28.00          42.22             56.10 
Own and op retail stores                      32.8          30.680         17.39          45.33            103.47 
Provide electrical services                   48.8          45.572         -3.38          13.31              7.45
Mnfr steel products                           56.5         437.182         17.65          29.03             77.78 
Investor group                               193.1         225.973         68.18          60.87             89.74   
Insurance holding company                     47.2          72.692         30.91          24.14
Mnfr train and transp equip                   27.1         135.632          3.57           3.57
Pvd health care mgmt services                117.0         103.179         10.90          34.00             23.69
Mnfr computers, office equip                 123.8          81.322         35.52          63.16             31.92
Mnfr, whl games, toys                        737.4        1073.147         73.69          80.12             94.53

====================================================================================================================================

-----------------------------------
Acquiror                                  3 Months Prior     1 Year Prior
Business Description                      to Annc Date       to Annc Date
- ------------------------------------------------------------------------------------------------------------------------------------

Mnfr audio, video equipment                   46.67             12.82
Mnfr indl fasteners, tools                   -43.20            -43.20  
Real estate investment trust                  -7.69              6.67
Own, op nursing care facilities                
Mnfr orthopedic devices                 
Mnfr inter-networking systems                 73.00         
Mnfr indl labeling machines                   94.44             89.19     
Insurance holding company                     25.00             25.00 
Real estate investment trust                 -58.88            -50.59
Manufacture automotive parts                  24.22            -13.04  
Own, op boat dealerships                     100.00              3.45
Own, op radio bakstg stations                 28.21             56.25
Pvd comm phy sys & bus forms svcs             48.84             41.18 
Provide discount club svcs                    38.46            -22.30  
Investor group                                29.73             -7.69 
Real estate investment trust                  24.17
Own, op outpatient surgery ctr               620.95            -36.92
Pvd financial services                        17.70            108.98  
Mnfr, whl, install LAN, WAN                  119.00            -20.36 
Investment firm                               12.50             80.00 
Investment holding company                    55.56             68.67
Own and operate steakhouses                  -60.93            -30.62
Pvd comm  phy research svcs                   77.78            204.76  
Mnfr aircraft, defense systems                71.43            -13.04
Produce, wholesale poultry                    29.55            142.55
Own and operate drug stores                   82.14             72.88 
Mnfr specialty chemicals                     368.57            105.00
Operate hairstyling salons                    99.25             50.86 
Mnfr and whl X-ray systems                   134.62            131.63
Pvd equip rental, leasing svcs               -45.86             13.68 
Operate television stations                   -6.55             27.23 
Real estate investment trust                   5.02             58.40 
Mnfr elect?patient monitors                   23.34             22.43 
Own, op outpatient surgery dr                 66.83            120.65
Electric utility                              50.21              2.49
Develop database software                     14.29            -55.24  
Own and op retail stores                      64.97             -3.11 
Provide electrical services              
Mnfr steel products                           90.48            105.13
Investor group                                72.09             68.18 
Insurance holding company                     -2.70             -5.26  
Mnfr train and transp equip                   -6.45              9.43
Pvd health care mgmt services                 34.00            -34.37  
Mnfr computers, office equip                   5.08            -61.73  
Mnfr, whl games, toys                        -33.82            -26.30   

MERGER PREMIUMS TO MARKET VALUE ANALYSIS
MERGERS WITH TARGET PRICE BETWEEN $5 AND $10 PER SHARE
ANNOUNCED AND COMPLETED 1/1/96 - 2/3/99
(continued)

================================================================================

DATE          DATE         
ANNOUNCED  EFFECTIVE   TARGET NAME                           TARGET BUSINESS DESCRIPTION             ACQUIROR NAME           
- -----------------------------------------------------------------------------------------------------------------------------------

12/10/96   04/01/97    Softdesk Inc                          Develop, wholesale CAD software         Autodesk Inc            
12/23/96   05/09/97    Star Sight Telecast Inc               Pvd cable programming svcs              Gemstar International Group
12/26/96   04/16/97    Royce Laboratories Inc                Mnfr pharmaeceuticals products          Watson Pharmaceuticals Inc.
01/17/97   04/24/97    American Recreation Centers           Own, op bowling, rec centers            AMF Bowling Centers(AMF Group)
01/27/97   07/24/97    Cardiometrics Inc                     Mnfr surgical, medical equip            EndoSonics Group
02/11/97   05/29/97    Fractal Design Corp                   Develop graphics software               MetaTools Inc
02/11/97   03/24/97    Innotech Inc                          Mnfr electro-medical prods              Johnson & Johnson
02/18/97   07/01/98    Contour Medical(Retirement)           Mnfr surgical supplies                  Sun Healthcare Group Inc 
02/18/97   07/01/98    Retirement Care Associates Inc        Own, operate nursing homes              Sun Healthcare Group Inc 
03/06/97   07/31/97    Allwaste Inc                          Pvd asbestos treatment svcs             Philip Environmental Inc
03/06/97   08/13/97    Crop Growers Corp                     Insurance agency                        Fireman's Fund Insurance Co
03/11/97   04/15/97    TPC Corp                              Pvd gas transmission svcs               PacifiCorp Holdings Inc
03/21/97   06/12/97    CrossComm Corp                        Mnfr computer networking equip          Olicom A/S
03/27/97   03/27/97    Strober Organization Inc              Wholesale building materials            Hamilton Acquisition LLC
03/31/97   06/03/97    Peak Technologies Group Inc           Whl integrated systems                  Moore Corp Ltd          
04/10/97   06/13/97    ERO Inc                               Manufacture toys                        Hedstrom Corp(Hedstrom Hldgs)
04/10/97   06/26/97    Microcom Inc                          Mnfr data comm products                 Compaq Computer Corp
04/18/97   07/10/97    LIVE Entertainment Inc                Whl, retail recorded music              Investor Group
05/30/97   07/09/97    Integrated Living Communities         Pvd nursing, personal care svcs         Whitehall Street Real Estate
05/30/97   10/16/97    National Picture and Frame Co         Mnfr picture, mirror frames             Colonnade Capital LLC
06/03/97   09/08/97    Physician Corp of America             Own and operate HMO's                   Humana Inc
06/05/97   07/14/97    DIGEX Inc                             Develop Internet software               Intermedia Communications Inc
06/20/97   10/23/97    Conwest Energy Corp                   Oil and gas exploration prodn           Forcenergy Inc
07/02/97   10/28/97    Calnetics Corp                        Manufacture plastic products            Summa Industries Inc
07/03/97   09/26/97    Krystal Co                            Own, op fast food restaurants           Port Royal Holdings Inc 
07/10/97   11/18/97    Airways Corp                          Passenger airline                       AirTran Holdings Inc
07/14/97   10/28/97    Katz Media Group                      Advertising agency                      Investor Group
07/24/97   10/28/97    Astrotech International Corp          Pvd storage tank maintenance            ITEQ Inc     
07/25/97   12/01/97    Homegate Hospitality Inc              Own and operate hotels                  Prime Hospitality Corp
07/25/97   08/28/97    Imo Industries Inc                    Mnfr industrial controls, pumps         Constellation Capital Partners
07/31/97   09/29/97    Interactive Group Inc                 Dvlp, whl comp integrated sys           DataWorks Corp    
08/04/97   12/31/97    Belmont Homes Inc                     Mnfr prefabricated houses               Cavalier Homes Inc
08/04/97   11/19/97    Gynecare Inc                          Pvd biotech prod dvlp services          Johnson & Johnson 
08/14/97   12/18/97    Technology Service Group Inc          Mnfr cellular telephone                 Eloote
08/25/97   10/03/97    BioWhittaker Inc                      Mnfr, whl medical testing prods         Cambrex Corp
08/25/97   01/23/98    PerSeptive Biosystems Inc             Mnfr chromatography equipment           Perkin-Elmer Corp 
09/17/97   12/12/97    Designer Holdings(New Rio LLC)        Dvlp, mkt designer sportswear           Warraco Group
09/23/97   01/22/98    El Chico Restaurant Inc               Own and operate restaurants             Investor Group
09/26/97   02/03/98    Sagebrush Inc                         Own and operate eating places           WSMP Inc         
09/26/97   04/28/98    Skyline Chili Inc                     Operate, franchise restaurants          Investor Group     
09/29/97   11/26/97    CompuRAD Inc                          Pvd healthcare software                 Lumisys Inc      
10/01/97   12/05/97    Alpine Lace Brands Inc                Whl dairy products, cheese              Land O'Lakes Inc 
10/15/97   11/21/97    Thompson PBE Inc                      Whl automotive paint, supplies          FinishMaster Inc(Lacey Distn)
10/20/97   01/29/98    Cruise America Inc                    Own, op trailer dealership              Budget Group Inc 
11/07/97   05/28/98    Medicus Systems Corp                  Develop, whl medical software           QuadraMed Corp  
11/17/97   03/10/98    Shared Technologies Fairchild         Mnfr telecommunications equip           Intermedia Communications Inc
11/17/97   03/02/98    Visigenic Software Inc                Dvlp database access software           Borland International Inc
11/21/97   01/20/98    New Jersey Steeel(Von Roll)           Mnfr steel reinforcing bars             Co-Steel Inc     

VALUE OF   ENTERPRISE                         PREMIUM   
-------------------------------------------------
DATE        ACQUIROR                           TRANSACTION        VALUE      1 DAY PRIOR      1 WEEK PRIOR    4 WEEKS PRIOR
ANNOUNCED   BUSINESS DESCRIPTION                   ($ MIL)      ($ MIL)     TO ANNC. DATE    TO ANNC. DATE    TO ANNC. DATE 
- ----------------------------------------------------------------------------------------------------------------------------

12/10/96    Design drafting software                  91.7       98.442             60.00            66.76           146.67
12/23/96    Mnfr simplified VCR programmer           273.1      266.569             17.86            20.84            44.28
12/26/96    Mnfr pharmacuetical products              84.2       81.639              0.57            22.91            18.52
01/17/97    Own, op bowling centers                   70.7       63.830             15.25            33.33            70.00
01/27/97    Mnfr image processing equip               56.8       37.872             18.28            13.81            47.12
02/11/97    Develop software                         140.2      136.069             44.97            40.44             0.99
02/11/97    Mnfr medical equip and prods             135.6      116.561             54.93            64.18            54.93
02/18/97    Pvd long-term healthcare svcs             55.2       72.823             21.43            47.83            58.14
02/18/97    Pvd long-term healthcare svcs            305.9      292.435             19.44            14.67            21.13
03/06/97    Provide waste management svcs            506.7      534.883             48.22            63.35            95.22
03/06/97    Insurance company                         82.1       89.061             20.59            15.49            41.38
03/11/97    Pvd telephone commun services            408.5      398.392             52.17            65.05            55.48
03/21/97    Mnfr communications equipment             84.6       77.829             74.32            70.17            70.17
03/27/97    Investment company                        33.4       30.937                               3.23             2.13 
03/31/97    Mnfr manifold business forms             169.8      192.090            108.70            97.26            65.52 
04/10/97    Manufacture games and toys               203.6      201.739             12.50            16.88            30.44
04/10/97    Manufacture personal computers           267.6      273.087             54.76            91.18            35.42 
04/18/97    Investor group                            53.1       98.981              6.67             6.67            50.00 
05/30/97    Real estate development firm              79.7       78.553             26.90            21.05            50.82 
05/30/97    Private equity firm                       60.3       67.073             31.51            28.00            28.00  
06/03/97    Own and operate HMOs                     405.1      260.352             12.00            12.00            23.08  
06/05/97    Pvd telecommunications svcs              171.6      166.838             19.54            35.95            31.65
06/20/97    Oil, gas exploration and prodn           102.0      101.521             11.06            11.06            18.93  
07/02/97    Mnfr plastic conveyor parts               23.4       26.363             30.67            33.64            25.11  
07/03/97    Investment company                       145.4      145.677            132.00           169.77           176.19  
07/10/97    Passenger airline                         63.7       75.936             26.74            29.76            32.93
07/14/97    Investor group                           371.9      362.128             44.26            69.23            93.41  
07/24/97    Prvds treatment for liqds, gas           116.7      147.176             45.70            63.40            78.41
07/25/97    Own, operate, franchise hotels           133.2      123.069             30.25            33.77            28.56
07/25/97    Investment company                       117.3      430.169             18.74            20.00            22.61
07/31/97    Dvlp computer integrated sys              55.0       59.004             54.40            44.75            71.56
08/04/97    Manufacture mobile homes                  74.0       68.986            -17.90             0.65             9.47
08/04/97    Mnfr medical equip and prods              70.5       65.680             -2.82             1.66            37.67
08/14/97    Mnfr public common products               32.9       35.485             -4.55             7.14            41.89
08/25/97    Mnfr speciality chemicals                130.5      130.017             17.77            38.87            47.68
08/25/97    Mnfr analytical instruments              288.1      339.306             16.80            24.88            50.42
08/17/97    Mnfr women's intimate apparel            353.6      290.492             17.28            50.36            58.49
09/23/97    Investor group                            49.2       58.650             64.52            75.86           104.00
08/26/97    Produce prepared sandwiches               39.4       41.395             15.87            13.38            21.20
09/26/97    Investor group                            22.9       26.661                               1.89             5.88
09/29/97    Mnfr medical imaging equipment            25.0       23.321              1.32             3.43             1.32
10/01/97    Produce butter, milk and meats            48.4       59.309             15.87            48.98            46.00
10/15/97    Whl automotive paint, coatings            69.3      116.683             25.49            33.33            42.22
10/20/97    Pvd passenger car rental svcs             59.3      144.263             17.95            13.70            39.87
11/07/97    Pvd info sys for healthcare               23.3       46.930             36.36            39.54            25.00
11/17/97    Pvd telecommunications svcs              503.6      585.377             66.67           106.90           163.74
11/17/97    Develop software                         148.4      130.467             92.00            64.00            92.00
11/21/97    Mnfr steel and steel products            173.5      176.789            162.86           170.59           166.67

DATE                        3 MONTHS PRIOR                1 YEAR PRIOR
ANNOUNCE                    TO ANNC. DATE                 TO ANNC. DATE
- -----------------------------------------------------------------------------------

12/10/96                            111.43                       -32.73
12/23/96                             16.22                        94.60
12/26/96                             30.95                       -36.21
01/17/97                             58.14                        33.33
01/27/97                        
02/11/97                             -6.82                       -18.25
02/11/97                            400.00                       -50.95
02/18/97 
02/18/97                             91.11                         3.79
03/06/97                            122.44                       128.80
03/06/97                             57.69                        -2.38
03/11/97                            652.84                       946.63
03/21/97                             70.10                        -9.57
03/27/97                              4.35                        37.14
03/31/97                             50.00                        -1.37
04/10/97                             47.54                        73.08
04/10/97                             35.42                       -43.48
04/18/97   
05/30/97                             73.58
05/30/97                             22.29                        18.52
06/03/97                             65.93                       -45.63
06/05/97                             20.93
06/20/97                             84.20                        89.99
07/02/97                             20.00                       -13.53
07/03/97                            167.77                       182.93
07/10/97                             -7.66                       -39.47
07/14/97                            255.93                       120.00
07/24/97                             96.49                       149.83
07/25/97                             83.26
07/25/97                            116.92                        44.62
07/31/97                            137.54                       131.60
08/04/97                              2.30                       -42.22
08/04/97                             37.67                        73.89
08/14/97                             23.48                       -34.40
08/25/97                              8.19                        63.23
08/25/97                             92.78                        68.27
08/17/97                              7.32                       -51.65
09/23/97                             39.73                        54.55
08/26/97  
09/26/97                              8.00                        18.68
09/29/97                              3.50                        -4.46
10/01/97                             60.53                        43.22
10/15/97                             45.45                        10.34
10/20/97                             36.28                        64.67
11/07/97                            -96.00
11/17/97
11/17/97                              19.27                      -41.25
11/21/97                             148.65                      411.11

Page F - 6

Merger Premiums to Market Value Analysis
Mergers with Target Price Between $5 and $10 per Share
Announced and Completed 1/1/96--2/3/99
(continued)

==================================================================================================================================
Date         Date
Announced    Effective    Target Name                                    Target Business Description
- ----------------------------------------------------------------------------------------------------------------------------------

11/24/97     02/03/98     Communication Central Inc.                     Pvd telecommunications svcs
12/19/97     06/03/98     Eclipse Telecommunications Inc                 Pvd radiotelecommunication svc
12/29/97     03/17/98     Heartstream,Inc                                Mnfr defibrilators
01/06/98     03/02/98     DBA Systems, Inc                               Dvlp digital imaging systems
01/14/98     05/02/98     Meridian Point Realty Trust                    Real estate investment trust
01/15/98     06/11/98     OHM Corp                                       Operates  hazardous waste sites
01/16/98     02/25/98     Checkmate Electronics Inc                      Mgfr, whl payment systems
01/21/98     05/15/98     BKC Semiconductors, Inc                        Mfg semiconductor devices
01/22/98     09/29/98     BT Office Products Int'l Inc                   Whl office stationery supplies
01/28/98     03/05/98     Sun Coast Industries Inc                       Mnfr plastic products
01/29/98     06/05/98     Monroe Inc                                     Mnfr., whl concrete, sand, gravel
01/29/98     05/21/98     ProSource Inc (Onex Corp)                      Wholesale groceries
02/04/98     06/09/98     TresCom International Inc                      Pvd communications svcs
02/10/98     06/30/98     Ryan Beck & Co., Livingston, NJ                Securities brokerage firm
02/17/98     08/17/98     Bell Sports Corp                               Mnfr bicycle equip., accessories
02/24/98     05/04/98     Somstogen Inc                                  Dvlp human blood substitutes
02/25/98     09/30/98     FAC Realty Trust Inc                           REIT, own, op, shopping centers
03/02/98     04/30/98     Signature Brands USA Inc                       Mnfr, whl consumer housewares
03/05/98     05/20/98     Intelligent Electronics Inc                    Whl, ret computer systems
03/06/98     04/30/98     Proxima Corp                                   Mnfr PC liq crys display prods
03/10/98     06/19/98     Concorn Inc                                    Manufacture radio filters
03/16/98     07/10/98     International Murex Tech Corp                  Mnfr in-vitro test systems
04/03/98     07/21/98     Bertucci's Inc                                 Own and operate restaurants
04/15/98     05/29/98     Simulation Sciences Inc                        Dvlp simulation software
04/28/98     07/20/98     Hein-Werner Corp                               Mnfr automotive service equip
04/29/98     09/25/98     Group 1 Software Inc                           Develop software
05/04/98     06/10/98     Farah Inc                                      Mnfr, ret family apparel
05/07/98     06/30/98     InTone Systems International                   Pvd systems integration svcs
05/29/98     10/20/98     Emerging Communications Inc                    Pvd local telephone svcs
05/29/98     08/06/98     Mid-America Realty Investments                 Real estate investment trust
06/01/98     08/28/98     PST Vans Inc                                   Trucking company
06/11/98     07/02/98     Imo Industries Inc                             Mnfr industrial controls, pumps
07/14/98     10/26/98     New West Eyeworks Inc                          Own, op eyeglass stores
07/24/98     12/23/98     Information Storage Devices                    Mnfr voice recorded circuits
07/28/98     09/10/98     CyberMedia Inc                                 Dvlp, whl support software prod
08/03/98     10/16/98     Continental Natural Gas Inc                    Gas utility
08/12/98     12/15/98     Walshire Assurance                             Insurance company
08/26/98     01/08/99     Toastmaster Inc                                Mnfr electric consumer appl
09/14/98     09/14/98     Ion CMT Corp                                   Pvd Internet svcs, products
10/01/98     01/07/99     Richey Electronics Inc                         Whl electronic components
10/29/98     12/31/98     Transition Systems Inc                         Develop healthcare software
11/02/98     12/10/98     AquaPenn Spring Water Co Inc                   Produce, whl spring water
11/10/98     12/22/98     Intensive Healthcare Corp                      Pvd acute, long-term care svcs
11/10/98     12/16/98     Steel of West Virginia Inc                     Manufacture steel products

==================================================================================================================================
Date         Date
Announced    Effective    Target Name                                    Acquiror Name
- ----------------------------------------------------------------------------------------------------------------------------------

11/24/97     02/03/98     Communication Central Inc.                     Davel Communication Group Inc
12/19/97     06/03/98     Eclipse Telecommunications Inc                 IXC Communications, Inc
12/29/97     03/17/98     Heartstream,Inc                                Hewlett Packard Co
01/06/98     03/02/98     DBA Systems, Inc                               Titan Corp
01/14/98     05/02/98     Meridian Point Realty Trust                    EastGroup Properties
01/15/98     06/11/98     OHM Corp                                       Internatinal Technology Corp
01/16/98     02/25/98     Checkmate Electronics Inc                      Internatinal Verified Inc
01/21/98     05/15/98     BKC Semiconductors, Inc                        Microsemi Corp
01/22/98     09/29/98     BT Office Products Int'l Inc                   Buhmann NV
01/28/98     03/05/98     Sun Coast Industries Inc                       Kerr Group Inc
01/29/98     06/05/98     Monroe Inc                                     US Aggregates Inc
01/29/98     05/21/98     ProSource Inc (Onex Corp)                      AmeriServe Food Distn Inc
02/04/98     06/09/98     TresCom International Inc                      Primus Telecommunications
02/10/98     06/30/98     Ryan Beck & Co., Livingston, NJ                BankAtlantic Bancorp, Florida
02/17/98     08/17/98     Bell Sports Corp                               HB Acquisition Corp
02/24/98     05/04/98     Somstogen Inc                                  Baxter International Inc
02/25/98     09/30/98     FAC Realty Trust Inc                           Prometheus Southeast Retail
03/02/98     04/30/98     Signature Brands USA Inc                       Sunbeam Corp
03/05/98     05/20/98     Intelligent Electronics Inc                    Xerox Corp
03/06/98     04/30/98     Proxima Corp                                   ASK AS
03/10/98     06/19/98     Concorn Inc                                    Communications Instruments Inc
03/16/98     07/10/98     International Murex Tech Corp                  Abbott Laboratories
04/03/98     07/21/98     Bertucci's Inc                                 NE Restaurant Co Inc
04/15/98     05/29/98     Simulation Sciences Inc                        Siebe PLC
04/28/98     07/20/98     Hein-Werner Corp                               Snap-On Inc
04/29/98     09/25/98     Group 1 Software Inc                           COMNET Corp
05/04/98     06/10/98     Farah Inc                                      Tropical Sportswear Intl Corp
05/07/98     06/30/98     InTone Systems International                   Anis Corp
05/29/98     10/20/98     Emerging Communications Inc                    Innovative Communication Co
05/29/98     08/06/98     Mid-America Realty Investments                 Bradley Real Estate Inc
06/01/98     08/28/98     PST Vans Inc                                   US Xpress Enterprises Inc
06/11/98     07/02/98     Imo Industries Inc                             Constellation Capital Partners
07/14/98     10/26/98     New West Eyeworks Inc                          National Vision Associates Ltd
07/24/98     12/23/98     Information Storage Devices                    Windbond Electronic Corp
07/28/98     09/10/98     CyberMedia Inc                                 Network Associates Inc
08/03/98     10/16/98     Continental Natural Gas Inc                    CMS Energy Corp
08/12/98     12/15/98     Walshire Assurance                             Kingsway Financial Services
08/26/98     01/08/99     Toastmaster Inc                                Salton/Maxim Houswares Inc
09/14/98     09/14/98     Ion CMT Corp                                   Qwest Commun Int Inc
10/01/98     01/07/99     Richey Electronics Inc                         Arrow Electronics Inc
10/29/98     12/31/98     Transition Systems Inc                         Eclipsys Corp
11/02/98     12/10/98     AquaPenn Spring Water Co Inc                   Danone Group
11/10/98     12/22/98     Intensive Healthcare Corp                      Select Medical Corp
11/10/98     12/16/98     Steel of West Virginia Inc                     Roanoke Electric Steel

==================================================================================================================================
Date         Date                                                        Acquiror
Announced    Effective    Target Name                                    Business Description
- ----------------------------------------------------------------------------------------------------------------------------------

11/24/97     02/03/98     Communication Central Inc.                     Pvd pay telephone commun svcs
12/19/97     06/03/98     Eclipse Telecommunications Inc                 Pvd long distance svcs
12/29/97     03/17/98     Heartstream,Inc                                Mnfr computer testing equip
01/06/98     03/02/98     DBA Systems, Inc                               Pvd Computer sys design svcs
01/14/98     05/02/98     Meridian Point Realty Trust                    Real Estate investment trust
01/15/98     06/11/98     OHM Corp                                       Pollution control engineering
01/16/98     02/25/98     Checkmate Electronics Inc                      Mnfr, whl electric payment sys
01/21/98     05/15/98     BKC Semiconductors, Inc                        Mnfr semi-conductor products
01/22/98     09/29/98     BT Office Products Int'l Inc                   Mnfr folding paperboard boxes
01/28/98     03/05/98     Sun Coast Industries Inc                       Mnfr plastic packaging prods
01/29/98     06/05/98     Monroe Inc                                     Manufacture building products
01/29/98     05/21/98     ProSource Inc (Onex Corp)                      Wholesale food products
02/04/98     06/09/98     TresCom International Inc                      Pvd telecommunications svcs
02/10/98     06/30/98     Ryan Beck & Co., Livingston, NJ                Savings and loan
02/17/98     08/17/98     Bell Sports Corp                               Investment firm
02/24/98     05/04/98     Somstogen Inc                                  Mnfr health care products
02/25/98     09/30/98     FAC Realty Trust Inc                           Real estate investment trust
03/02/98     04/30/98     Signature Brands USA Inc                       Mnfr, whl household appliances
03/05/98     05/20/98     Intelligent Electronics Inc                    Mnfr business machine, fin co
03/06/98     04/30/98     Proxima Corp                                   Mnfr liquid crystal displays
03/10/98     06/19/98     Concorn Inc                                    Mnfr, whl relay systems
03/16/98     07/10/98     International Murex Tech Corp                  Mnfr pharmeceuticals, med equip
04/03/98     07/21/98     Bertucci's Inc                                 Own, operate restaurants
04/15/98     05/29/98     Simulation Sciences Inc                        Mnfr appliance controls
04/28/98     07/20/98     Hein-Werner Corp                               Manufacture tools
04/29/98     09/25/98     Group 1 Software Inc                           Pvd dat processing svcs
05/04/98     06/10/98     Farah Inc                                      Mnfr, whl mens sportswear
05/07/98     06/30/98     InTone Systems International                   Pvd computer related services
05/29/98     10/20/98     Emerging Communications Inc                    Investment company
05/29/98     08/06/98     Mid-America Realty Investments                 Real estate investment trust
06/01/98     08/28/98     PST Vans Inc                                   Trucking company
06/11/98     07/02/98     Imo Industries Inc                             Investment company
07/14/98     10/26/98     New West Eyeworks Inc                          Own, op optical goods stores
07/24/98     12/23/98     Information Storage Devices                    Mnfr electronic equipment
07/28/98     09/10/98     CyberMedia Inc                                 Develop network software
08/03/98     10/16/98     Continental Natural Gas Inc                    Electric and gas utility
08/12/98     12/15/98     Walshire Assurance                             Pvd non-standard auto ins svcs
08/26/98     01/08/99     Toastmaster Inc                                Mnfr electric housewares, fans
09/14/98     09/14/98     Ion CMT Corp                                   Pvd telephone commun svcs
10/01/98     01/07/99     Richey Electronics Inc                         Whl electronic components
10/29/98     12/31/98     Transition Systems Inc                         Pvd data processing svcs
11/02/98     12/10/98     AquaPenn Spring Water Co Inc                   Produce, whl milk, cookies, jams
11/10/98     12/22/98     Intensive Healthcare Corp                      Own, op acute hospitals
11/10/98     12/16/98     Steel of West Virginia Inc                     Mnfr steel bar products

==================================================================================================================================
Premium
Value of     Enterprise     ---------------------------------
Date         Date                                                 Transaction          Value       1 Day Prior      1 Week Prior
Announced    Effective    Target Name                                 ($ mil)        ($ mil)     to Annc. Date     to Annc. Date
- ----------------------------------------------------------------------------------------------------------------------------------

11/24/97     02/03/98     Communication Central Inc.                   102.4        133.097             30.23             25.37
12/19/97     06/03/98     Eclipse Telecommunications Inc               122.2        122.055             18.02             19.92
12/29/97     03/17/98     Heartstream,Inc                              130.6        110.930             -6.71             18.17
01/06/98     03/02/98     DBA Systems, Inc                              37.9         28.993             38.40             44.29
01/14/98     05/02/98     Meridian Point Realty Trust                   51.7         41.121             38.78             65.85
01/15/98     06/11/98     OHM Corp                                     326.8        343.050             24.21             45.08
01/16/98     02/25/98     Checkmate Electronics Inc                     47.2         46.947              4.83              9.37
01/21/98     05/15/98     BKC Semiconductors, Inc                       13.3         15.905             66.73             59.48
01/22/98     09/29/98     BT Office Products Int'l Inc                 138.1        689.726             32.53             78.86
01/28/98     03/05/98     Sun Coast Industries Inc                      45.5         63.493             56.36             62.26
01/29/98     06/05/98     Monroe Inc                                    50.3         60.903              5.07             10.46
01/29/98     05/21/98     ProSource Inc (Onex Corp)                    343.3        293.910            126.42            106.90
02/04/98     06/09/98     TresCom International Inc                    134.7        142.626             25.17             30.86
02/10/98     06/30/98     Ryan Beck & Co., Livingston, NJ               35.9         37.324             23.21             21.29
02/17/98     08/17/98     Bell Sports Corp                             165.7        228.365             13.89             13.10
02/24/98     05/04/98     Somstogen Inc                                232.9        175.471             35.85             39.81
02/25/98     09/30/98     FAC Realty Trust Inc                         100.0        348.946              7.04             21.60
03/02/98     04/30/98     Signature Brands USA Inc                      81.7        246.680             57.14             60.98
03/05/98     05/20/98     Intelligent Electronics Inc                  342.4        298.936              5.74             19.22
03/06/98     04/30/98     Proxima Corp                                  82.9         70.022             31.34             25.71
03/10/98     06/19/98     Concorn Inc                                   51.7         44.470             33.33             31.65
03/16/98     07/10/98     International Murex Tech Corp                232.7        236.760             21.64             38.21
04/03/98     07/21/98     Bertucci's Inc                                96.5        104.175             35.48             35.48
04/15/98     05/29/98     Simulation Sciences Inc                      146.5         99.747             24.03             16.79
04/28/98     07/20/98     Hein-Werner Corp                              37.5         32.296             52.73             65.25
04/29/98     09/25/98     Group 1 Software Inc                          11.8         61.592             71.60             61.51
05/04/98     06/10/98     Farah Inc                                     93.6        144.521             33.33             44.00
05/07/98     06/30/98     InTone Systems International                  44.9         39.672             18.80             14.97
05/29/98     10/20/98     Emerging Communications Inc                  112.3        243.057             46.43             42.61
05/29/98     08/06/98     Mid-America Realty Investments               153.2        148.756              5.00              6.33
06/01/98     08/28/98     PST Vans Inc                                  83.9         85.603             32.80             35.82
06/11/98     07/02/98     Imo Industries Inc                             9.1 np                         -1.05              4.44
07/14/98     10/26/98     New West Eyeworks Inc                         76.7         81.111             23.81             33.33
07/24/98     12/23/98     Information Storage Devices                   66.3         68.384             46.34             36.36
07/28/98     09/10/98     CyberMedia Inc                               130.1        108.150             25.62             38.18
08/03/98     10/16/98     Continental Natural Gas Inc                  154.2        172.276              8.81             35.59
08/12/98     12/15/98     Walshire Assurance                            43.1         42.346             10.00             53.49
08/26/98     01/08/99     Toastmaster Inc                              101.2         93.699              3.70             21.74
09/14/98     09/14/98     Ion CMT Corp                                 202.9        184.188             65.52             60.00
10/01/98     01/07/99     Richey Electronics Inc                       101.8        183.792             52.73             68.00
10/29/98     12/31/98     Transition Systems Inc                       284.7        219.529             57.50             49.89
11/02/98     12/10/98     AquaPenn Spring Water Co Inc                 110.3        110.450             34.19            100.00
11/10/98     12/22/98     Intensive Healthcare Corp                    115.2        111.767             54.00             64.42
11/10/98     12/16/98     Steel of West Virginia Inc                   116.8        116.113             75.51            100.00

Mean:              34.3%            43.2%

==================================================================================================================================
Premium
----------------------------------------------------------------
Date         Date                                                 4 Weeks Prior          3 Months Prior              1 Year Prior
Announced    Effective    Target Name                             to Annc. Date           to Annc. Date             to Annc. Date
- ----------------------------------------------------------------------------------------------------------------------------------

11/24/97     02/03/98     Communication Central Inc.                     12.00                  918.18                    630.43
12/19/97     06/03/98     Eclipse Telecommunications Inc                 14.39                   -7.10                     16.13
12/29/97     03/17/98     Heartstream,Inc                                -8.64                   10.80                    -13.10
01/06/98     03/02/98     DBA Systems, Inc                               25.58                    5.59                     57.77
01/14/98     05/02/98     Meridian Point Realty Trust                    88.89
01/15/98     06/11/98     OHM Corp                                                               36.77                     31.36
01/16/98     02/25/98     Checkmate Electronics Inc                      37.52                   10.22                    -29.86
01/21/98     05/15/98     BKC Semiconductors, Inc                        66.73                  -58.79                    -33.31
01/22/98     09/29/98     BT Office Products Int'l Inc                   78.86                   30.18                     44.74
01/28/98     03/05/98     Sun Coast Industries Inc                       84.95                  115.00                    244.00
01/29/98     06/05/98     Monroe Inc                                      6.37                   -3.19                     74.06
01/29/98     05/21/98     ProSource Inc (Onex Corp)                     100.00
02/04/98     06/09/98     TresCom International Inc                      51.52                  332.00                    415.82
02/10/98     06/30/98     Ryan Beck & Co., Livingston, NJ                25.20                   38.57                    104.21
02/17/98     08/17/98     Bell Sports Corp                                8.61                   15.49                     90.70
02/24/98     05/04/98     Somstogen Inc                                  92.00                   58.24                    -31.43
02/25/98     09/30/98     FAC Realty Trust Inc                           29.92                   31.03                     46.15
03/02/98     04/30/98     Signature Brands USA Inc                      106.25                   73.68                    103.08
03/05/98     05/20/98     Intelligent Electronics Inc                    34.37                   44.76                    125.19
03/06/98     04/30/98     Proxima Corp                                   23.94                   58.56                     44.26
03/10/98     06/19/98     Concorn Inc                                    36.84                   36.84                     62.50
03/16/98     07/10/98     International Murex Tech Corp                  50.73                  -97.44                    -96.56
04/03/98     07/21/98     Bertucci's Inc                                 35.48                   58.49                     86.67
04/15/98     05/29/98     Simulation Sciences Inc                        11.11                  -26.61                      6.67
04/28/98     07/20/98     Hein-Werner Corp                               80.00                   83.27                     96.00
04/29/98     09/25/98     Group 1 Software Inc                           71.60                   71.63                     66.42
05/04/98     06/10/98     Farah Inc                                      39.81                   60.00                    -10.00
05/07/98     06/30/98     InTone Systems International                   28.43
05/29/98     10/20/98     Emerging Communications Inc                    54.72                   34.43
05/29/98     08/06/98     Mid-America Realty Investments                  2.44                    1.20                      9.09
06/01/98     08/28/98     PST Vans Inc                                   10.67                   24.50                    159.83
06/11/98     07/02/98     Imo Industries Inc                              2.55
07/14/98     10/26/98     New West Eyeworks Inc                          30.00                   14.29                     62.50
07/24/98     12/23/98     Information Storage Devices                    44.58                   27.66                    -38.78
07/28/98     09/10/98     CyberMedia Inc                                117.14                    8.57                    -34.48
08/03/98     10/16/98     Continental Natural Gas Inc                    46.79                    6.67                    -11.60
08/12/98     12/15/98     Walshire Assurance                             22.22                    8.20                    -18.52
08/26/98     01/08/99     Toastmaster Inc                                36.59                   13.13                    100.00
09/14/98     09/14/98     Ion CMT Corp                                   -4.00                  -25.97
10/01/98     01/07/99     Richey Electronics Inc                        127.03                   33.33                      4.35
10/29/98     12/31/98     Transition Systems Inc                         72.50                   37.52                    -31.24
11/02/98     12/10/98     AquaPenn Spring Water Co Inc                  160.00                  101.94
11/10/98     12/22/98     Intensive Healthcare Corp                      92.50                   75.09                     20.38
11/10/98     12/16/98     Steel of West Virginia Inc                     79.17                   38.71                      2.38

Mean:                       50.1%                   63.6%                     51.3%

- -------------------------------------------------------------------------------
Source: Securites Data Company, Inc. Three-month and one-year premiums
calculated using security prices from FactSet Research Systems, Inc. Commercial
banks and other similar financial institutions were excluded for the purpose of
this analysis.

Page F-7

Merger Premiums to Market Value Analysis
Mergers with Target Price Equal to or Greater than $10 per Share
Announced and Completed 1/1/96--2/3/99

==================================================================================================================================
Date         Date                                                                   
Announced    Effective    Target Name                                    Target Business Description                 
- ----------------------------------------------------------------------------------------------------------------------------------

01/05/96     07/01/96     Safety Fund Corp                               Closed-end investment fund
01/08/96     04/30/96     Local Corp                                     Mnfr defense electronics
01/08/96     03/04/96     US Delivery Systems Inc                        Pvd courier services
01/09/96     04/30/96     Technslysis Corp                               Develop software
01/18/96     07/02/96     Covita Corp                                    Manufacture medical equipment
01/22/96     04/11/96     Premier Industrial Corp                        Whl electronic parts and equip
01/24/96     08/08/96     National Lodging Corp                          Own and operate casinos
01/25/96     06/12/96     Dual Drilling (Mosrold Shippg)                 Oil and gas drilling
01/30/96     05/31/96     Daig Corporation                               Mnfr pacemakers
01/31/96     03/04/96     Tivoli Systems Inc                             Dvlp systems mgmt software
02/01/96     04/12/96     Health Wise of America Inc                     Own and operate HMO
02/05/96     04/30/96     DiMark Inc                                     Pvd database marketing svcs
02/07/96     05/07/96     Pyxis Corp                                     Provide med equip leasing svcs
02/12/96     05/01/96     Duracraft Corp                                 Mnfr electric housewares
02/13/96     09/18/96     Citicasters(American Finl Grp)                 Own, op TV, radio stations
02/14/96     03/20/96     Helene Curtis Industries Inc                   Mnfr perfumes, cosmetics
02/15/96     05/14/96     Andros Inc                                     Mnfr infrared gas analyzers
02/16/96     05/30/96     Circle K Corp                                  Operate convenience stores
02/16/96     06/13/96     Fortum Group Inc                               Own, operate nursing homes
02/20/96     07/24/96     Davidson & Associates Inc                      Develop educational software
02/20/96     07/24/96     Sierra On-Line Inc                             Develop software for games
02/23/96     07/01/96     Cray Research Inc                              Manufacture supercomputers
02/26/96     09/16/96     Sterile Concepts Inc.                          Mnfr sterilized surgical trays
02/26/96     06/18/96     Tide West Oil Co                               Oil and gas exploration, prodn
02/27/96     05/24/96     Brandon Systems Corp                           Personnel agency, consulting
02/29/96     07/10/96     Big O Tires Inc                                Own, operate tire stores
03/04/96     04/08/96     Guardsman Products Inc                         Mnfr coatings, cleaning prod
03/07/96     07/03/96     Acme-Cleveland Corp                            Mnfr metal cutting tools
03/11/96     08/02/96     Life Partners Group Inc                        Life insurance holding company
03/18/96     07/01/96     Athena Neurosciences Inc                       Manufacture pharmaceuticals
03/18/96     08/30/96     Microtek Medical Inc                           Mnfr whl surgical supplier
03/25/96     07/01/96     InStant Inc                                    Mnfr surgical instrumentation
03/26/96     08/09/96     DeBartolo Realty Corp                          Real estate investment trust
03/28/96     08/01/96     Stop & Shop Cos                                Own, op supermarkets
03/29/96     04/26/96     Great American Mgmt & Invt Inc                 Invt advice and financial svcs
03/29/96     07/08/96     Hayes Wheels International Inc                 Mnfr motor vehicle parts
03/29/96     08/07/96     MediSense Inc                                  Mnfr blood monitoring systems
03/29/96     09/03/96     Regional Acceptance Corp                       Pvd consumer financing svcs
04/01/96     04/01/97     Pacific Telesis Group                          Pvd telecommun svcs,hldg co
04/01/96     07/19/96     US Healthcare Inc                              Own and operate HMO's
04/02/96     08/15/96     Teledyne Inc                                   Manufacture aviation products
04/08/96     08/16/96     Cellular Communications Inc                    Operate cellular telephone sys
04/10/96     10/15/96     Waterhouse Investor Services                   Discount brokerage holding co
04/17/96     07/31/96     Tucker Drilling Co Inc                         Oil & gas contract drilling
04/22/96     07/10/96     StrataCom Inc                                  Manufacture telecommun equip
04/22/96     06/03/96     Westcott Communications Inc                    Pvd motion picture prodc svcs
04/29/96     03/27/97     Paul Revere Corp(Textron Inc)                  Individual disability ins co

==================================================================================================================================
Date         Date                                                                   
Announced    Effective    Target Name                                    Acquiror Name
- ----------------------------------------------------------------------------------------------------------------------------------

01/05/96     07/01/96     Safety Fund Corp                               CFX Corp, Keene, New Hampshire
01/08/96     04/30/96     Local Corp                                     Lockheed Martin Corp
01/08/96     03/04/96     US Delivery Systems Inc                        Corporate Express Inc
01/09/96     04/30/96     Technslysis Corp                               CompuWare Corp
01/18/96     07/02/96     Covita Corp                                    Pfizer Inc
01/22/96     04/11/96     Premier Industrial Corp                        Parnell Electronics PLC
01/24/96     08/08/96     National Lodging Corp                          Chartwell Leisure Associates
01/25/96     06/12/96     Dual Drilling (Mosrold Shippg)                 ENSCO International Inc
01/30/96     05/31/96     Daig Corporation                               St Jude Medical Inc
01/31/96     03/04/96     Tivoli Systems Inc                             IBM Corp
02/01/96     04/12/96     Health Wise of America Inc                     United HealthCare Corp
02/05/96     04/30/96     DiMark Inc                                     Harte-Hanks Inc
02/07/96     05/07/96     Pyxis Corp                                     Cardinal Health Inc
02/12/96     05/01/96     Duracraft Corp                                 Honeywell Inc
02/13/96     09/18/96     Citicasters(American Finl Grp)                 Jacor Communications Inc
02/14/96     03/20/96     Helene Curtis Industries Inc                   Unilever NV
02/15/96     05/14/96     Andros Inc                                     Genstar Capital Partners II LP
02/16/96     05/30/96     Circle K Corp                                  Tosco Corp
02/16/96     06/13/96     Fortum Group Inc                               Marriott International Inc
02/20/96     07/24/96     Davidson & Associates Inc                      CUC International Inc
02/20/96     07/24/96     Sierra On-Line Inc                             CUC International Inc
02/23/96     07/01/96     Cray Research Inc                              Silicon Graphics Inc
02/26/96     09/16/96     Sterile Concepts Inc.                          Mexcom Medical Inc
02/26/96     06/18/96     Tide West Oil Co                               HS Resources Inc
02/27/96     05/24/96     Brandon Systems Corp                           Interim Services Inc
02/29/96     07/10/96     Big O Tires Inc                                TBC Corp
03/04/96     04/08/96     Guardsman Products Inc                         Lilly Industries Inc
03/07/96     07/03/96     Acme-Cleveland Corp                            Danaher Corp
03/11/96     08/02/96     Life Partners Group Inc                        Conseco Inc
03/18/96     07/01/96     Athena Neurosciences Inc                       Elan Corp PLC
03/18/96     08/30/96     Microtek Medical Inc                           Isolyser Co Inc
03/25/96     07/01/96     InStant Inc                                    Medronic Inc
03/26/96     08/09/96     DeBartolo Realty Corp                          Simon Property Group Inc
03/28/96     08/01/96     Stop & Shop Cos                                Konindijike Ahold NV
03/29/96     04/26/96     Great American Mgmt & Invt Inc                 Equity Holdings, Chicago, IL
03/29/96     07/08/96     Hayes Wheels International Inc                 Motor Wheel Corp
03/29/96     08/07/96     MediSense Inc                                  Abbott Laboratories
03/29/96     09/03/96     Regional Acceptance Corp                       Southern Natl, Winston-Salem, NC
04/01/96     04/01/97     Pacific Telesis Group                          SBC Communications Inc
04/01/96     07/19/96     US Healthcare Inc                              Aetna Life & Casualty Co
04/02/96     08/15/96     Teledyne Inc                                   Allegheny Ludlum Corp
04/08/96     08/16/96     Cellular Communications Inc                    AirTouch Communications
04/10/96     10/15/96     Waterhouse Investor Services                   Toronto-Dominion Bank
04/17/96     07/31/96     Tucker Drilling Co Inc                         Patterson Energy Inc
04/22/96     07/10/96     StrataCom Inc                                  Cisco Systems Inc
04/22/96     06/03/96     Westcott Communications Inc                    K-III Communications Corp
04/29/96     03/27/97     Paul Revere Corp(Textron Inc)                  Provident Cos     

==================================================================================================================================
Date         Date                                                        Acquiror           
Announced    Effective    Target Name                                    Business Description
- ----------------------------------------------------------------------------------------------------------------------------------

01/05/96     07/01/96     Safety Fund Corp                               Savings and loan
01/08/96     04/30/96     Local Corp                                     Mnfr aerospace systems, prod
01/08/96     03/04/96     US Delivery Systems Inc                        Retail office supplies
01/09/96     04/30/96     Technslysis Corp                               Dvlp, whl software systems
01/18/96     07/02/96     Covita Corp                                    Manufacture pharmaceuticals
01/22/96     04/11/96     Premier Industrial Corp                        Mnfr, whl electronic components
01/24/96     08/08/96     National Lodging Corp                          Own and operate hotels
01/25/96     06/12/96     Dual Drilling (Mosrold Shippg)                 Pvd oil, gas drilling svcs
01/30/96     05/31/96     Daig Corporation                               Mnfr heart valves, x-ray equip
01/31/96     03/04/96     Tivoli Systems Inc                             Mnfr computers, office equip
02/01/96     04/12/96     Health Wise of America Inc                     Own and operate HMOs
02/05/96     04/30/96     DiMark Inc                                     Pvd direct marketing services
02/07/96     05/07/96     Pyxis Corp                                     Whl pharmaceutical products
02/12/96     05/01/96     Duracraft Corp                                 Mnfr automation, control sys
02/13/96     09/18/96     Citicasters(American Finl Grp)                 Own, op radio bdcstg stations
02/14/96     03/20/96     Helene Curtis Industries Inc                   Produce foods; holding company
02/15/96     05/14/96     Andros Inc                                     Investment firm
02/16/96     05/30/96     Circle K Corp                                  Petroleum refining
02/16/96     06/13/96     Fortum Group Inc                               Own, op hotels, restaurants
02/20/96     07/24/96     Davidson & Associates Inc                      Provide discount club svcs
02/20/96     07/24/96     Sierra On-Line Inc                             Provide discount club svcs
02/23/96     07/01/96     Cray Research Inc                              Manufacture computer systems
02/26/96     09/16/96     Sterile Concepts Inc.                          Mnfr surgical instruments
02/26/96     06/18/96     Tide West Oil Co                               Oil and gas exploration, prodn
02/27/96     05/24/96     Brandon Systems Corp                           Pvd human resource solutions
02/29/96     07/10/96     Big O Tires Inc                                Whl tires, automobile parts
03/04/96     04/08/96     Guardsman Products Inc                         Mnfr industrial finishings
03/07/96     07/03/96     Acme-Cleveland Corp                            Mnfr tools, control equipment
03/11/96     08/02/96     Life Partners Group Inc                        Insurance holding company
03/18/96     07/01/96     Athena Neurosciences Inc                       Mnfr drug delivery systems
03/18/96     08/30/96     Microtek Medical Inc                           Mnfr surgical supplies
03/25/96     07/01/96     InStant Inc                                    Mnfr medical technology prods
03/26/96     08/09/96     DeBartolo Realty Corp                          Real estate investment trust
03/28/96     08/01/96     Stop & Shop Cos                                Own, operate supermarkets
03/29/96     04/26/96     Great American Mgmt & Invt Inc                 Investment firm
03/29/96     07/08/96     Hayes Wheels International Inc                 Manufacture automotive parts
03/29/96     08/07/96     MediSense Inc                                  Mnfr pharmaceuticals, med equip  
03/29/96     09/03/96     Regional Acceptance Corp                       Bank holding company
04/01/96     04/01/97     Pacific Telesis Group                          Provide telecommun services
04/01/96     07/19/96     US Healthcare Inc                              Insurance company
04/02/96     08/15/96     Teledyne Inc                                   Mnfr specialty materials, metal
04/08/96     08/16/96     Cellular Communications Inc                    Pvd telecommunications svcs
04/10/96     10/15/96     Waterhouse Investor Services                   Bank holding company
04/17/96     07/31/96     Tucker Drilling Co Inc                         Pvd contract drilling services 
04/22/96     07/10/96     StrataCom Inc                                  Mnfr inter-networking systems
04/22/96     06/03/96     Westcott Communications Inc                    Publishing company
04/29/96     03/27/97     Paul Revere Corp(Textron Inc)                  Pvd accident, health insurance

==================================================================================================================================
Premium
Value of     Enterprise     ---------------------------------
Date         Date                                                 Transaction          Value       1 Day Prior      1 Week Prior
Announced    Effective    Target Name                                 ($ mil)        ($ mil)     to Annc. Date     to Annc. Date
- ----------------------------------------------------------------------------------------------------------------------------------

01/05/96     07/01/96     Safety Fund Corp                               28.3        206.254              3.53             10.06   
01/08/96     04/30/96     Local Corp                                   8762.4       8322.778              4.83              7.42
01/08/96     03/04/96     US Delivery Systems Inc                       428.7        456.041              9.57              8.62
01/09/96     04/30/96     Technslysis Corp                               32.6         28.793             12.00             16.67
01/18/96     07/02/96     Covita Corp                                    78.5         78.525             -2.38              2.50
01/22/96     04/11/96     Premier Industrial Corp                      2722.7       2720.926             37.17             35.75   
01/24/96     08/08/96     National Lodging Corp                          57.0         21.745             34.12             26.67
01/25/96     06/12/96     Dual Drilling (Mosrold Shippg)                224.7        325.221              8.86             13.19
01/30/96     05/31/96     Daig Corporation                              441.3        419.982             20.17             22.72
01/31/96     03/04/96     Tivoli Systems Inc                            709.8        688.025             25.83             25.00
02/01/96     04/12/96     Health Wise of America Inc                    271.1        268.539              8.35              9.07   
02/05/96     04/30/96     DiMark Inc                                    151.8        145.080              1.70              1.70
02/07/96     05/07/96     Pyxis Corp                                    907.3        870.021             53.27             60.93
02/12/96     05/01/96     Duracraft Corp                                286.7        295.828             58.18             50.00
02/13/96     09/18/96     Citicasters(American Finl Grp)                767.6        746.538              9.26             15.69
02/14/96     03/20/96     Helene Curtis Industries Inc                  737.4        882.125             18.64             30.23
02/15/96     05/14/96     Andros Inc                                     92.6         61.211             16.13             24.14
02/16/96     05/30/96     Circle K Corp                                 983.0        951.573             45.85             42.47
02/16/96     06/13/96     Fortum Group Inc                              622.3        598.837              4.00              8.33
02/20/96     07/24/96     Davidson & Associates Inc                    1145.0       1141.542             72.30             87.50
02/20/96     07/24/96     Sierra On-Line Inc                            911.0        964.417             69.33             71.70
02/23/96     07/01/96     Cray Research Inc                             770.0        776.916             18.81             21.21
02/26/96     09/16/96     Sterile Concepts Inc.                         140.2        145.644             53.85             60.00
02/26/96     06/18/96     Tide West Oil Co                              201.3        199.612             44.64             44.64
02/27/96     05/24/96     Brandon Systems Corp                          165.2        162.698             32.21             39.41
02/29/96     07/10/96     Big O Tires Inc                                56.6         69.316              5.60              7.32
03/04/96     04/08/96     Guardsman Products Inc                        227.8        247.933             32.37             32.37
03/07/96     07/03/96     Acme-Cleveland Corp                           204.4        193.807             50.00             55.84
03/11/96     08/02/96     Life Partners Group Inc                       838.8        721.523             35.48             34.40
03/18/96     07/01/96     Athena Neurosciences Inc                      601.3        477.778             20.66             16.80
03/18/96     08/30/96     Microtek Medical Inc                          108.6        104.862             37.50             40.63
03/25/96     07/01/96     InStant Inc                                   233.7        204.707              1.03              9.14
03/26/96     08/09/96     DeBartolo Realty Corp                        2962.1       2782.114             11.59             16.57
03/28/96     08/01/96     Stop & Shop Cos                              2870.8       3029.714             25.23             27.01
03/29/96     04/26/96     Great American Mgmt & Invt Inc                 63.3        746.409              2.56              4.17
03/29/96     07/08/96     Hayes Wheels International Inc                563.8        695.070             29.29             33.33
03/29/96     08/07/96     MediSense Inc                                 821.6        797.412             48.76             42.76
03/29/96     09/03/96     Regional Acceptance Corp                      160.7        261.856              9.33              6.60
04/01/96     04/01/97     Pacific Telesis Group                       16490.0      22421.022             38.70             36.24
04/01/96     07/19/96     US Healthcare Inc                            8939.0       7793.337             24.25             21.28
04/02/96     08/15/96     Teledyne Inc                                 2097.5       2442.365            113.55            115.12
04/08/96     08/16/96     Cellular Communications Inc                  1657.4       2910.441              7.45              7.84
04/10/96     10/15/96     Waterhouse Investor Services                  526.0        551.243             15.15             19.69
04/17/96     07/31/96     Tucker Drilling Co Inc                         23.3         15.863              4.68              7.13
04/22/96     07/10/96     StrataCom Inc                                4933.5       4738.078             48.39             59.72
04/22/96     06/03/96     Westcott Communications Inc                   438.9        421.637             43.33             57.80
04/29/96     03/27/97     Paul Revere Corp(Textron Inc)                1177.1       1213.109              7.22              5.58

==================================================================================================================================
Premium
----------------------------------------------------------------
Date         Date                                                 4 Weeks Prior          3 Months Prior              1 Year Prior  
Announced    Effective    Target Name                             to Annc. Date           to Annc. Date             to Annc. Date
- ------------------------------------------------------------------------------------------------------------------------------------

01/05/96     07/01/96     Safety Fund Corp                       
01/08/96     04/30/96     Local Corp                                       8.19                                                     
01/08/96     03/04/96     US Delivery Systems Inc                         32.63                   30.57                    123.01  
01/09/96     04/30/96     Technslysis Corp                                16.67                    9.80                     30.23  
01/18/96     07/02/96     Covita Corp                                     -2.38                   24.24                    148.48  
01/22/96     04/11/96     Premier Industrial Corp                         34.37                   18.63                     65.64  
01/24/96     08/08/96     National Lodging Corp                                                   46.15                     42.50  
01/25/96     06/12/96     Dual Drilling (Mosrold Shippg)                  23.66                   51.68                     72.36  
01/30/96     05/31/96     Daig Corporation                                26.77                                                    
01/31/96     03/04/96     Tivoli Systems Inc                              41.79                   49.31                            
02/01/96     04/12/96     Health Wise of America Inc                      18.63                   32.13                     15.26  
02/05/96     04/30/96     DiMark Inc                                      0.84                    16.50                     33.93   
02/07/96     05/07/96     Pyxis Corp                                      66.48                   67.93                     10.35  
02/12/96     05/01/96     Duracraft Corp                                  68.12                   82.20                     16.78  
02/13/96     09/18/96     Citicasters(American Finl Grp)                  28.26                  349.52                    337.04  
02/14/96     03/20/96     Helene Curtis Industries Inc                    71.78                                                    
02/15/96     05/14/96     Andros Inc                                      35.85                   12.50                      4.35  
02/16/96     05/30/96     Circle K Corp                                   68.82                  548.63                    830.11  
02/16/96     06/13/96     Fortum Group Inc                                44.44                                                    
02/20/96     07/24/96     Davidson & Associates Inc                       67.76                   30.12                    129.77  
02/20/96     07/24/96     Sierra On-Line Inc                              50.38                   65.51                    160.60  
02/23/96     07/01/96     Cray Research Inc                               20.60                   34.83                     83.21  
02/26/96     09/16/96     Sterile Concepts Inc.                           55.34                                                    
02/26/96     06/18/96     Tide West Oil Co                                51.52                                                    
02/27/96     05/24/96     Brandon Systems Corp                            29.77                  554.88                    758.54  
02/29/96     07/10/96     Big O Tires Inc                                 12.82                   23.36                     22.22  
03/04/96     04/08/96     Guardsman Products Inc                          57.27                                                    
03/07/96     07/03/96     Acme-Cleveland Corp                             56.86                                                    
03/11/96     08/02/96     Life Partners Group Inc                         55.56                   69.70                     -1.75  
03/18/96     07/01/96     Athena Neurosciences Inc                        40.39                   73.81                    220.88  
03/18/96     08/30/96     Microtek Medical Inc                            43.90                  129.19                    201.85  
03/25/96     07/01/96     InStant Inc                                      5.87                  228.93                             
03/26/96     08/09/96     DeBartolo Realty Corp                           25.54                   23.17                     15.54  
03/28/96     08/01/96     Stop & Shop Cos                                 45.65                                                    
03/29/96     04/26/96     Great American Mgmt & Invt Inc                   3.63                    2.04                     41.34   
03/29/96     07/08/96     Hayes Wheels International Inc                  43.02                   24.88                     62.03  
03/29/96     08/07/96     MediSense Inc                                   39.00                   42.29                    123.60  
03/29/96     09/03/96     Regional Acceptance Corp                        25.41                    9.33                      6.60  
04/01/96     04/01/97     Pacific Telesis Group                           33.88                   14.04                     27.24  
04/01/96     07/19/96     US Healthcare Inc                               18.75                   23.91                     28.81  
04/02/96     08/15/96     Teledyne Inc                                   108.97                   35.44                     39.31 
04/08/96     08/16/96     Cellular Communications Inc                      6.28                   94.69                     87.23   
04/10/96     10/15/96     Waterhouse Investor Services                    65.22                                                    
04/17/96     07/31/96     Tucker Drilling Co Inc                          10.05                   34.13                     71.68  
04/22/96     07/10/96     StrataCom Inc                                   79.69                   57.00                    192.99  
04/22/96     06/03/96     Westcott Communications Inc                     56.36                   37.05                     45.15  
04/29/96     03/27/97     Paul Revere Corp(Textron Inc)                    8.50                       

Page F-8

MERGER PREMIUMS TO MARKET VALUE ANALYSIS
MERGER WITH TARGET PRICE EQUAL TO OR GREATER THAN $10 PER SHARE
ANNOUNCED AND COMPLETED 1/1/96 - 2/3/99
(continued)
================================================================================

Date        Date
Announced   Effective   Target Name                       Target Business Description         Acquiror Name         
- --------------------------------------------------------------------------------------------------------------------------------

04/30/96    08/12/96    UUNet Technologies Inc            Internet service provider           MFS Communications Co Inc.      
05/01/96    06/28/96    Quartum Health Resources Inc      Provide home health care svcs       Olsten Corp
05/01/96    08/21/96    Uniroyal Chemical Co              Mnfr pesticides, rubber chere       Cromption & Knowles Corp
05/07/96    07/03/96    Guaranty National Corp            Insurance company                   Orion Capital Corp
05/07/96    08/14/96    Kahler Realty Corp                Real estate investment trust        Tiger Real Estate Fund LP
05/10/96    08/22/96    Cycare Systems Inc                Provide accounting services         HBO & Co
05/10/96    12/11/96    Transnational Re Corp             Property reinsurance company        PXRE Corp
05/13/96    08/15/96    MICOM Communications Corp         Mnfr communications equipment       Northern Telecom Ltd(BCE Inc)
05/14/96    09/05/96    Caremark International Inc        Pvd home health care services       MedPartners/Mullikin Inc
05/15/96    08/23/96    Davis Water & Waste Industries    Water distn and treatment prod      United States Filter Corp
05/16/96    11/15/96    A+ Network Inc                    Pvd paging services                 Metrocall Inc
05/20/96    07/23/96    AmenData Technologies Inc         Whl computer, peripherals           General Electric Capital Svcs
05/20/96    12/30/96    Continental Waste Industries      Pvd waste disposal services         Republic Industries Inc
05/20/96    10/31/96    Sterling Healthcare Group Inc     Own, op doctors' offices            FPA Medical Management Inc
05/24/96    07/02/96    Masland Corp                      Mnfr motor vehicle parts            Lear Corp
05/27/96    02/16/97    SyStemix Inc(Novartis AG)         Mnfr, dvlp cellular processes       Novartis AG
05/31/96    12/19/96    Addington Resources Inc           Bituminous coal mining              Republic Industries Inc
05/31/96    08/30/96    Image Industries Inc              Pvd plastic recyling svcs           Maxim Group Inc
06/03/96    08/05/96    Hedel Broadcasting Corp           Own, op radio bdcstg stations       Clear Channel Communications
06/03/96    09/30/96    Univar Corp                       Whl chemicals, pesticides           Pakhoed Holding NV
06/04/96    09/20/96    HomeTown Buffet Inc               Own and operate restaurants         Buffets Inc
06/06/96    10/01/96    AT&T Capital Corp(AT&T Corp)      Pvd leasing, financing services     Investor Group
06/06/96    12/18/96    Bally Entertainment Corp          Own, op casino hotels               Hilton Hotels Corp
06/06/96    07/09/96    FinishMaster Inc(Maxco Inc)       Whl automotive paint, coatings      Lacy Distribution Inc(LDI Ltd)
06/10/96    08/23/96    Orbit Semiconductor Inc           Manufacture seimiconductors         DII Group Inc
06/11/96    07/23/96    Community Health Systems Inc      Own and operate hospitals           Forstmann Little & Co
06/14/96    08/23/96    Brenco Inc                        Ball and roller bearings            Varten Corp                    
06/17/96    11/19/96    Perril DataComm Networks Inc      Mnfr data communications equip      Bay Networks Inc               
06/18/96    09/30/96    Builders Warehouse Assn Inc       Pvd LAN design services             Osicom Technologies Inc        
06/20/96    12/31/96    Infinity Broadcasting Corp        Own, op radio broadcasting strs     Westinghouse Electric Corp     
06/20/96    09/16/96    Public Storage Properties X       Pvd warehousing storage svcs        Public Storage Inc             
06/20/96    09/16/96    Public Storage Properties XII     Rent storage space                  Public Storage Inc             
06/24/96    09/03/96    Sanifill Inc                      Provide waste management svcs       USA Waste Services Inc         
06/28/96    10/02/96    National Re Corp                  Fire, casualty insurance co         General Re Corp                
06/28/96    09/27/96    Salem Corp                        Whl industrial mach and equip       Investor Group                 
07/01/96    10/04/96    Landmark Graphics Corp            Dvlp CAE sys for geoscientists      Halliburton Co                 
07/01/96    03/25/97    Renaissance Commun Corp           Own and operate TV stations         Tribune Co                     
07/02/96    08/08/96    Ambar Inc                         Pvd oil and gas field services      Beacon Group Energy Investment 
07/17/96    01/22/97    New World Commun GP(Ma(co)        Operate television stations         News Corp Ltd                  
07/19/96    07/01/97    Portland General Corp             Electric utility holding co         Enron Corp                     
07/19/96    08/27/97    Rexore Corp                       Mnfr petrochemical products         Huntsman Corp                  
07/22/96    10/03/96    Global Natural Resources Inc      Oil and gas exploration prodn       Seagull Energy Corp            
07/22/96    10/25/96    Telebil Corp                      Mnfr data transmission equip        Cisco Systems Inc              
07/22/96    07/29/97    United Cities Gas Co              Gas utility                         Atinos Energy Corp             
07/23/96    02/19/97    Osbom Communications Corp         Own, op radio and TV stations       Capstar Broadcasting Partners  
07/24/96    10/11/96    PCI Services Inc                  Pvd product packaging services      Cardinal Health Inc            
08/02/96    11/29/96    First Colony Corp                 Insurance holding company           General Electric Capital Corp   
08/05/96    04/07/97    EZ Communications Inc             Own, operate radio stations         American Radio Systems Corp

Premium
-------------------------------------------------------------------------
Value of   Enterprise
Date        Date         Acquiror                       Transaction        Value      1 Day Prior    1 Week Prior   4 Weeks Prior
Announced   Effective    Business Description               ($ mil)      ($ mil)    to Annc. Date   To Annc. Date   To Annc. Date 
- ---------------------------------------------------------------------------------------------------------------------------------

04/30/96    08/12/96     Pvd telephone communs svcs          2060.9     2037.023            27.59           39.91          125.91
05/01/96    08/28/96     Pvd temporary personel svcs          270.2      301.169            23.65           29.32           60.18
05/01/96    08/21/96     Mnfr chemicals, dyes, flavors       1463.4     1326.163            27.66           44.58           55.84
05/07/96    07/03/96     Insurance company, holding co         85.1      361.073            15.63           15.63           22.31
05/07/96    08/14/96     Real estate investment trust         222.7      212.811             9.68           13.33            9.68
05/10/96    08/22/96     Dvlp healthcare software             277.1      252.048             6.33            8.99           61.02 
05/10/96    12/11/96     Reinsurance company                  133.1      165.348            12.47           16.52            8.70
05/13/96    08/15/96     Mnfr telecommunications equip        138.3      144.308           -14.29            9.09           58.35
05/14/96    09/05/96     Pvd management health svcs          2707.8     3139.099             9.95           16.00           18.17
05/15/96    08/23/96     Mnfr water treatment equip           100.8      109.499            36.18           59.03           62.30
05/15/96    11/15/96     Pvd local paging services            345.4      342.749            36.13           40.67           63.88
05/20/96    07/23/96     Pvd financing services               454.8      734.654             4.07           25.49           47.13
05/20/96    12/30/96     Provide waste disposal svcs          354.4      360.348            66.73           62.18           82.04
05/20/96    10/31/96     Pvd health care mgmt services        157.5      172.338            -3.07            3.67           13.09
05/24/96    07/??/96     Mnfr automobile seats                413.5      444.870             6.12           18.18           30.00
05/27/96    02/16/97     Manufacture pharmaceuticals          107.6      401.596             4.70           69.57           59.18
05/31/96    12/19/96     Provide waste disposal svcs          317.8      358.730            24.88           43.93           50.30
05/31/96    08/30/96     Own, op floor covering fran          105.1      152.440            17.00           15.84           23.16
06/03/96    08/05/96     Own, op TV, radio station            315.3      370.095             2.22            4.55            2.22
06/03/96    09/30/96     Pvd freight transp services          331.8      605.298            57.17           54.06           58.78
06/04/96    09/20/96     Own and operate restaurants          174.0      195.943            -3.27            7.38            2.67
06/06/96    10/01/96     Investor group                      2128.6     9188.700            37.41           38.46           42.29
06/06/96    12/18/96     Own, operate hotels                 3138.1     3108.891            59.03           74.81           72.18
06/06/96    07/09/96     Whl industrial machinery equip        62.6      111.128            30.42           27.76           42.27
06/10/96    08/23/96     Mnfr electronic components           118.3      105.053            37.78           36.10           57.18
06/11/96    07/23/96     Investment company                  1080.0     1267.498            20.23           19.89           18.86
06/14/96    08/23/96     Mnfr customtubular products          161.4      164.889            30.96           30.30           20.56
06/14/96    11/19/96     Mnfr, whl data networking prods      117.6      124.136             7.50            2.99            6.17
06/18/96    09/30/96     Mnfr communications equipment         69.3       73.342             9.67           15.95           35.32
06/20/96    12/31/96     Mnfr elec defense electri equip     4737.8     4153.297            12.76           10.82           15.27
06/20/96    09/16/96     Real estate investment trust          50.2       39.475            13.85           13.08           10.83
06/20/96    09/16/96     Real estate investment trust          55.2       37.663            14.56           14.56           15.30
06/24/96    09/03/96     Pvd waste disposal services         1236.9     1604.447            -1.02            3.86            1.63
06/28/96    10/02/96     Insurance holding company            904.6     1110.321            45.21           65.63           60.61
06/28/96    09/27/96     Investor group                        46.6       31.813            21.96           23.46           11.73
07/01/96    10/04/96     Mnfr oil field machinery             586.7      531.762            65.51           77.00           68.80
07/01/96    03/25/97     Publish newspaper, cable TV sys     1094.4     1118.676            11.63           19.01           20.50
07/02/96    08/08/96     Investment firm                       66.6       81.363            24.14           17.07           50.00
07/17/96    01/22/97     Publish newspapers, magazines       2173.0     4241.936            67.66           71.63           60.15
07/19/96    07/01/97     Own, operate gas pipelines          2901.7     2982.291            23.13           21.54           19.48
07/19/96    08/27/97     Mnfr petrochemicals                  606.8      494.486            75.34           60.00           56.10
07/22/96    10/03/96     Own, op gas pipelines                525.6      526.491            11.23           13.04           13.04
07/22/96    10/25/96     Mnfr inter-networking systems        196.3      196.203            22.76           22.76            4.71
07/22/96    07/29/97     Natural gas distribution svcs        496.5      508.192            52.21           64.29           69.67
07/23/96    02/19/97     Own, operate radio stations           89.9      110.806            28.13           50.00           38.20
07/24/96    10/11/96     Whl pharmaceutical products          208.0      209.588            44.00           42.89           23.84
08/02/96    11/29/96     Pvd consumer financing svcs         1799.2     2011.939            37.71           32.66           39.04
08/05/96    04/07/97     Own, op radio bdcstg station         687.3      623.194            45.54           56.36           89.20 

- --------------------------------------------------------
Date        Date        3 Months Prior      1 Year Prior
Announced   Effective    to Annc. Date     to Annc. Date
- --------------------------------------------------------

04/30/96    08/12/96             58.86
05/01/96    08/28/96             54.90              9.27
05/01/96    08/21/96             64.38             25.00
05/07/96    07/03/96             26.50             12.98
05/07/96    08/14/96             46.24             88.89
05/10/96    08/22/96             79.49            101.69
05/10/96    12/11/96              0.81             22.75
05/13/96    08/15/96             57.38             74.55
05/14/96    09/05/96             25.81             81.93
05/15/96    08/23/96            111.57            207.74
05/15/96    11/15/96             72.24             53.45
05/20/96    07/23/96             62.03            109.84
05/20/96    12/30/96            117.56            223.19
05/20/96    10/31/96            
05/24/96    07/??/96             77.78             84.07
05/27/96    02/16/97             39.29             59.18
05/31/96    12/19/96             69.84             58.73
05/31/96    08/30/96             
06/03/96    08/05/96            162.86            253.85
06/03/96    09/30/96             80.93             55.60
06/04/96    09/20/96             25.85             20.66
06/06/96    10/01/96             
06/06/96    12/18/96             81.78            175.95
06/06/96    07/09/96             42.27              9.82
06/10/96    08/23/96             69.09            -22.50
06/11/96    07/23/96             22.35             49.64
06/14/96    08/23/96             34.42             30.67
06/14/96    11/19/96             
06/18/96    09/30/96             37.08            370.00
06/20/96    12/31/96         
06/20/96    09/16/96              5.26             20.40
06/20/96    09/16/96             15.30             27.66
06/24/96    09/03/96             26.37             55.38
06/28/96    10/02/96             57.04             60.61
06/28/96    09/27/96             30.72            -11.50
07/01/96    10/04/96             93.09             24.94
07/01/96    03/25/97            423.64            150.43
07/02/96    08/08/96             73.49            311.43
07/17/96    01/22/97             49.06             28.53
07/19/96    07/01/97             23.68             58.43
07/19/96    08/27/97             19.63             16.36
07/22/96    10/03/96             17.83             73.80
07/22/96    10/25/96            101.51            196.67
07/22/96    07/29/97             56.85             69.70
07/23/96    02/19/97             44.75            108.54
07/24/96    10/11/96             16.10            158.00
08/02/96    11/29/96             41.07             45.33
08/05/96    04/07/97            142.56            162.78

Page F-9

Merger Premiums to Market Value Analysis
Mergers with Target Price Equal to or Greater than $10 per Share
Announced and Completed 1/1/96-2/3/99
(continued)

====================================================================================================================================

Date       Date 
Announced  Effective   Target Name                      Target Business Description       Acquiror Name
- ------------------------------------------------------------------------------------------------------------------------------------

08/05/96   02/14/97    FHP International Corp           Own and operate HMOs              PacifCare Health Systems Inc.   
08/07/96   10/03/96    Douglas & Lorrason Co            Wholesale motor vehicles          Magna International Inc         
08/08/96   09/17/96    Roto-Rooter Inc (Chemed Corp)    Provide plumbing services, prod   Chemed Corp
08/09/96   08/06/97    NorAmEnergy Corp                 Oil and gas exploration, prodn    Houston Industries Inc
08/12/96   03/02/98    Atlantic Energy (Conoco)         Public utility holding co         Delmarva Power & Light
08/14/96   11/25/96    American Re Corp                 Property, casualty insurance co   Muenchener Ruedeversicherungs
08/14/96   11/07/96    Payco American Corp              Credit collection services        OSI Holdings Corp
08/14/96   10/24/96    Redman Industries Inc            Manufacture mobile homes          Champion Enterprises Inc
08/15/96   09/26/96    Orchard Supply Hardware Stores   Own, op home improvement ctrs     Sears Roebuck & Co
08/19/96   09/20/96    CasTech Aluminum Group Inc       Mnfr aluminum sheets              Commonwealth Aluminum Corp
08/19/96   12/16/96    Griffin Gaming & Equipment       Own, op gaming facilities         Sun International Hotels Ltd
08/22/96   10/29/96    Meta Software Inc                Develop software                  Avanti Corp
08/26/96   12/17/96    American Travellers Corp         Insurance company                 Conseco Inc
08/26/96   12/31/96    Bankers Life Holdings (Conseco)  Life ins co; holding company      Conseco Inc
08/26/96   03/04/97    Capitol American Financial       Pvd accident, life ins svcs       Conseco Inc
08/26/96   11/14/96    Career Horizons Inc              Pvd temporary personnel svcs      AccuStaff Inc
08/26/96   12/31/96    MFS Communications Co Inc        Pvd telephone communs svcs        WorldCom Inc
08/26/96   01/09/97    Spreckels Industries Inc         Produce sugar, mfr indust prod    Columbus McKinnon Corp
08/29/96   11/08/96    Red Lions Hotels (Red Lion Inn)  Own, op hotels                    Doubletree Corp
09/02/96   03/06/97    Arcadian Corp                    Mnfr phospatic fertilizers        Potash Corp of Saskatchewan
09/09/96   12/23/96    Big B Inc (Revco DS Inc)         Drug, grocery retail stores       Revco DS Inc
09/12/96   12/31/96    Duracell International Inc       Manufacture alkaline batteries    Gillette Co
09/23/96   12/04/96    Diamond Shamrock Inc             Mnfr, wholesale petroleum         Ultramer Corp
09/24/96   12/09/96    GMS Inc                          Develop software                  HBO & Co
09/26/96   02/28/97    Providence Journal Co            Own, op TV broadcasting stns      AH Belo Corp
09/26/96   12/23/96    Transport Holdings               Insurance holding company         Conseco Inc
09/30/96   09/27/97    Belden & Blake Corp              Oil and gas exploration, prodn    Texas Pacific Group Inc
10/01/96   12/31/96    South West Property Trust Inc    Real estate investment trust      United Dominion Realty Tr Inc
10/02/96   02/03/97    Baby Superstore Inc              Own, op children's wear stores    Toys R' Us Inc
10/03/96   02/07/97    TSX Corporation                  Mnfr communications equipment     ANTEC Corp
10/03/96   02/13/97    Kinder-Care Learning Centers     Operate day care centers          Kohlberg Kravis Roberts & Co
10/03/96   12/31/96    LXE (Electromagnetic Sciences)   Mnfr microwave components         Electromagnetic Sciences Inc
10/07/96   12/11/96    Augst Inc                        Mnfr electr, hardware prods       Thomas & Betts Corp
10/07/96   12/02/96    Cheyenne Software Inc            Develop computer software         Computer Associates Intl Inc
10/08/96   11/22/96    Super Food Services Inc          Wholesale food products           Nash Finch Co
10/10/96   01/31/97    Gelman Sciences Inc              Mnfr medical filter devices       Pall Corp
10/14/96   06/26/98    Pacific Enterprises Inc          Natural gas utility               Envos Corp (Sempra Energy)
10/14/96   12/12/96    Thrifty Payless Holdings Inc     Own, op drug store chain          Rite Aid Corp
10/15/96   06/03/97    Conrail Inc                      Own, op freight railroad lines    Investor Group
10/15/96   12/23/96    FlightSafety International       Mnfr flight simulators            Berkshire Hathaway Inc
10/17/96   01/30/97    O'nds HealthCorp                 Own, operate hospitals            Tenet Healthcare Corp
10/21/96   03/31/97    Detroit & Canada Tunnel Corp     Pvd tunnel operation services     Investor Group
10/23/96   04/16/97    Syratech Corp                    Manufacture silver flatware       Thomas H. Lee Equity Fund III
10/28/96   05/07/97    Cooper & Chyan Technology Inc    Develop software                  Cadence Design Systems Inc
10/28/96   01/15/97    Loctite Corp                     Mnfr adhesives & sealants         Henkel KGaA
10/29/96   05/29/97    Wireless Cable of Atlanta        Pvd wireless cable communs svc    BellSouth Corp

Premium
-------------------------------------------------------------------
1 Day        1 Week        4 Weeks        3 Months        1 Year
Value of         Enterprise      Prior          Prior         Prior          Prior          Prior
Acquiror                          Transaction      Value         to Annc.       to Annc.      to Annc.       to Annc.       to Annc.
Business Description              ($ mil)          ($ mil)         Date           Date          Date           Date           Date
- ------------------------------------------------------------------------------------------------------------------------------------

Own and operate HMO's              2000.1          2,161,889       19.37         27.37          19.10           24.96          41.20
Mnfr auto parts, accessories        134.6            213,954       39.33         90.77         103.28          125.45         121.43
Mnfr chems janitorial equip          93.6            220,326       12.33         12.33          11.19           20.15          25.19
Electric utility holding co        3648.8          3,750,590       35.72         46.52          41.69           48.23         143.32
Electric and gas utility            951.1          2,155,874        5.34          3.83           3.09            5.34          -0.47
Provide reinsurance services       3967.8          3,830,429       26.21         41.69          44.04           49.86          79.93
Investment holding firm             161.9            154,646       19.15         17.90          60.00           64.71          77.78
Mnfr single-family houses           341.9            391,852        6.29         11.71          26.39           21.73         102.26
Department stores, fnl svcs         423.7            412,744       17.65         25.56          28.44            8.95         137.29
Manufacture aluminum prods          328.7            322,740       37.82         57.69          45.13           41.38           3.14
Own, operate hotels                 309.6            345,195       88.88         88.88          69.28           52.07          52.07
Develop software                    139.3            136,900       18.00          0.48           1.48          -27.49
Insurance holding company           868.3            968,714       30.09         37.35          81.17           61.36         230.54
Insurance holding company           120.8          1,534,747       14.94         10.50          11.73           25.79          31.58
Insurance holding company           715.5            695,104       50.84         51.60          56.31           53.14          65.76
Provide staffing services          1010.3            835,758       34.40         33.88          63.98          147.63         145.64
Pvd telecommunication svcs        13595.7         14,885,504       58.82         59.96          86.96           66.27         142.14
Mnfr industrial chains, hoists      259.4            248,369       23.87         24.68          29.73           45.45         178.26
Own, operate hotel mgt co          1174.1          1,129,012       28.60         33.55          31.38 
Manufacture potash                 1723.3          1,424,486       24.66         20.99          26.96           30.18          36.21
Own, operate drug stores            335.4            401.153       36.63         66.27          58.62           68.29          10.40
Mnfr shaving razors and blades     7231.9          7,764,776       19.84         29.75          30.11           33.80          37.31
Mnfr refined petroleum prods        860.9          1,807,572       -3.90          1.11           5.71            0.68          15.70
Dvlp healthcare software            242.6            235,095       56.35         57.50          86.26          125.52          64.80
Newspapers, radio, TV stations     1429.6          1,617,143       58.38         64.43          65.49          109.89
Insurance holding company           299.9            242,623       25.80         35.27          32.18           41.52
Investment holding company          405.7            404,194       32.52         27.81          31.71           21.35          42.11
Real estate investment trust        547.8            526,405        9.31          9.31          13.39           12.37          18.98
Own, op retail toy stores           382.2            501,916       17.99         21.82          25.07           43.21         -46.86
Mnfr commun network products        254.3            214,629       10.00         18.63          26.04          -22.41           3.16
Leverage buyout firm                571.0            510,009       17.83         18.75          26.67           22.58          34.51
Mnfr microwave components            14.8             81,560       22.09         14.13          19.32           23.58          28.10
Mnfr electronic connectors          570.1            611,782       32.83         30.49          45.94           54.06          49.89
Develop applications software      1247.6          1,199,601       32.61         34.81          30.48
Wholesale groceries                 164.2            262,843       37.78         36.26          29.17           51.22          26.53
Mnfr filters, separations equip     297.7            292,223       80.47         57.91          49.42           65.43          58.81
Electric and gas utility           2870.0          4,159,400        7.43          8.72          11.87
Own, operate drug stores           2394.0          2,367,729       26.91         28.65          37.18           62.23
Investor group                    10435.9         12,532,430       61.97         60.28          60.28           74.24          61.40
Property, casualty insurance co    1518.1          1,555,157       13.96         10.80          10.80
Own, op hospitals                  3123.4          2,875,478        9.61         19.48          16.56           40.56          57.21
Investor group                       36.5             33,327       64.89         74.19          54.29           64.89         110.73
Pvd fund mgmt svcs                  304.4            335,621       21.19         28.00          29.29           31.28          62.03
Develop CAD software                474.8            452,041        2.54          1.73          31.84           63.54
Mnfr, whl chemicals, detergents    1289.1          2,118,282       31.89         36.70          34.81           41.86          33.33
Pvd telecommunication svcs           44.7             37,948       89.88         80.83          80.83           20.57          83.04

MERGER PREMIUMS TO MARKET VALUE ANALYSIS
MERGERS WITH TARGET PRICE EQUAL TO OR GREATER THAN $10 PER SHARE
ANNOUNCED AND COMPLETED 1/1/96-2/3/99
(continued)
================================================================================

DATE       DATE                                                                                             ACQUIROR
ANNOUNCED  EFFECTIVE  TARGET NAME                TARGET BUSINESS DESCRIPTION   ACQUIROR NAME                BUSINESS DESCRIPTION
- -----------------------------------------------------------------------------------------------------------------------------------

10/30/96   04/08/97  Vons Cos Inc                Own and operate supermarkets Safeway Inc                   Own, op grocery store  
10/31/96   07/01/97  California Jockey Club/Bay  Own, op horse racing tracks  Patriot American Hospitality  Real estate investment
trust  
10/31/96   12/18/96  Kash N' Karry Food Stores   Own and operate supermarkets Food Lion Inc.                Own and operate super-
Inc                                                                                    markets
11/04/96   02/27/97  Eckend Corp                 Operate retail drug stores   JC Penney Co                  Department stores  
11/11/96   04/30/97  PHH Corp                    Pvd auto, truck leasing svcs HFS Inc                       Own, op hotel franchises
11/12/96   06/12/97  Leslie's Poolmart           Own, op swimming pool stores Investor Group                Investor group
11/12/96   02/27/97  SQA Inc                     Whl software                 Rational Software Corp        Dvlp component-based
software
11/13/96   01/20/97  Medex Inc                   Mnfr drug infusion products  FCY Inc                       Mnfr engineered polymer
prods
11/18/96   01/02/97  Sudbury Inc                 Mnfr automotive parts        Internet Corp                 Ductile, gray iron cast-
ings
11/25/96   01/09/97  Opal Inc                    Mnfr special industry equip  Applied Materials Inc         Mnfr wafer fabrication
systems
11/25/96   06/18/97  PanEnergy Corp              Oil and gas exploration      Duke Power Co                 Electric utility
prodn                        
11/26/96   12/30/96  Amor All Products           Mnfr cleaners and waves      Clorox Co                     Manufacture household
(McKesson)                                                                             bleach
11/27/96   03/27/97  Central Tractor Farm &      Own, op tractor hardware     JW Childs Equity Partners     Investment company 
Country                     stores                       LP                       
11/27/96   12/27/96  Central Tractor Farm &      Own, op tractor hardware     JW Childs Equity Partners     Investment company 
Country                     stores                       LP                       
11/27/96   01/16/97  Milgray Electronics Inc    Whl electric equip            Bell Industries Inc           Mnfr electronic computer
prods
11/27/96   03/19/97  Owen Healthcare Inc        Wholesale pharmaceuticals     Cardinal Health Inc           Whl pharmaceutical prod-
ucts
11/29/96   04/30/97  Chicago Dock and Canal     Real estate investment trust  CityFront Center LLC          Real estate investment
Trust                                                                                  trust
11/29/96   01/06/97  ElectroStar Inc            Mnfr printed circuit boards   Tyco International Ltd        Mnfr fire protection
systems
12/02/96   01/30/97  Eastbay Inc                Own, operate mail order bus   Venator Group Inc             Own, op variety stores
12/02/96   03/03/97  Health Images Inc          Provide magnetic imaging svcs HealthSouth Corp              Own, op outpatient 
surgery ctr
12/05/96   02/26/97  Barefoot Inc               Provide lawn care services    ServiceMaster LP              Pvd mgnt svcs    
12/05/96   03/27/97  Cavco Industries Inc       Mnfr mobile homes             Centex Corp                   Construct bldgs, RE 
dvlp firm
12/05/96   04/11/97  Public Storage Properties  Real estate investment        Public Storage Inc            Real estate investment
XIV                        trust                                                       trust                  
12/05/96   04/11/97  Public Storage Properties  Real estate investment        Public Storage Inc            Real estate investment
XV                         trust                                                       trust                  
12/05/96   05/05/97  Santa Fe Pacific Gold      Gold mining co                Newmont Mining Corp           Gold, coal mining oil,
Corp                                                                                   gas expl 
12/05/96   01/10/97  Zycon Corp                 Mnfr printed circuit          Hadco Corp                    Mnfr computer circuit
boards                                                      boards
12/11/96   02/21/97  Alexander & Alexander      Pvd insurance brokerage svcs  Aon Corp                      Insurance holding 
Services                                                                               company
12/16/96   01/27/97  Eljer Industries Inc       Manufacture plumbing fixtures Zum Industries Inc            Mnfr environmental
equipment
12/16/96   04/16/97  Paragon Group Inc          Real estate investment trust  Camden Property Trust         Real estate investment
trust
12/16/96   05/30/97  Pioneer Financial          Life, health, accident ins    Conseco Inc                   Insurance holding 
Services                   svcs                                                        company
12/16/96   01/27/97  Tylan General Inc          Mnfr gas measure equipment    Millipore Corp                Mnfr analytical prod-
ucts
12/17/96   08/01/97  McDonnell Douglas          Mnfr aerospace, defense       Boeing Co                     Mnfr aircraft, aero-
Corp                       equip                                                       space equip
12/19/96   03/25/97  IWC Resources Corp         Water utility holding         NIPSCO Industries Inc         Electric, gas utility 
company                                                     hldg co               
12/30/96   05/29/98  LILCO                      Electric utility              Brooklyn Union Gas Co         Gas utility
01/07/97   02/25/97  American Medical           Provide ambulance services    Medi/Trans Inc (Laidlaw       Pvd ambulance svcs
Response Inc                                             Inc)
01/07/97   02/10/97  Bonray Drilling Corp       On-shore oil and gas          DLB Oil & Gas Inc             Oil and gas exploration 
drilling                                                    prodn
01/13/97   04/25/97  OpenVision Technologies    Mnfr software, pvd pro-       Veritas Software Corp         Dvlp bus applications
Inc                        gramming                                                    software
01/13/97   09/02/97  Zurich Reinsurance Centre  Insurance agency              Zurich Versicherungs GmbH     Insurance holding com-
pany
01/14/97   04/01/97  Oxford Resources Corp      Pvd passenger car leasing     Barnett Banks, Jacksonville,  Commerical bank
svcs                          FL
01/14/97   04/30/97  Tencor Instruments Inc     Mnfr test instruments         KLA Instruments Corp          Mnfr measuring devices
01/15/97   08/06/97  Value Health Inc           Provide health plan services  Columbia/HCA Healthcare Corp  Own, operate hospitals
01/16/97   02/28/97  Epic Design Technology     Develop CAD software          Synopsys Inc                  Develop automation   
Inc                                                                                    software
01/16/97   05/30/97  Wellsford Residential      Real estate investment        Equity Residential Pptys      Real estate investment
Ppty                       trust                         Trust                         trust
01/17/97   06/17/97  Avenco Corp                Fire, marine, casaulty ins    HCC Insurance Holdings Inc    Provide insurance 
co                                                          services
01/17/97   04/11/97  Studio Plus Hotels Inc     Own, operate hotels, motels   Extended Stay America Inc     Own, op hotels
01/20/97   06/27/97  First USA Inc              Pvd credit card svcs          BANC ONE Corp, Columbus, Ohio Bank holding company 

VALUE OF    ENTERPRISES                                           PREMIUM
----------------------------------------------------------------------------
DATE       DATE        TRANSACTION          VALUE      1 DAY PRIOR    1 WEEK PRIOR   4 WEEKS PRIOR  3 MONTHS PRIOR  1 YEAR PRIOR  
ANNOUNCED  EFFECTIVE       ($ MIL)         ($MIL)    TO ANNC. DATE   TO ANNC. DATE   TO ANNC. DATE   TO ANNC. DATE  TO ANNC DATE   
- --------------------------------------------------------------------------------------------------------------------------------

10/30/96   04/08/97      2251.6        3092.969          26.80            21.52         25.71            32.96         115.49     
10/31/96   07/01/97       199.7         185.790          87.23            88.57        103.08           268.67         300.61
10/31/96   12/18/96       347.1         342.271           9.47            33.33          6.67            -7.96          13.66      
11/04/96   02/27/97      3298.5        3216.527          21.21            28.44         29.63            56.42          67.66
11/11/96   04/30/97      1809.5        6273.958          60.98            65.00         69.23            83.33         120.00
11/12/96   06/12/97       112.8         124.193          26.09            31.82         31.82            13.73           5.45 
11/12/96   02/27/97       315.8         273.700          39.44            28.23         39.44            73.06  
11/13/96   01/20/97       150.6         147.438          54.10            57.98         66.74           106.59         123.81
11/18/96   01/02/97       155.4         145.122          19.05            25.00          9.89            14.94          53.85  
11/25/96   01/09/97       189.6         146.567          52.58            64.44        105.56            23.33         270.00    
11/25/96   06/18/97      7666.8        9955.409          18.34            22.70         30.29            48.15          80.18   
11/26/96   12/30/96       410.1         355.099           9.09            13.97         13.97            27.27           4.60   
11/27/96   03/27/97        56.7         172.740          17.53            17.53         18.75            42.50          67.65  
11/27/96   12/27/96        81.0         166.959          15.46            15.46         16.67            40.00          64.71
11/27/96   01/16/97       100.0         135.176           8.40            16.99         20.57
11/27/96   03/19/97       544.1         481.667          64.89           100.86         87.25
11/29/96   04/30/97       177.9         176.494          22.32            22.70         22.70            68.07         150.00
11/29/96   01/06/97       111.0         119.210           7.69            27.27         16.67            40.00
12/02/96   01/30/97       146.0         142.812          26.32            28.00         23.08
12/02/96   03/03/97       263.7         259.674           7.39            27.85         34.24            57.93         116.52
12/05/96   02/26/97       230.9         246.105          25.49            28.00         42.22            60.00          31.96
12/05/96   03/27/97        76.2         104.851          13.23            20.23         30.49            39.87         130.11
12/05/96   04/11/97        82.4          56.913          29.19            30.82         31.65            32.48          49.64
12/05/96   04/11/97        79.1          54.218          29.19            28.40         32.48            34.19          46.48
12/05/96   05/05/97      2505.5        2862.135          59.75            66.77         63.18            45.92          50.26
12/05/96   01/10/97       211.7         240.896          12.50            46.94         94.60           105.71          39.81
12/11/96   02/21/97      1227.4        1131.321           6.06             8.53          9.38             8.53         -16.67
12/16/96   01/27/97       175.6         254.314          77.78            84.62         90.10           140.00         146.15
12/16/96   04/16/97       624.8         619.148           9.71            12.25         14.00            19.61           7.29
12/16/96   05/30/97       564.0         531.203          47.37            50.34         63.50  
12/16/96   01/27/97       147.7         150.717          39.13            26.73         26.73            16.36          13.27 
12/17/96   08/01/97     13359.0       15830.056           0.62            22.71         20.08            22.41          41.33 
12/19/96   03/25/97       290.6         418.564          31.96            39.13         45.46            64.10          64.10   
12/30/97   05/29/98      4725.5        8325.506          32.28            33.14         28.96            49.66          56.52
01/07/97   02/25/97      1011.1        1179.050          21.21            23.08         36.75
01/07/97   02/10/97        12.7          13.609          11.11            11.11         30.44           105.13         179.07 
01/13/97   04/25/97       365.7         355.210          43.67            46.46         50.86            46.49
01/13/97   09/03/97       319.0         932.988          17.07            18.52         11.63            18.03          20.50  
01/14/97   04/01/97       561.0        2075.950          10.03            23.53         28.05            52.37          76.86
01/14/97   04/30/97      1343.6        1268.039          33.06            42.22         70.21           113.33         109.15   
01/15/97   08/06/97      1132.3        1007.303           1.24             0.61                          17.14         -22.64
01/16/97   02/28/97       455.4         435.639          -0.60             8.52         23.63            30.09          23.01 
01/16/97   05/30/97       995.5         792.153           7.58             9.21          9.77 
01/17/97   06/17/97       246.8         295.317          47.74            55.78         89.26            80.35          86.21 
01/17/97   04/11/97       295.9         261.224          54.96            51.12         37.48            28.79          40.68
01/20/97   06/27/97      7304.3        7972.547          43.16            53.05         50.85            80.64         126.89

Page F-11

MERGER PREMIUMS TO MARKET VALUE ANALYSIS
MERGERS WITH TARGET PRICE EQUAL TO OR GREATER THAN $10 PER SHARE
Announced and Completed 1/1/96 - 2/3/99
(continued)
================================================================================

DATE      DATE                            
ANNOUNCED EFFECTIVE TARGET NAME                        TARGET BUSINESS DESCRIPTION        ACQUIROR NAME
- ----------------------------------------------------------------------------------------------------------------------------

01/20/97  04/08/97  Target Therapeutic Inc             Mnfr, whl mini-surgical devices    Boston Scientific Corp
01/21/97  06/26/97  InPhyNet Medical Management        Pvd physician management svcs      MedPartners Inc
01/21/97  07/09/97  Mafco Consolidated Grp (Mafco)     Mnfr cosmetics, beauty products    Mafco Holdings Inc
01/22/97  03/05/97  Norand Corp                        Mnfr electronic info systems       Western Atlas Inc
01/23/97  05/19/97  Amphenol Corp                      Manufactures connectors            Kohlberg Kravis Roberts & Co
01/23/97  06/02/98  ESELCO Inc                         Electric utility                   Wisconsin Energy Corp
01/27/97  03/07/97  Measures Corp                      Mnfr process control systems       Honeywell Inc
01/27/97  06/30/97  Revco DS Inc                       Own, operate drug stores           CVS Corp
02/03/97  03/10/97  Kysor Industrial Corp              Manfr vehicle components           Scotsman Industries Inc
02/05/97  05/31/97  Morgan Stanley Group Inc           Investment bank                    Dean Witter Discover & Co
02/10/97  03/31/97  TheraTx Inc                        Own, op nursing care facilities    Vencor Inc
02/11/97  06/13/97  AMISYS Managed Care Systems        Pvd integrated systems svcs        HBO & Co
02/13/97  05/20/97  Reflectone Inc                     Manufacture flight simulators      British Aerospace Holdings
02/13/97  06/17/97  USLIFE Corp                        Life insurance company             American General Corp
02/14/97  10/29/97  Horizon/CMS Healthcare Corp        Pvd nursing care services          HealthSouth Corp
02/14/97  09/17/97  UNC Inc                            Mnfr aircraft components           Greenwich Air Services Inc
02/14/97  06/25/97  Winthrop Resources Corp            Provide computer leasing svcs      TCF Finl Corp Minneapolis, MN
02/18/97  06/27/97  Destec Energy Inc                  Electric utility                   NGC Corp
02/20/97  12/09/97  NHP Inc (Apartment Investment)     Own, op apartment buildings        Apartment Investment & Mgmt Co
02/24/97  07/01/97  Security-Connecticut Corp          Insurance holding company          ReliaStar Financial Corp, MN
02/25/97  08/05/98  Fina Inc                           Mnfr petroleum refined prods       Petrofina SA
02/26/97  07/02/97  Petrolite Corp                     Mnfr fuel additives, waxes         Baker Hughes Inc
02/26/97  06/12/97  US Robotics Corp                   Mnfr common products, systems      3 Com Corp
02/27/97  06/13/97  Production Operators Corp          Provide oil an gas field svcs      Camco International Inc
02/28/97  08/01/97  Healthsource Inc                   Own and operate HMO's              CIGNA Corp
03/03/97  05/30/97  BHC Financial Inc                  Provide date processing svcs       Flsav Inc
03/07/97  08/01/97  Micro Bio-Medics Inc               Whl, mnfr medical group            Herry Schein Inc
03/10/97  09/02/97  Greenwich Air Services Inc         Manufacture aircraft engines       General Electric Co
03/14/97  06/26/97  Enterprise Systems Inc             Develop hospital mgmt software     HBO & Co
03/17/97  08/20/97  Heritage Media Corp                Own, op radio and TV stations      News Corp Ltd
03/19/97  07/11/97  American List Corp                 Pvd mail advertising svcs          Synder Communications Inc
03/20/97  06/17/97  Falcon Building Products Inc       Manufacture air compressors        InvestCorp
03/24/97  04/28/97  MDL Information Systems            Pvd scientific info svcs           Elsevier Science
03/24/97  08/05/97  OnTrak Systems Inc                 Mnfrs semiconductor cap equip      Lam Research Corp
03/25/97  05/07/97  Foodbrands America Inc             Produce sausages, prepared meat    IBP Inc (Occidental Petroleum)
03/25/97  07/10/97  Phamis Inc                         Pvd integrated systems design      IDX Systems Corp
03/26/97  09/03/97  Argyle Television Inc              Own, op television stations        Hearst Broadcasting Group
03/31/97  06/30/97  Cascade Communications Corp        Mnfr frame relays                  Ascend Communications Inc
04/07/97  09/02/97  Alek Brown Inc                     Securities brokerage firm          Bankers Trust New York Corp
04/07/97  07/30/97  Pure Atria Corp                    Dvlp custom computer programs      Rational Software Corp
04/08/97  06/12/97  Premiere Radio Networks Inc        Own, op radio bdcstg stations      Jacor Communications Inc
04/09/97  06/24/97  Public Storage Properties XVI      Real estate investment trust       Public Storage Inc
04/09/97  06/24/97  Public Storage Ppties XVIII        Real estate investment trust       Public Storage Inc
04/09/97  06/24/97  Public Storage Properties XIX      Real estate investment trust       Public Storage Inc
04/09/97  05/13/97  Stan Corp                          Mnfr, whl automotive parts         Tomkins PLC

========================================================================================================================

VALUE OF  ENTERPRISE                            PREMIUM
----------------------------------------------
DATE      ACQUIROR                           TRANSACTION       VALUE   1 DAY PRIOR   1 WEEK PRIOR   4 WEEKS PRIOR  
ANNOUNCED BUSINESS DESCRIPTION                   ($ mil)     ($ mil)  TO ANNC. DATE  TO ANNC. DATE  TO ANNC. DATE  
- -------------------------------------------------------------------------------------------------------------------- 

01/20/97  Manufacture catheters                   1218.3    1183.387          63.65          65.86          93.68
01/21/97  Pvd medical services to HMO's            369.7     364.333          -0.80          12.84          25.38
01/21/97  Mnfr toilet preparations                 116.8     980.318          23.50          23.50          27.62
01/22/97  Pvd oil, gas exploration svcs            320.8     316.140          72.90          87.41          94.20
01/23/97  Leverage buyout firm                    1390.4    1385.987          12.43          16.85          26.06
01/23/97  Electric, gas utility, hldg co            74.3      95.651          50.85          49.58          69.52
01/27/97  Mnfr automation, control sys             597.0     587.362          44.33          42.13          45.83
01/27/97  Own and operate drug stores             3911.7    3969.974           7.57          11.47          17.69
02/03/97  Mnfr refrigeration equipment             359.2     385.364          16.22          17.01          24.64
02/05/97  Securities brokerage firm              10573.0   51167.742          11.08          12.80          13.81
02/10/97  Provide healthcare services              378.2     539.628          30.29          35.45          59.07
02/11/97  Dvlp healthcare software                 170.6     146.516          38.58          44.26          43.09
02/13/97  Whl aircraft, aircraft equip              41.1      98.003          20.00          18.52          25.49
02/13/97  Insurance holding company               2374.4    2353.339          20.95          22.80          43.25
02/14/97  Own, op outpatient surgery ctr          1651.3    1612.877          27.65          40.04          36.08
02/14/97  Manufacture aircraft engines             442.7     752.153          37.93          41.18          36.36
02/14/97  Savings and loan                         334.7     350.727           7.65          20.00          23.03
02/18/97  Wholesale natural gas products          1222.4    1235.070          82.32          80.42          63.40
02/20/97  Real estate investment trust             114.5     370.576          28.26          25.21          16.86
02/24/97  Insurance company                        545.4     503.520          43.65          45.10          36.38
02/25/97  Produce whl petroleum                    257.0    2427.107          19.70          18.52          21.52
02/26/97  Mnfr oil, gas field machinery            710.9     709.813          62.67          83.46          78.10
02/26/97  Pvd network computer svcs               6510.7    6596.645          11.38          13.22           0.37
02/27/97  Mnfr oil, gas field equipment            609.6     616.802          22.90          13.02          15.93
02/28/97  Insurance company                       1652.7    1545.420          28.89          32.82          64.15
03/03/97  Pvd finl data processing svcs            220.6     247.837          67.50          60.00          82.31
03/07/97  Whl med supplies                         136.1     113.124          12.19          12.19          10.44
03/10/97  Electrical, construction prod            519.2     789.392          21.57          33.33          34.78
03/14/97  Dvlp healthcare software                 275.2     254.539          15.29          13.75          30.00
03/17/97  Publish newspapers, magazines           1351.8    1348.407          69.07          72.63          69.01
03/19/97  Pvd outsources marketing svcs            117.1     117.721          17.32          28.05           8.81
03/20/97  Investor group                           584.5     496.471          43.43          49.47          52.69
03/24/97  Publish scientific journals              310.7     299.206          85.51          43.82          54.22
03/24/97  Mnfr equip to mnfr semiconduct           217.9     200.189          -0.85           2.96          13.92
03/25/97  Produce beef and prok products           657.5     634.736          47.40          50.97          61.38
03/25/97  Mnfr health care info systems            142.8     140.394          18.93          23.00          26.47
03/26/97  Own, op radio stations                   322.2     487.367          15.22          16.48          14.60
03/31/97  Mnfr wide area network equip            3529.3    3445.088          28.28          46.70          21.08
04/07/97  Bank holding company                    2077.4    2055.265          65.00          50.04          17.70
04/07/97  Dvlp component-based software            958.4     949.495          18.54          23.31          23.77
04/08/97  Own, op radio bdcstg stations            208.9     155.812          17.37          19.23          19.23
04/09/97  Real estate investment trust              84.2      82.136           6.01           5.32           2.62
04/09/97  Real estate investment trust              78.6      82.657           4.97           7.12           2.90
04/09/97  Real estate investment trust              67.9      66.650           4.89           3.25           3.25
04/09/97  Mnfr, whl plumbing fixtures              574.0     593.708          29.32          48.28          49.57

----------------------------------
DATE        3 MONTHS PRIOR    1 YEAR PRIOR
ANNOUNCED    TO ANNC. DATE    TO ANNC. DATE        
- ----------------------------------------------

01/20/97             76.90            50.39
01/21/97             43.30             8.77
01/21/97             36.04            69.62 
01/22/97             74.03           150.47
01/23/97             31.65            16.85
01/23/97                                  
01/27/97             37.25            18.14
01/27/97             40.73            50.79
02/03/97             48.28            79.17
02/05/97                                  
02/10/97             73.16            50.33
02/11/97             62.96             8.64
02/13/97             28.00            33.33
02/13/97             68.33            57.20
02/14/97            -32.28            -0.66
02/14/97             66.67            96.72
02/14/97                                  
02/19/97             37.46            73.20
02/20/97             16.00            12.69
02/24/97             57.86           105.22
02/25/97             25.33            23.39
02/26/97             38.64           128.04
02/26/97             -6.80            16.35
02/27/97             25.65            79.22
02/28/97            150.96           107.14
03/03/97            112.70            92.81
03/07/97              3.94            14.93
03/10/97             30.53           -16.78
03/14/97             51.67            16.88
03/17/97             45.13            21.03
03/19/97             -0.47            27.27
03/20/97             24.56            97.22
03/24/97             79.02            50.59
03/24/97             62.24            81.49
03/25/97             71.74            36.64
03/25/97             95.22            30.14
03/26/97              8.16            22.54
03/31/97            -33.97           -18.89
04/07/97                                  
04/07/97            -23.49           -40.10
04/08/97             32.96            36.58
04/09/97              2.62            17.71
04/09/97             -0.38            15.00
04/09/97             -2.82            16.96
04/09/97             40.98            79.17

Page F-12

MERGER PREMIUMS TO MARKET VALUE ANALYSIS
MERGERS WITH TARGET PRICE EQUAL TO OR GREATER THAN $10 PER SHARE
ANNOUNCED AND COMPLETED 1/1/96 - 2/3/99
(Continued)

===============================================================================================================================
DATE        DATE
ANNOUNCED   EFFECTIVE   TARGET NAME                        TARGET BUSINESS DESCRIPTION       ACQUIROR NAME
- -------------------------------------------------------------------------------------------------------------------------------

04/09/97    07/21/97    Tambrands Inc                      Mnfr feminine hygiene products    Procter & Gamble                
04/14/97    11/12/97    APL Ltd                            Shipping ,trucking company        Neptune Orient Lines Ltd        
04/14/97    09/03/97    United Waste Systems Inc           Provide waste management svcs     USA Waste Services Inc          
04/14/97    01/05/98    Wyndham Hotel Corp                 Own and operate hotels            Patriot Amer Hosp/Wyndham Intl 
04/16/97    01/30/98    Steck-Vaughn Publishing Corp       Publish books, magazines          Harcourt General Inc
04/17/97    07/14/97    Drilex International Inc           Pvd prod, svcs used in drilling   Baker Hughes Inc
04/19/97    04/21/97    Vitalink Pharmacy Services Inc     Pvd health and allied svcs        Manor Care Inc
04/21/97    05/28/97    Goulds Pumps Inc                   Mnfr centrifugal pumps            ITT Industries Inc
04/21/97    06/10/97    National Education Corp            Vocational training services      Harcourt General Inc
04/22/97    09/04/97    International Family Ent Inc       Provide cable television svcs     Fox Kids Worldwide Inc
04/23/97    06/25/97    VenFone Inc                        Electronic funds transfer mach    Hewlett-Packard Co
04/30/97    06/03/97    GKN Sister Metals Inc(GKN PLC)     Mnfr automotive, metal parts      GKN PLC
05/01/97    07/30/97    David White Inc                    Mnfr, whl surveying instruments   ???? Partners 
05/05/97    08/13/97    Fort Howard Corp                   Mnfr sanitary tissue products     James River Corp of Virginia 
05/05/97    08/01/97    Logicon Inc                        Pvd computer svcs to military     Northrop Grumman Corp
05/05/97    08/19/97    Riser Foods Inc                    Own, op grocery stores            Grant Eagle Inc
05/05/97    06/13/97    Vivra Inc                          Provide home health care svcs     Incentive AB
05/06/97    08/15/97    BBN Corp                           Mnfr computer integrated sys      GTE Corp
05/06/97    07/22/97    BWIP Inc                           Mnfr fluid transfer equip         Durco International Inc
05/06/97    01/05/98    Physicians Health Services Inc     Own and operate HMO's             Foundation Health Systems Inc
05/06/97    07/25/97    Varsity Spirit                     Pvd cheerleading training svcs    Riddell Sports Inc
05/07/97    06/03/98    Reliable Life Insurance Co         Insurance company                 Unitrin Inc
05/07/97    08/26/97    Transitional Hospitals Corp        Own, op psychiatric hospitals     Vencor Inc
05/08/97    11/04/97    Living Centers of America Inc      Pvd long-term health care svcs    Apollo Management LP
05/12/97    10/16/97    Dynamics Corp of America           Mnfr electrical appliances        CTS Corp
05/12/97    09/09/97    Smith's Food & Drug Centers        Own and operate supermarkets      Fred Meyer Inc
05/13/97    08/26/97    Autumn Software Inc                Dvlp sales, mktg info software    BAAN Co NV
05/13/97    08/28/97    Inbrand Corp                       Mnfr incontinence products        Tyco International Ltd
05/14/97    11/18/97    Erron Global Power & Pipelines     Pvd gas transmission svcs         Erron Corp
05/20/97    09/02/97    Keystone International Inc         Mnfr indl flow control prod       Tyco International Ltd
05/21/97    08/14/97    Howell Industries Inc              Mnfr automotive parts             Oxford Automotive Inc
05/21/97    05/04/98    KU Energy Corp                     Electric utility holding co       LG&E Energy Corp
05/22/97    07/31/97    Biopsys Medical Inc                Mnfr surgical, medical instr      Johnson & Johnson
05/22/97    07/09/98    Chaparral Steel Co(Texas Ind)      Mnfr primary steel products       Texas Industries Inc
05/22/97    11/20/97    Mail Boxes Elc                     Pvd franchised postal services    US Office Products Co
05/23/97    10/06/97    Palmer Wireless Inc                Pvd telephone services            Price Communications Corp
05/27/97    08/08/97    Alamco Inc                         Oil & gas exploration, prod       Columbia Natural Resources Inc  
05/27/97    12/18/97    HFS Inc                            Own, op hotel franchises          CUC International Inc       
05/28/97    02/10/98    CommNet Cellular Inc               Cellular telephone services       Blackstone Capital Partners 
05/29/97    07/03/97    Fibreboard Corp                    Mnfr fibreboard, paperboard       Owens Corning               
06/02/97    07/15/97    Acordia Inc (Anthem Inc)           Pvd insurance brokerage svcs      Anthem Inc                  
06/03/97    01/15/98    Faulding Inc (FH Faulding & Co)    Mnfr pharmaceuticals              FH Faulding & Co Ltd        
06/04/97    07/28/97    Mexico Inc                         Develop educational software      Electronic Arts Inc         
06/06/97    10/14/97    Telco Communications Group Inc     Pvd switch-based telecom svcs     Excel Communications Inc    
06/09/97    10/01/97    American States Financial Corp     Fire and marine insurace co       SAFECO Corp                 
06/09/97    09/12/97    Amrion Inc                         Own, op food stores               Whole Foods Market Inc       
06/09/97    07/15/97    Prime Service Inc                  Pvd const equip rental svcs       Atlas Copco North America Inc

VALUE OF   ENTERPRISE                                       PREMIUMS      
------------------------------------------------   
DATE            ACQUIROR BUSINESS                   TRANSACTION        VALUE     1 DAY PRIOR    1 WEEK PRIOR  4 WEEKS PRIOR      
ANNOUNCED       DESCRIPTION                             ($ MIL)       ($MIL)   TO ANNC. DATE   TO ANNC. DATE   TO ANNC DATE      
- ------------------------------------------------------------------------------------------------------------------------------   

04/09/97        Mnfr household prod, oil, coffee        2003.9      1978.686            8.40           14.94          14.94      
04/14/97        Pvd deep sea oil transp svcs             878.5      1482.218           55.81           65.43          42.55      
04/14/97        Pvd waste disposal services             1682.2      1899.629            0.71            1.05          -1.25      
04/14/97        Real estate investment trust             773.1       731.676           48.02           44.52          48.93      
04/16/97        Own, op movie theatres, stores            40.3       221.362           21.65           32.58          24.21      
04/17/97        Mnfr oil, gas field machinery            120.1       133.636           31.44           37.88          59.82      
04/19/97        Own, op nursing homes, hotels             30.0       278.457           14.29            8.11          -4.19      
04/21/97        Mnfr brakes and chassis sys              922.1       913.487           61.75           57.45          60.87      
04/21/97        Own, op movie theatres, stores           776.1       874.090           22.63           54.13          40.00      
04/22/97        Pvd motion picture prodn svcs           1862.9      1903.499           94.44           95.80         107.41      
04/23/97        Mnfr computers, testing equip           1245.1      1142.303           67.64           50.19          43.77      
04/30/97        Mnfr whl auto parts, metals              469.7       523.098           37.04           38.32          32.74      
05/01/97        Investment company                         5.9         7.472           11.63           14.29          18.52      
05/05/97        Mnfr paper, paper-related prods         5682.6      5734.855           16.31           27.92          43.30      
05/05/97        Aircraft, aerospace products            1027.5       949.943           75.68           84.23         102.65      
05/05/97        Whl retail grocery prods                 468.5       415.188           11.63           29.23          29.79      
05/05/97        Mnfr medical instr, ind equip           1660.5      1768.293           26.09           41.77          35.70      
05/06/97        Pvd telecommunications svcs              713.8       678.339           26.09           32.57          64.54      
05/06/97        Mnfr machinery, metal castings           530.7       537.884           -5.48           14.15          18.72      
05/06/97        Own, op HMO's, holding company           268.2       231.409           23.50           26.97          51.68      
05/06/97        Manufacture football equipment            91.0        89.635           30.35           28.14          23.93      
05/07/97        Insurance company                        261.1       145.966           51.11           51.11          52.06      
05/07/97        Provide healthcare services              628.0       592.638           60.00           60.00          86.51      
05/08/97        Investment management services          1048.2      1126.820           17.82           22.73          41.49      
05/12/97        Mnfr electronic components               244.6       255.742           91.27           94.17         112.70      
05/12/97        Own, operate department stores          2018.0      2074.866            9.93           16.48          26.99       
05/13/97        Develop software                         259.9       218.697           32.99           40.38          55.84      
05/13/97        Mnfr fire protection systems             322.8       367.434           69.98           78.34         107.22       
05/14/97        Own, operate gas pipelines               428.0       866.482           11.83           13.70          19.74       
05/20/97        Mnfr fire protection systems            1361.5      1426.756           84.19           85.31         102.49       
05/21/97        Mnfr engineered metal prods               23.0        19.054           28.70           30.40          32.14       
05/21/97        Electric utility                        1539.4      2112.892           34.01           31.84          35.69       
05/22/97        Mnfr medical equip and prods             303.5       293.863            6.99            6.99          22.44       
05/22/97        Mnfr cement, steel products               72.8       519.310           20.39           25.25          29.17       
05/22/97        Whl retail office supplies               354.8       324.214           39.20           40.99          38.31       
05/23/97        Own, op TV and radio stations            870.4       865.524           45.08           55.56          64.71       
05/27/97        Operate natural gas pipeline             102.8        94.428            7.69           11.50          16.67       
05/27/97        Provide discount club svcs             11342.9     11759.191            5.93            2.99           5.23       
05/28/97        Investment bank                          631.2       745.352           21.78           28.64          39.81       
05/29/97        Mnfr glass fiber products                631.2       478.004           15.79           22.22          49.66       
06/02/97        Insurance company                        193.2       633.961           12.68           11.50          25.98       
06/03/97        Mnfr whl drugs, toiletries                77.3       206.005           25.58           22.73          46.96       
06/04/97        Develop wholesale software               127.5       116.945            2.27            2.27          40.63       
06/06/97        Pvd telephone commun svcs               1046.5      1017.645           32.91           23.77          26.44       
06/09/97        Provide Insurance services              3127.1      3110.922           45.74           48.62          57.32       
06/09/97        Own, op natural foods stores             152.6       152.212            8.12           19.22          47.04       
06/09/97        Mnfr compressors, machinery             1112.0      1110.539           28.64           29.95          31.28       

PREMIUM                                  
-----------------------------------                  
DATE               3 MONTHS PRIOR   1 YEAR PRIOR                       
ANNOUNCED          TO ANNC. DATE    TO ANNC. DATE                      
- -----------------------------------------------------

04/09/97                                                                
04/14/97            40.31                43.32                          
04/14/97            13.95                53.09                          
04/14/97            29.23                                               
04/16/97            27.57                55.26                          
04/17/97            33.44                                               
04/19/97            17.53                -8.05                          
04/21/97            51.02                68.18                          
04/21/97            48.67                54.13                          
04/22/97            15.94                61.38                          
04/23/97            34.67                24.69                          
04/30/97                                                                
05/01/97            52.38                -4.00                          
05/05/97            33.18                92.95                          
05/05/97           102.66               134.48                          
05/05/97            28.24               115.38                          
05/05/97            18.24                23.90                          
05/06/97            26.09                 5.45                          
05/06/97            11.58               -10.60                          
05/06/97            46.75                 8.65                          
05/06/97            26.00                26.00                          
05/07/97                                                                
05/07/97            82.86                68.42                          
05/08/97            36.71                 9.46                          
05/12/97           107.55               156.32                          
05/12/97            62.85                63.23                          
05/13/97             9.19                                               
05/13/97           -38.18               -81.87                          
05/14/97            12.30                38.08                          
05/20/97            92.30                73.73                          
05/21/97           -21.90                26.50                          
05/21/97            32.93                38.59                          
05/22/97            -6.61                17.23                          
05/22/97            29.17                 5.08                          
05/22/97           226.21                                               
05/23/97            27.27               -15.15                          
05/27/97            11.50                44.83                          
05/27/97           -12.17                -3.97                          
05/28/97           605.88               449.62                          
05/29/97            65.41               120.00                          
06/02/97           207.69               317.39                          
06/03/97            56.52               111.76                          
06/04/97            18.42               -50.55                          
06/06/97            61.32                                               
06/09/97            41.89               104.35                          
06/09/97            43.69                52.37                          
06/09/97            60.00                                               

Page F-13

Merger Premiums to Market Value Analysis
Mergers with Target Price Equal to or Greater than $10 per Share
Announced and Completed 1/1/96-2/3/99
(continued)
================================================================================

Date            Date
Announced     Effective    Target Name                       Target Business Description           Acquiror Name
- ------------------------------------------------------------------------------------------------------------------------------------

06/10/97       09/30/97    Numar Corp                        Mnfr imaging logging equip            Halliburton Co                
06/11/97       10/31/97    Pacific Greystone Corp            Pvd general contracting svcs          Lennar Corp                   
06/12/97       10/01/97    Giddings & Lewis Inc              Mnfr automated machine tools          Thyssen AG                    
06/13/97       03/26/97    Bally's Grand Inc                 Own and operate casino hotels         Hilton Hotels Corp            
06/16/97       08/29/97    Core Industries Inc               Manufacture electronic equip          United Dominion Industries Ltd
06/16/97       10/10/97    Multicare Cos Inc                 Own, op nursing care facilities       Genesis Eldercare             
06/17/97       07/24/97    McFarland Energy Inc              Oil and gas exploration, prodn        Monterey Resources Inc        
06/17/97       07/25/97    Seda Specialty Packaging Corp     Mnfr specialty packaging prods        CCL Industries Inc            
06/19/97       08/15/97    Advanced Logic Research Inc       Mnfr microcomputer systems            Gateway 2000 Inc              
06/20/97       03/30/98    Wheelabrator Technologies Inc     Mnfr laboratory, medical equip        Waste Management Inc          
06/23/97       10/17/97    Integon Corp                      Insurance holding company             General Motors Acceptance(GM) 
06/23/97       08/29/97    Tandem Computers Inc              Mnfr computers, network systems       Compaq Computer Corp          
06/24/97       10/14/97    American Exploration Co           Oil and gas exploration, prodn        Louis Dreyfus Natural Gas     
06/24/97       09/29/97    SMT Heath Services Inc            Operate outpatient facilities         Three Rivers Holding Corp     
06/26/97       11/26/97    Rhone-Poulenc Rorer Inc           Manufacture pharmaceuticals           Rhone-Poulenc SA              
06/30/97       10/09/97    Fusion Systems Corp               Mnfr curing sys, semiconductors       Eaton Corp                    
06/30/97       12/23/97    Rykoff-Sexton Inc                 Wholesale grocery products            JP Foodservice Inc            
07/02/97       09/23/97    American Filtrona Corp            Mnfr bonded fiber                     Bunzl PLC                     
07/03/97       08/05/97    Duty Free International Inc       Own, op duty free shops               BAA PLC                       
07/03/97       08/06/97    Wyle Electronics                  Whl high tech electronic prods        Raab Karcher AG(VEBA AG)      
07/07/97       11/06/97    Caim Energy USA Inc               Oil and gas exploration, prodn        Meridian Resource Corp        
07/07/97       10/21/97    RoTech Medical Corp               Pvd home health care svcs             Integrated Health Services Inc
07/08/97       10/24/97    Equitable of Iowa Cos             Life insurance company                ING Groep NV                  
07/09/97       09/23/97    Control Data Systems Inc          Mnfr computers, peripherals           CDSI Holding Corp             
07/09/97       12/23/97    Seaman Furniture Co               Own, op ret furniture stores          Investor Group                
07/10/97       11/18/97    Kinetic Concepts Inc              Mnfr medical treatment tables         Investor Group                
07/10/97       12/31/97    Reading & Bates Corp              Pvd oil, gas drilling services        Falcon Drilling Co            
07/10/97       09/29/98    Upper Peninsula Energy Corp       Electric utility                      Wisconsin Public Services Corp
07/15/97       10/02/97    DHTechnology Inc                  Mnfr, whl computer printers           Axiohm SA                     
07/15/97       10/28/97    Intl Imaging Materials            Mnfr thermal transfer ribbons         Paxar Corp                    
07/15/97       09/04/97    Ply-Gem Industries Inc            Manufacture wood products             Nortek Inc                    
07/17/97       10/22/97    Louisana Land & Exploration       Oil and gas exploration, prodn        Burlington Resources Inc      
07/17/97       09/29/97    Octel Communications Corp         Mnfr voice processing systems         Lucent Technbologies Inc      
07/23/97       12/18/97    Alliance Imaging Inc              Pvd diagnostic imaging svcs           Newport Investment LLC        
07/24/97       09/15/97    Nellcor Puritan-Bennett           Mnfr electn patient monitors          Mallinckrodt Inc              
07/28/97       02/02/98    Chips and Technologies Inc        Design, whl integrated circuit        Intel Corp                    
07/28/97       11/17/97    Cyrix Corp                        Manf PC units, microprocessors        National Semiconductor Corp   
07/28/97       12/22/97    Freeport-McMoRan Inc              Own, op chem, fertilizer mines        IMC Global Inc                
07/28/97       10/08/97    Regency Health Services Inc       Pvd nursing services                  Sun Healthcare Group Inc      
07/30/97       09/18/97    Amdahl Corp                       Develop computer sys, software        Fujitsu Ltd                   
07/30/97       02/02/98    Plasti-Line Inc                   Mnfr illuminated outdoor signs        PL Holdings Corp              
07/31/97       09/24/97    Bucyrus International Inc         Mnfr surface mining machinery         American Industrial Partners  
07/31/97       10/03/97    Delaware Otsego Corp              Own and operate railroad              Investor Group                
07/31/97       10/23/97    Sterling House Corp               Own, op nursing homes                 Alternative Living Services   
08/04/97       10/24/97    Columbus Realty Trust             Real estate investment trust          Post Properties Inc           
08/04/97       12/23/97    Perkins Family Restaurant LP      Own, op franchised restaurants        Restaurant Co                  

Premium
Value of Enterprise  --------------------------------------------------------------------------
Acquiror                         Transaction      Value   1 Day Prior   1 Weeks Prior  4 Weeks Prior  3 Months Prior   1 Year Prior
Business Description                 ($ mil)     ($mil)  to Annc. Date  to Annc. Date  to Annc. Date   to Annc. Date  to Annc. Date
- ------------------------------------------------------------------------------------------------------------------------------------

Mnfr oil field machinery              341.6     336.537          90.94          99.35          95.65          115.62         126.40
Construct residential bldgs           459.3     452.054          75.27          83.30          98.45          110.67
Manufacture malleable iron            703.0     712.155          10.53           9.80           0.60           46.09          24.44
Own, operate hotels                    42.6     667.805          27.88          29.85          31.06           66.14          32.70
Mnfr structural metal                 275.2     317.269          26.58          37.93          49.25           60.00          76.99
Own, op geriatric facilities         1249.1    1316.493           9.27          13.71          34.94           55.56          38.27
Oil and gas exploration, prodn        111.2     103.585          11.58          41.33          44.78           57.87          89.04
Mnfr, pvd specialty packaging         182.6     192.184          31.82          36.47          52.63           68.12          40.61
Mnfr personal computers               206.8     148.059          29.17          30.53          34.78           67.57          87.88
Pvd chemical waste mgmt svcs          869.7    3191.550          26.92          28.16          30.69           15.79           4.76
Provide business finance svcs         517.1     668.022         173.68          92.59          74.79           73.33          30.00
Manufacture personal computers       2780.4    2873.860          49.33          51.86          51.86           99.11         113.33
Oil and gas exploration, prodn        275.5     305.834          12.99          15.03          21.60           41.87          28.97
Investment company                     75.6      83.095           4.44           2.17           8.05           44.62          43.69
Mnfr chemicals and cosmetics         4831.6   16358.071          22.11          22.79          29.33           29.12          44.51
Manufacture automotive parts          308.6     278.551          11.43           9.86          24.30           50.00          57.58
Wholesale groceries                  1435.9    1172.904          24.40          26.00          27.65           38.50          69.81
Whl, mnfr paper, constr material      183.5     137.243           8.82           2.24           3.38            3.38          53.79
Own, op airports, airfields           674.6     751.305                         39.13          50.00
Wholesale petroleum products          633.0     751.326          16.79          38.41          35.14           49.25          52.67
Oil and gas exploration, prodn        233.6     279.718          22.30          28.97          26.67           13.19          -5.84
Pvd specialty healthcare svcs         918.9     828.274          19.79          12.70          22.22           15.95          25.61
Insurance company                    2626.4    2586.784          18.52          20.35          21.70           38.78          86.30
Investment holding company            273.9     176.779          29.08          30.65          35.00           31.71          28.57
Investor group                         45.6     130.115          21.46          25.25          21.46           27.64          43.14
Investor group                        776.7     814.201           6.94           7.69           9.22           32.76          24.19
Pvd contract drilling svcs           2587.0    2680.955          16.55          14.52          30.47           69.09          53.19
Electric and gas utility               73.2     120.398          33.18          29.67          35.00
Mnfr, whl computer printers           169.5     167.604          57.48          56.25          57.48           45.99           6.38
Mnfr label systems                    244.4     267.857          67.35          60.18          64.89           69.88          32.69
Mnfr AC, building, wood prods         476.3     388.572          20.00          16.42          19.08           48.57          30.00
Oil and gas exploration, prodn       2954.3    2911.544          20.76          25.47          39.98           48.08          17.72
Mnfr telecom equip, software         1824.4    1772.960          15.89          37.40          41.31           87.88          54.04
Investment company                    114.2     205.494           7.32           3.53          14.29           44.26         134.67
Mnfr diagnostic products             1858.4    1833.054          36.12          43.40          57.24           67.65          26.67
Mnfr, whl micorprocessors             422.9     391.346          25.00          32.08          68.68          115.38          77.22
Mnfr semiconductors, circuits         566.4     623.211          30.31          29.54          29.54           34.66          97.79
Mnfr phosphate fertilizers            790.7    1233.537          14.35          13.55           5.20            5.21         -16.77
Pvd long-term healthcare svcs         587.9     570.892          34.35          50.43          43.09          107.06         104.65
Mnfr semiconductors, computers        924.8    1563.050           4.97          22.47          25.57           49.13
Investor group formed by mgmt          30.7      61.995          36.47          36.47          30.34           65.71          84.13
Pvd fund mgmt & fin adv svcs          193.3     262.147          33.33          46.94          71.43           94.59         108.70
Investor group                         53.4      62.540                         15.03          17.33           32.33         160.28
Pvd residential care svcs             170.0     151.786          30.36          29.47          40.46           88.44          48.69
Real estate investment trust          600.0     565.318           4.23           4.23           4.51          191.08         247.75
Own, operate restaurants               76.3     215.006          28.74          26.55          31.77            5.66          17.89

Merger Premiums to Market Value Analysis
Mergers with Target Price Equal to or Greater than $10 per Share
Announced and Completed 1/1/96 - 2/3/99
(continued)

Date         Date                                                                                                              
Announced    Effective    Target Name                      Target Business Description         Acquiror Name                  
- -----------------------------------------------------------------------------------------------------------------------------------

08/04/97    11/12/97      Sullivan Dental Products         Wholesale dental products           Henry Schein Inc.               
08/08/97    12/22/97      Titan Holdings Inc.              Auto property, casualty ins co      USF&G Corp                      
08/11/97    12/19/97      Amscan Holdings Inc.             Whl paper, plastic party goods      Confetti Acquisition Inc         
08/11/97    09/30/97      National Sanitary Supply Co.     Sanitary maintenance supplies       Unisource Worldwide Inc
08/11/97    12/22/97      Vacation Break USA Inc.          Real estate development firm        Fairfield Communities Inc       
08/12/97    09/17/97      Isomedix Inc.                    Pvd contract sterilization svcs     Steris Corp                     
08/12/97    03/03/98      LIN Television Corp.             Own, op TV bdcstg stations          Hicks Muse Tate & Furst Inc.    
08/14/97    12/31/97      Allied Capital Commercial Corp   Real estate investment trusts       Allied Capital Lending Corp     
08/14/97    12/31/97      Allied Capital Corp              Pvd bus, personal fin svcs          Allied Capital Lending Corp     
08/14/97    12/29/97      Tueday Morning Corp.             Own, operate giftware stores        Madison Dearborn Partners       
08/14/97    12/05/97      Uniforce Services Inc.           Pvd temporary personnel svcs        Comforce Corp                   
08/18/97    11/04/97      Monterey Resources Inc.          Oil and gas exploration, prodn      Texaco Inc.                     
08/21/97    01/14/98      Boston Technology Inc.           Mnfr voice processing systems       Comverse Technology Inc.       
08/25/97    10/21/97      ACC Consumer Finance Corp        Pvd auto financing services         Household International Inc     
08/25/97    12/17/97      Mosinee Paper Corp               Manufacture paper                   Wausau Paper Mills              
08/26/97    12/22/97      Savannah Foods & Industries      Produce sugar, sugar by-prod        Imperial Holly Corp             
08/28/97    12/23/97      Evans Withycombe Residential     Real estate investment trust        Equity Residential Pptys Trust  
08/28/97    02/25/98      Value Property Trust             Real estate investment trust        Wellsford Real Properties Inc.  
08/28/97    10/10/97      Versa Technologies Inc.          Mnfr rubber components, molds       Applied Power Inc.              
08/29/97    12/29/97      Rexel Inc.                       Whl electrical components           Rexel SA (Pinault-Printemps)     
09/03/97    12/30/97      Zytec Corp                       Mnfr electrical power supplies      Computer Products Inc.          
09/04/97    01/09/98      Hudson Foods Inc.                Produce poultry products            Tyson Foods Inc.                
09/05/97    11/26/97      Medic Computer Systems Inc       Pvd mgmt info sys design services   Misys PLC                       
09/08/97    02/02/98      CompuServe Inc (H&R Block)       Internet service provider           WorldCom Inc.                   
09/08/97    12/31/97      Fuqua Enterprises Inc.           Manufacture tanned leather          Graham-Field Health Products    
09/10/97    11/28/97      Data Documents Inc               Manufacture tabulating cards        Corporate Express Inc.          
09/10/97    12/02/97      Tinsley Laboratories Inc.        Mnfr optical instr, lenses          Silicon Valley Group Inc.       
09/11/97    12/22/97      Fieldcrest Cannon Inc.           Mnfr broadwoven fabrics             Pillowtex Corp                  
09/12/97    12/09/97      Unison Software Inc.             Develop network mgmt software       Tivoli Systems Inc (IBM Corp)   
09/12/97    01/16/98      WHG Resorts & Casino Inc.        Own, op resorts and casino          Patriot Amer Hosp/Wyndham Intl  
09/12/97    02/25/98      Western National Corp.           Insurance holding co                American General Corp           
09/15/97    12/19/97      Beacon Properties Corp           Real estate investment trust        Equity Office Properties Trust  
09/16/97    11/04/97      All American Communications      Pvd motion picture video svc        Pearson PLC                     
09/16/97    02/02/98      Quick & Reilly Group Inc         Securities brokerage firm           Fleet Financial Group, Inc. M.A.
09/18/97    12/16/97      Guaranty National Corp           Insurance company                   Orion Capital Corp              
09/18/97    12/22/97      USLD Communications Corp         Pvd long distance commun svcs       LCI International Inc.          
09/19/97    01/16/98      Sterling Electronics Corp        Whl electronic components           Marshall Industries             
09/21/97    12/16/97      Computer Data Systems Inc.       Design computer program data        Affiliated Computer Services     
09/22/97    12/05/97      Washington National Corp         Insurance company                   Conseco Inc                     
09/23/97    01/12/98      Tejas Gas Corp                   Own, op natural gas lines           Shell Oil (Royal Dutch Petro)   
09/24/97    11/24/97      Allergan Ligand Retinoid         Manufacture pharmaceuticals         Ligand Pharmaceuticals Inc.     
09/24/97    12/12/97      Garne Financial Corp             Pvd fund access svcs                Travelers Express Co (Viad)     
09/24/97    11/28/97      Salomon Inc.                     Investment bank, fin advisory       Travelers Group Inc.            
09/25/97    02/19/98      Talley Industries Inc.           Mnfr guided missiles, space veh     Carpenter Technology Corp       
09/29/97    12/22/97      Graphic Industries Inc.          Pvd financial printing svcs         Wallace Computer Services Inc.  
09/29/97    12/23/97      HPR Inc.                         Pvd computer programming svcs       HBO & Co                        
09/29/97    12/01/97      Morningstar Group Inc.           Produce dairy products              Suiza Foods Corp                

Premium
Value of  Enterprice______________________________________________________________________
Acquir or                           Transaction   Value   1 Day Prior   1 Wk. Prior   4 Wk. Prior   3 Mnths Prior  1 Yr. Prior
Business Description                  ($mil)      ($mil)  to annc. Date to annc. Date to annc. Date to annc. Date  to annc. Date
- ---------------------------------------------------------------------------------------------------------------------------------

Whl med supplies                         312.8      314.554      28.85        40.71       66.20        79.19       186.70
Insurance holding company                278.1      277.428      15.99        19.06       24.85        30.26        57.29
Investment company                       334.9      390.418      36.08        37.50       46.67        23.36              
Wholsale printing paper                  155.9      149.309      -6.67        20.00       47.37                          
Construct vacation resorts               178.1      239.938      41.57        39.09       95.75       147.75        80.18
Mnfr sterile processing sys              139.8      136.201       5.81        15.49       13.89        38.98        47.75
Leverage buyout firm                    1960.6     1988.597      15.85        18.75       18.01                            
Closed-end mgnt investment co            381.3      621.239       7.49         7.77       10.64         8.90        18.18
Closed-end mgnt investment co            130.0      210.640       7.83         7.83        9.10        23.12        19.93
Investors                                298.6      337.358      22.70        25.79       11.11        28.21       197.03
Pvd help supply services                 140.7      133.715      37.56        37.56       52.62       101.50        48.23
Oil and gas exploration prodn           1435.3     1320.885      39.42        39.42       54.13        30.23             
Mnfr telecommunications equip            873.9      906.337      -0.32        16.22       10.37        15.71       103.42
Provide financial services               186.9      219.825      35.82        34.75       29.64        96.69       125.16
Manufacture, wholesale paper             446.3      512.461      15.62        15.91        5.64        11.73        52.89
Produce sugar                            582.9      609.908       8.36        14.89       17.39        31.71        65.31
Real estate investment trust             932.4     1068.033      14.16        21.39       18.88        22.88        21.40
Real estate investment trust             186.6      163.549      24.99        20.90       18.68        25.59        32.00
Mnfr tools, equip, consumables           141.9      140.649      36.81        33.11       31.33        72.84        72.84
Whl radios, televisions                  302.0      647.890      19.21        26.32       21.62        23.29        62.16
Design, mnfr electronic prod             412.3      428.022      45.35        48.22       71.17       140.86       355.68
Poultry, meat processing                 648.4     1021.868      23.49        31.63       28.64        25.81        51.64
Manufacture computers                    915.8      882.601       7.69        12.00       25.00        89.19        17.15
Pvd telecommunications svcs             1185.9     1052.173       1.39         2.92        8.36        16.36         1.39
Mnfr medical supply, healthcare          231.0      229.950      42.32        52.82       78.75        81.87        57.24
Retail office supplies                   159.4      212.192      10.91        14.87       26.13        26.12        53.14
Mnfr semiconductor equip                  40.5       40.888      96.36        96.36       96.36       132.53       301.64
Mnfr, whl home textile products          768.2      787.170       1.49         8.58       31.72        76.62        86.30
Dvlp systems mgmt software               183.0      180.262       9.09        25.00       22.45       100.00         4.65
Real estate investment trust             266.0      169.936      35.08        72.35       78.50       117.30          
Insurance holding company               1215.0     2340.921       9.58         7.43       14.41        13.62        68.88
Real estate investment trust            4039.4     3358.846      28.39        30.62       30.85        45.80        69.44
Publish  newspapers, periodicals         500.2      498.587      12.71        41.67       37.84       100.00       175.68
Bank holding company                    1525.5     1440.082      18.23        33.10       69.63        60.91       103.58
Insurance company, holding co            117.2      647.411      10.77        23.87       27.72        44.00       125.00
Pvd telecommunications svcs              402.8      407.074      18.86        34.13                    40.10       120.92
Whl electronics components               217.6      208.733      16.26        30.23       57.01        48.67        55.56
Pvd data processing services             383.7      389.575      42.54        47.63       73.68       665.48         0.00
Insurance holding company                424.0      433.679       2.70         4.11       12.24        17.70        10.37
Oil and gas exploration prodn           2165.6     2203.964      24.09        22.39       33.70        50.23        75.71
Manufacture diagnostic tests              71.4       39.701      13.03        11.59        7.83            
Pvd money order insuance svcs             50.6       42.633       4.88         4.88        4.88        11.69        10.26
Insurance company                       8852.1   141077.448      21.43        24.09       34.60        44.76        77.50
Mnfr zirconium steel products            309.4      264.393       6.67        10.98       34.27        34.27        54.84
Mnfr manifolds business forms            424.5      418.753       8.75        19.18       34.88        65.71       155.88
Dvlp healthcare software                 389.6      376.008      22.92        24.54       32.38        30.54        57.08
Produce milk, related prod               972.0      932.575      14.62        11.48       53.46        

Merger Premiums to Market Value Anaysis
Mergers with Target Price Equal to or Greater than $10 per Share
Announced and Completed 1/2/96 - 2/3/99
(continued)

- ------------------------------------------------------------------------------------------------------------------------------------
Date        Date                                                                          
Annouced    Effective    Target Name                     Target Business Description                Acquiror Name               
- ------------------------------------------------------------------------------------------------------------------------------------

09/30/97    11/26/97     Arbor Health Care Co            Own and operate nursing homes              AHC Acquitison Corp
10/01/97    01/29/98     Brooks Fiber Properties Inc     Pvd communication installation             Worldcom Inc
10/01/97    09/14/98     MCI Communications Corp         Pvd telecommunication services             Worldcom Inc
10/02/97    04/30/98     Kapson Senior Quarters Corp     Provide residential care svcs              Prometheus Senior Quarters
10/03/97    12/29/97     Natl Health Enhancement Sys     Develop healthcare software                HBO & Co
10/06/97    01/28/98     Caliber System Inc              Trucking holding company                   FDX Corp
10/06/97    12/19/97     EndoVascular Technologies Inc   Mnfr surgical instruments                  Guidant Corp
10/06/97    03/20/98     Orion Network Systems Inc       Pvd  Communications svcs                   Loral Space & Communications
10/08/97    04/07/98     Associates First Capital Corp   Pvd finance, leasing services              Shareholders
10/09/97    12/23/97     Melamine Chemicals Inc          Manufacture melamine crystal               Borden Chemical Inc (Borden) 
10/10/97    11/19/97     Greenfield Industries Inc       Mnfr steel cutting tools                   Kennametal Inc
10/13/97    01/22/98     Netcom On-Line Communication    Internet service provider                  ICG Communications Inc
10/13/97    12/01/97     Network General Corp            Pvd computer sys design svcs               McAfee Assoicates Inc
10/15/97    12/04/97     Viewlogic Systems Inc           Dvlp automation software                   Synopsys Inc
10/16/97    02/12/98     Omni Insurance Group Inc        Insurance company                          Hartford Financial Services
10/17/97    12/29/97     Computational Systems Inc       Manufacture measuring devices              Emerson Electric Co
10/17/97    11/19/97     Exide Electronics Group Inc     Manfuacture power supplies                 BTR PLC
10/17/97    01/02/98     Infinity Financial Technology   Dvlp finanical software                    SunGard Data Systems Inc
10/20/07    02/24/98     ITT Corp                        Own and operate hotels                     Starwood Hotels & Resorts
10/20/97    03/06/98     Santa Fe Pacific Pipeline       Operate petroleum pipelines                Kinder Morgan Energy Partners
10/20/97    06/24/98     Ticketmaster Group              Own, operate ticket agencies               HSN Inc
10/21/97    01/07/98     International Dairy Queen Inc   Whl dairy desserts,hamburgers              Berkshire Hathaway Inc
10/23/97    12/19/97     Premenos Technology Corp        Develop EDI software                       Harbinger Corp
10/23/97    04/02/98     Universal Outdoor Holdings Inc  Pvd outdoor advertising svcs               Clear Channel Communications
10/29/97    01/30/98     Carson Pirie Scott & Co         Own, op department stores                  Proffitt's Inc
10/31/97    03/12/98     ILC Technology Inc              Mnfr high intensity lamps                  BEC Group Inc
10/31/97    02/27/98     Xpedite Systems Inc             Pvd enchanced fax services                 Premiere Technologies Inc
11/03/97    03/24/98     Oregon Metallurgical Corp       Mnfr whl titanium                          Allegheny Teledyne Inc
11/03/97    01/09/98     Sequana Therapeutics            Mnfr diagnostic substances                 Arris Phamaceuticals Corp
11/04/97    05/20/98     Safety-Kleen Corp (Laidlaw)     Pvd vehicular cleaning svcs                Laidlaw Environmental Services
11/05/97    01/16/98     Mac Frugal's Bargains           Whl net general merchandise                Consolidated Stores Corp
11/07/97    03/10/98     Quality Food Centers Inc        Own and operate supermarkets               Fred Meyer Inc
11/11/97    02/11/98     Healthdyne Technologies Inc     Mnfr specialized med devices               Respironics Inc
11/13/97    03/25/98     Chartwell Leisure Inc           Own, op hotels and motels                  Investor Group
11/13/97    03/11/98     Hugoton Energy Corp             Oil and gas exploration prodn              Chesapeake Energy Corp
11/17/97    02/26/98     Granite Financial Inc           Pvd Business credit services               Fidelity National Financial
11/19/97    02/27/98     Amati Communications Corp       Mnfr data communications equip             Texas Instruments Inc
11/19/97    04/01/98     Renal Treatment Centers Inc     Own, op kidney dialysis centers            Total Renal Care Holdings Inc
11/19/97    08/12/98     Telemundo Group Inc             Own, op Spanish TV stations                Investor Group
11/21/97    01/28/98     BDM International Inc           Pvd comp infotechnology svcs               TRW Inc             
11/24/97    03/30/98     MAPCO Inc                       Gas utility; petro refining                Williams Cos Inc            
11/26/97    04/23/98     ACC Corp                        Pvd telecommunications svcs                Teleport Communications Group
11/26/97    02/25/98     Universal Hospital Services     Pvd med equip rental services              Investor Group             
11/29/97    12/30/97     Defecta-Shield Corp             Mnfr truck accessories                     Lund International Holdings
12/01/97    02/19/98     Raptor Systems Inc              Develop security mgmt software             AXENT Technologies Inc        
12/02/97    06/02/98     Interstate Hotels Co            Own,op hotels and motels                   Patriot Amer Hosp/Wyndham Intl

Premium
Acqurior                      Value of  Enterprise     -----------------------------------------------------------------------------
Business Decription        Transaction       Value     1 Day Prior     1 Week Prior    4 Weeks Prior   3 Months Prior  1 Year Prior 
($mil)      ($mil)     to Annc. Date   to Annc. Date   to Annc. Date   to Annc. Date   to Annc. Date
- ------------------------------------------------------------------------------------------------------------------------------------

Investment holding company        424.2     419.333        15.39           19.60           26.76          39.53            92.51  
Pvd telecommunications svcs      2532.6    3112.888        35.71           58.40           83.65          93.47           121.34  
Pvd telecommunications svcs     41906.9   43588.512        65.17           63.55           58.10          20.35            96.15  
Pvd nursing care services         247.4     231.852        -0.86            9.43            1.75          34.88            45.00  
Dvlp healthcare software           97.8      96.522        16.69           41.48          121.93          85.57            76.88  
Provide express delivery svcs    2471.4    2681.170        13.90           19.72           42.57          68.28           284.73  
Mnfr cardiovascular equipment     187.8     190.460        22.14           22.14           73.91          87.13            56.86  
Manufacture satellite equip       425.6    1265.081        20.16           27.94           32.62          68.16            91.91  
Investor group                  26624.6   75189.213        32.67           36.32           31.24         178.01           292.96  
Mnfr formaldehyde, resins         119.7      87.782        70.83           72.63           70.83          46.43           177.97  
Mnfr metal working tools          957.0    1062.171        19.69           26.67           44.08          34.22            35.71  
Pvd telecommunications svcs       269.4     214.024        49.75           70.94           78.52          64.73            51.00  
Develop network software         1142.5    1113.339        19.65           25.27           42.72                                  
Develop automation software       530.9     492.986        24.44           25.14           29.48          82.11           215.49  
Provide insurance services        184.7     184.724        78.87           75.78          130.91         154.00           252.78  
Mnfr appliance components         158.6     160.451        45.08           48.25           62.47         101.02            91.29  
Mnfr plastic, rubber indl prods   583.2     590.907       125.24          133.17          149.46          30.34           146.81  
Provide data processing svcs      358.0     347.757        19.00           17.93           17.40          -0.09                   
Real estate investement trust   13748.2   13534.835        94.29           98.25           95.40          34.12            98.83  
Operate natural gas pipelines    1473.0    1352.149        31.82           33.24           38.56          34.27            51.64  
Operate television stations       413.2     845.297        32.00           28.43           56.32          68.51                   
Property casualty insurance co    596.9     558.693        11.92            9.09            9.37           8.54            35.00  
Dvle electn commerce software     234.7     211.132        55.20           49.12           27.82         117.26             8.63  
Own,op TV,radio bdcstg station   1627.8    1729.528         2.32            5.17           20.46          21.75            29.65  
Own and operate dept stores       867.7     992.381        38.83           39.30           31.80          56.87           109.29  
Mnfr,whl eyeglass lenses, frame   130.8     135.550       108.72          107.62          108.72         128.19           125.56  
Pvd computer telphony svcs        496.4     384.674        69.02           73.02           68.05          73.02            78.29  
Mnfr specialty materials, metal   557.2     566.798        45.50           61.66           40.62          35.05             9.12  
Manfacture synthetic drugs        169.4     169.973        44.00           47.27           23.43          82.54             6.23  
Pvd waste removal svcs           1804.0    2054.954        26.16           38.06           47.32                                  
General merchandise ret stores    994.1    1040.900         2.92           18.49           23.46          33.31            62.78  
Own,operate department stores    1703.4    1671.766        13.86           23.43           27.96          42.28            49.76  
Mnfr, whl respiratory prod        341.9     344.155        44.36           40.15           44.36          44.36           166.67  
Investor group                    240.8     272.750        11.29            4.55           11.29          12.20            25.45   
Oil and gas exploration prodn     377.0     377.461         7.68           11.04           26.91          12.25            52.34  
Title insurance company           132.4     151.926        89.79           89.79           87.61          87.59           155.00  
Mnfr semiconductors,computers     459.8     463.297        31.69           44.14           13.48          26.48            13.58  
Pvd kidney diaysis sevices       1362.6    1457.031         8.63           17.04           26.87          16.63            64.55  
Investor group                    521.4     710.483        19.66           29.07           24.96          30.76            47.72  
Elect equip, credit reporting     888.0     923.006        31.11           43.47           38.01          13.46            19.19  
Gas utility                      2634.1    3405.648        21.05           35.99           43.66         985.88                   
Pvd telecommunications services   906.8     930.227        14.94           19.05           84.33          71.67            65.29  
Investor group                    133.0     122.732        29.17           29.17           25.25          26.53            67.57  
Mnfr automobile parts              89.8      87.260        33.33           33.33           77.78          70.67            82.86  
Develop software                  253.7     225.830         5.40           20.73           16.49          22.40           -24.55  
Real estate investment trust     2055.9    2095.266         2.56            8.70           20.39          30.15            45.63   

Merger Premiums to Market Value Analysis
Mergers with Target Price Equal to or Greater than $1
Announced and Completed 1/1/96 - 2/3/99
(continued)

====================================================================================================================================
Date         Date          
Announced    Effective    Target Name                       Target Business Description             Acquiror Name
- ------------------------------------------------------------------------------------------------------------------------------------

12/11/97     01/20/98     TriMas Corp                       Mnfr specialty closures, caps           MascoTech Inc
12/12/97     05/29/98     Lukens Inc                        Mnfr steel plates                       Bethlehem Steel Corp
12/15/97     03/27/98     Gulf South Medical Supply Inc     Wholesale medical supplies              Physician Sales & Service Inc
12/15/97     05/01/98     Piper Jaffray Cos                 Investment bank, holding co             US Bancorp, Minneapolis, MN
12/15/97     03/02/98     Sano Corp                         Mnfr pharmaceuticals                    Elan Corp PLC
12/16/97     05/08/98     Ambassador Apartments Inc         Real estate investment trust            Apartment Investment & Mgmt Co
12/16/97     01/30/98     Spine-Tech Inc                    Mnfr spiral implants                    SulzerMedica (Gebrueder Sulzer)
12/17/97     04/08/98     Oasis Residential Inc             Real estate investment trust            Camden Property Trust
12/17/97     01/23/98     Suburban Ostomy Supply Co Inc     Whl medical and hospital equip          InvaCare Corporation
12/19/97     03/30/98     ASR Investments Corp              Real estate investment trust            United Dominion Realty Tr Inc
12/19/97     06/17/98     Chemi-Trol Chemical Co            Mnfr steel pressure tanks               Harsco Corp
12/19/97     04/20/98     Continental Homes Holding         Construct, design homes                 DR Horton Inc
12/19/97     05/01/98     IPC Information Systems Inc       Mnfr telecommunications equip           Cable Systems International
12/19/97     01/20/98     Showboat Inc                      Own, operate hotel casinos              Harrah's Entertainment
12/19/97     01/27/98     Software Artistry Inc             Develop help-desk software              Tivoli Systems Inc (IBM Corp)
12/19/97     02/03/98     Symetrics Industries Inc          Mnfr communications equip               Tel-Save Holdings Inc
12/22/97     05/21/98     Dynatech Corp                     Mnfr test, analysis products            Investor Group
12/22/97     09/30/98     Essex County Gas                  Gas utility                             Eastern Enterprises
12/23/97     04/01/98     Union Corp                        Pvd adjustment collection svcs          Outsourcing Solutions Inc
01/01/98     07/31/98     GoodMark Foods Inc                Produce meat snacks                     ConAgra Inc
01/05/98     07/17/98     La Quinta Inns Inc                Own, op motor inns                      Meditrust Acquisition Co
01/05/98     10/26/98     Southern New England Telecomm     Provide telecommun services             SBC Communications Inc
01/06/98     04/01/98     Schult Homes Corp                 Manufacture mobile homes                Oakwood Homes Corp
01/08/98     01/30/98     Rayonier Timberlands LP           Own, op timber tracts                   Rayonier Inc
01/08/98     07/23/98     Teleport Communications Group     Pvd telecommunication services          AT&T Corp
01/09/98     09/30/98     Wandel & Goltermann Tech Inc      Mnfr network equipment                  Wandel & Goltermann Management
01/12/98     02/19/98     Computer Language Research Inc    Dvlp tax processing software            Research Institute of America
01/14/98     06/01/98     Continental Can Co Inc            Mnfr metal plastic cans                 Suiza Foods Corp
01/14/98     06/19/98     Price REIT Inc                    Real estate investment trust            Kimco Realty Corp
01/19/98     04/24/98     USF&G Corp                        Insurance holding company               St Paul Companies Inc
01/20/98     10/05/98     Buttrey Food and Drug Stores      Own, op supermarkets, drug store        Albertson's Inc
01/20/98     04/16/98     NACT Telecommunications(GST)      Pvd telephone commun svcs               World Access Inc
01/20/98     05/27/98     Regal Cinemas Inc                 Pvd movie exhibition services           Investor Group
01/21/98     05/22/98     Thermadyne Holdings Corp          Mnfr welding equip, indl mach           DLJ Merchant Bkg Partners II
01/23/98     04/13/98     Handy & Harman                    Mnfr, whl metal wire, cable             WHX Corp
01/26/98     06/11/98     Digital Equipment Corp            Mnfr computers, equip                   Compaq Computer Corp
01/27/98     03/03/98     State of the Art Inc              Develop financial software              Sage Group PLC
02/02/98     03/27/98     BGS Systems Inc                   Develop utilities software              BMC Software Inc
02/02/98     03/31/98     Pacific Scientific Co             Manufacture electric motors             Danaher Corp
02/02/98     04/20/98     Source Services Corp              Provide help supply services            Romac International Inc
02/04/98     03/20/98     Industrial Acoustics Inc          Mnfr noise reducing products            IAC Holdings Corp
02/09/98     03/31/98     Arbor Drugs Inc                   Own, operate drug stores                CVS Corp
02/09/98     06/15/98     Culligan Water Technologies       Mnfr, whl purification products         United States Filter Corp
02/09/98     04/16/98     Summit Care Corp                  Provide nursing services                Fountain View(Heritage)
02/10/98     06/04/98     Illinois Central Corp             Railroad transportation svcs            Canadian National Railway Co
02/11/98     06/10/98     MTL Inc                           Pvd tank truck carrier svcs             Sombrero Acquisition Co
02/11/98     05/20/98     Waverly Inc                       Publish books, periodicals              Wolters Kluwer NV
02/16/98     08/04/98     Coherent Communications Sys       Mnfr voice enhancement prods            Tellabs Inc

Premimum
Value of   Enterprise __________________________________________________________________________   
Acquiror                      Transaction     Value     1 Day prior    1 Wk. Prior     4 Wks Prior    3 Mths Prior   1 Year Prior   
Business Description              ($ mil)      ($ mil)  to Annc. Date  to Annc. Date   to Annc. Date  to Annc. Date  to Annc. Date  
- ----------------------------------------------------------------------------------------------------------------------------------  

Mnfr motor vehicle components       911.7      1384.002      12.65        9.96         18.97             13.58          42.27      
Manufacture steel products          700.2       751.934      92.00       94.33         69.61             48.61          64.38      
Wholesale medical equipment         678.9       629.501      38.50       21.97         16.04             49.07          36.44      
Bank holding company                767.8       991.438      25.21       24.17         54.01             44.66         132.81      
Mnfr drug delivery systems          396.8       395.981      52.71       42.64         95.13             71.32         105.08      
Real estate investment trust        663.0       620.978       4.44        5.42          5.42            -13.30           4.10      
Mnfr medical implants               621.1       618.513      14.29       52.94         55.81             16.20         121.28     
Real estate investment trust        395.2       825.507       9.47       10.72          7.95             -2.60          12.32     
Mnfr surgical, medical supplies     130.8       128.543       8.05       13.25         13.25             22.08           2.17     
Real estate investment trust        277.0       264.202       4.38        1.09          2.56             -5.16           3.76     
Mnfr scaffolding, pipes              46.1        55.830      61.40       61.40         64.29             75.24         113.95     
Construct residential bldgs         590.2       569.494      26.28       27.64         35.97             61.02         114.69     
Mnfr telecommun equip               201.7       252.027      14.29       31.25         14.29            100.00         182.35     
Own, op hotel casinos              1147.6       987.484                  66.78         62.91             50.46          67.35     
Dvlp systems mgmt software          201.9       190.512                  61.98         57.43             67.52         237.93     
Pvd telecommunications svcs          25.0        31.514                  36.36         172.73           114.29         110.53     
Investor group                      762.9       783.400      29.93       37.16         29.93            -42.38         -41.41     
Gas utility holding company          79.2       117.581      26.56       55.46         61.17             74.73          97.44     
Pvd outsourcing svcs                193.0       202.637      14.55       13.51         23.53             29.90          41.57     
Produce meats, eggs, cooking oil    217.8       230.600      54.49       75.88         69.36             68.12          73.21     
Real estate investment trust       2907.5      3040.501      28.40       35.95         35.95             47.00          41.50     
Provide telecommun services        5828.3      5806.816      32.65       35.72         42.90             51.99          70.43     
Mnfr, ret factory-built homes       101.4       104.041       1.12       10.43         19.21             25.00          15.51     
Manufacture logs, timber             65.8       482.257      11.23       25.30         17.51            -13.33     
Own, op telecommunications sys    11187.7     11030.733      -2.45        1.72         16.96             20.38          76.12     
Investment management svcs           34.2        72.500      23.50       21.14         31.13             57.04         -42.44     
Publish tax law information         325.4       320.430      60.71       62.16         69.81           1025.00         767.47     
Produce milk, related prod          330.5       334.437      45.83       74.37         71.16             72.98         198.35     
Real estate investment trust        870.6       804.794      13.48       14.33         18.21             17.50          26.42     
Insurance holding company          3782.2      3382.590      18.19       22.47         14.51             17.52          18.55     
Supermarkets, department stores     139.2       175.706      44.19       44.19         47.62             39.33          89.31     
Pvd telecommunication services       53.1       144.629      12.00       12.45         16.67             20.69                     
Investor group                     1462.7      1408.724      14.29       10.71         34.78             19.23          29.17     
Merchant banking firm               790.0       742.650      19.48       21.05         18.46             15.72          30.19     
Mnfr steel and steel prods          625.1       613.196       8.67       14.63          1.62             30.56         118.60     
Manufacture personal computers     9123.7      8620.004      32.06       50.25         62.45             25.65          61.07     
Dvlp, whl accounting software       245.2       244.444      33.33       35.39         35.39             38.58          57.14     
Develop software                    306.9       288.511      23.29       32.35         42.86             37.93          57.89     
Mnfr tools, control equipment       417.5       484.560      20.40       21.91         28.72             96.75         122.02     
Pvd specialty staffing svcs         454.4       431.094      51.12       56.69         50.24             59.65         140.98     
Investment company                   25.9        48.961                   4.76         10.00             10.00           2.33     
Own and operate drug stores        1423.2       957.178       1.86       14.12         18.13             30.81          82.45     
Mnfr water treatment equip         1474.3      1927.567      57.49       62.89         27.35             43.47          56.96     
Own, op healthcare facilities       275.1       276.923      14.29       31.25         37.71             27.27          97.65     
Pvd railroad services              2931.0      2996.582      10.64       20.00         18.86              8.71          17.74     
Investment company                  250.1       250.358      37.93       38.53         56.10             46.79          79.78     
Publish newspapers, books           375.6       390.052      42.47       50.73         50.73             -3.11          77.27     
Mnfr voice, data transport sys      664.3       514.177      30.36       43.23         81.37             40.24         104.76

Merger Premiums to Market Value Analysis
Mergers with Target Price Equal to or Greater than $10 per Share
Announced and Completed 1/1/96 - 2/3/99
(continued)
====================================================================================================================================

Date       Date      
Announced  Effective  Target Name                       Target Business Description                Acquiror Name
- ------------------------------------------------------------------------------------------------------------------------------------

02/17/98   05/27/98   Devan Group Inc                    Pvd graphic arts services                 Applied Graphics Technologies
02/17/98   06/11/98   Zum Industries Inc                 Mnfr environmental equipment              US Industries Inc
02/18/98   11/25/98   National Income Realty Trust       Real estate investment trust              Tarragon Realty Investors
02/18/98   06/27/98   Republic Automotive Parts Inc      Mnfr, whl automotive parts                Keystone Automotive Inds Inc
02/19/98   08/07/98   Enex Resources Corp                Oil and gas traders                       Middle Bay Oil Company Inc
02/19/98   04/21/98   Mastering Inc                      Provide computer training services        PLATINUM Technology Inc
02/23/98   06/30/98   Money Store Inc                    Provide mtg svcs loans                    First Union Corp. Charlotte, NC
02/23/98   04/28/98   Trusted Information Systems        Develop security software                 Network Associates Inc
02/24/98   04/06/98   Wonderware Corp                    Dvlp process control software             Siebe PLC
02/26/98   09/30/98   Dresser Industries Inc             Mnfr oil & gas field machinery            Halliburton Co
03/02/98   08/03/98   Benchmarq Microelectronic Inc      Mnfr microprocessors                      Unitrode Corp
03/02/98   08/17/98   Deep Tech International            Oil and gass exploration prodn            El Paso Natural Gas Co
03/02/98   05/19/98   Scopus Technology Inc              Dvlp Client/server software               Siebel Systems Inc
03/03/98   05/27/98   EVI Weatherford Inc                Provide oil field services                EVI Inc
03/05/98   05/20/98   XLConnect Solutions Inc            Pvd integrated sys design svc             Zerox Corp
03/06/98   07/31/98   Alumax Inc                         Mnfr aluminum products                    Alcoa
03/06/98   09/11/98   United Dental Care Inc             Pvd dental svcs to subscribers            Protective Life Corp
03/09/98   06/05/98   LCI International Inc              Pvd telecommunications svcs               Qwest Communications Corp
03/09/98   06/25/98   Pri Cellular Corp                  Pvd cellular telephone svcs               American Cellular Corp
03/10/98   06/05/98   Portec Inc                         Mnfr railroad track components            J Richard Industries Inc
03/11/98   07/16/98   Waste Management Inc               Pvd chemical waste mgmt svcs              USA Waste Services Inc
03/12/98   04/20/98   Metromail Corp                     Pvd direct-mail advg svcs                 Great Universal Stores PLC
03/13/98   07/31/98   MedCath Inc                        Pvd cardiology related svcs               Investor Group
03/16/98   08/03/98   American General Hospitality       Real estate investment trust              CapStar Hotel Co
03/16/98   05/28/98   Logic Works Inc                    Develop client/server software            PLATINUM Technology Inc
03/16/98   10/30/98   Norwood Promotional Products       Mnfr hats, promotional prods              FPK LLC
03/16/98   07/01/98   360 Communications Co              Pvd telecommunication svcs                ALLTEL Corp
03/17/98   07/31/98   BET Holdings Inc                   Own and operate TV stations               Investor Group
03/17/98   05/27/98   ForeFront Group Inc                Develop software                          CBT Group PLC
03/18/98   06/30/98   Medusa Corp                        Manufacture cement                        Southdown Inc
03/24/98   08/17/98   Insilco Corp                       Mnfr auto, elec, & electn parts           DLJ Merchant Bkg Partners II
03/24/98   06/24/98   Walsh International Inc            Provide programming svcs                  Cognizant Corp
03/27/98   07/01/98   Grand Prix Assoc Of Long Beach     Own, op motorsport facilities             Dover Downs Entertainment Inc
03/27/98   07/15/98   Intl Specialty Prods               Mnfr specialty chemicals                  ISP Holdings Inc
03/30/98   05/11/98   Children's Discovery Centers       Operte child care centers                 Knowledge Beginnings Inc
04/02/98   06/30/98   Security Capital Atlantic Inc      Real estate investment trust              Security Capital Pacific Trust
04/06/98   07/10/98   MoneyGram Payment Systems Inc      Pvd money wire transfer svce              Viad Corp
04/06/98   07/31/98   Zero Corp                          Manufacture metal encasements             Applied Power Inc
04/07/98   06/30/98   Beneficial Corp                    Pvd consumer financing svcs               Household International Inc
04/07/98   06/30/98   Green Tree Financial Corp          Pvd consumer, coml finance svcs           Conseco Inc
04/08/98   05/19/98   Blessings Corp                     Mnfr plastic film products                Huntsman Packaging Corp
04/09/98   07/27/98   Claremont Technology Group Inc     Pvd comp integrated sys svc               Complete Business Solutions
04/09/98   05/15/98   Dart Group Corp                    Own, operate auto part stores             Richfood Holdings Inc
04/13/98   07/31/98   Mariner Health Group Inc           Provide sub-acute care svcs               Paragon Health Network Inc
04/15/98   08/11/98   Harborside Healthcare Corp         Pvd long-term med services                Investcorp
04/16/98   09/28/98   Award Software International       Develop software                          Phoenix Techologies Ltd
04/20/98   09/15/98   Atria Communities Inc              Provide residential care svcs             Kapson Senior Quarters Corp
04/20/98   01/04/99   Corrections Corp of America        Own, op correctional facilities           CCA Prison Realty Trust

Premium
Value of   Enterprise  ---------------------------------------------------------------------------
Acquiror                       Transaction        Value  1 Day Prior    1 Week Prior    4 Weeks Prior  3 Months Prior  1 Year Prior
Business Description                ($mil)       ($mil)  to Annc. Date  to Annc. Date   to Annc. Date  to Annc. Date   to Annc. Date
- ------------------------------------------------------------------------------------------------------------------------------------

Pvd digital prepress services        474.4         25.318      29.19         32.03         37.91            52.10         108.07
Mfnr consumer building prods         790.8        699.542      19.53         22.00         36.05            28.17          80.82
Operate real estate agencies          77.0        246.069      22.92         17.89         20.12            18.33          67.71
Whl auto parts and supplies           62.8         85.900      33.03         33.33         28.57            20.00           9.09
Oil and gas explorations, prodn       17.3    np               21.21         30.44         37.93            30.43          46.34
Develop integrated software          198.7        180.540      31.58         25.00         33.33            36.99          -1.96
Commercial bank holding co          2215.2       3631.373      37.26         28.50         87.43            34.20          25.81
Develop network software             322.1        255.453      59.92         84.59         92.29           119.76          25.21
Mnfr appliance controls              362.7        343.256      50.00         59.34         79.44            32.41         125.88
Mnfr oil field machinery            7783.2       8429.126      13.73         15.03         18.32            17.73          43.09
Mnfr semiconductors, capacitors      150.6        145.097      15.77         14.02         67.22             4.86           5.97
Oil and gas exploration, prodn       375.4        526.645       8.74          9.80         15.46            30.23         138.30
Dvlp sales automation software       490.7        455.875      58.51         93.64        100.13            84.66           2.35
Mnfr oil field products             2670.7       2826.429      39.85         59.59         41.33             6.18          74.50
Mnfr business machine, fin co         93.0        353.571     -11.11         15.11         22.14            19.40         180.70
Manufacture aluminum products       3944.2       3698.414      35.08         33.26         36.25            52.85          30.83
Insurance company holding co         180.4        174.664      20.49         49.18         57.43            51.34         -30.69
Pvd telephone commun svcs           4401.4       4808.210      22.18         24.21         54.84            55.20         133.33
Pvd cellular commun services        1385.2       1070.547       7.69         16.67         16.06            23.76          58.87
Investment firm                       76.5         79.772       8.48         13.78         10.35            13.27          43.82
Pvd waste disposal services        13313.6      19980.864      12.62         15.78         15.78             5.07         -12.03
Own, op mail order house             837.9        830.340      32.69         28.37         30.19            77.49         117.32
Investor group                       227.8        354.054      15.15         10.95         34.51            26.67          26.67
Own, operate hotels                 1211.8        979.193      56.60         58.43         52.01            37.49          27.67
Develop integrated software          212.9        190.349      12.96         36.18         57.13            70.22         131.25
Investment company                   107.8        164.262      19.14         19.14         23.58            38.00          40.34
Pvd telecommunication svcs          5948.6       6021.367      15.41         30.39         49.84            68.97          84.49
Investor group                       462.3        768.073      53.66         58.49         58.24            17.76         109.13
Dvlp educational software            147.5        127.126      17.27         29.36         48.50            81.91         258.63
Mnfr cement, limestone mining       1052.5       1084.117      17.16         24.29         35.28            53.29          60.58
Merchant banking firm                425.3        446.509       4.65         11.11         12.85                    
Pvd information services             176.8        179.217                    36.84         53.33            59.10         105.29
Own, op race track, casinos           91.0        114.964      11.81         22.06         21.55            31.37          42.21
Mnfr industrial chemicals            324.5       2125.805       4.29          1.74         14.51            22.18          43.14
Own, operate child care centers       89.1         98.063      20.99         16.67         25.64            28.95         139.02
Real estate investment trust        1681.4       1747.998      14.88         14.88         14.20            12.56          10.31
Provide food catering services       293.6        243.166      11.49         15.67         42.36            61.40          87.57
Mnfr tools, equip, consumables       431.6        300.987      16.46         17.99         33.18            24.56          84.27
Provide financial services          8703.8      21243.125      82.38         82.10         86.06                    
Insurance holding company           7358.8       8536.398      82.51         86.12         94.23           110.14          60.39
Prod printed, laminated films        269.7        244.612      18.73         18.31         34.94            41.77         118.18
Pvd computer programming svcs        282.5        278.527      21.35         77.05        118.18            60.00          21.35
Wholesale groceries                  193.3        445.522      14.29         11.89         19.40            46.79          71.81
Own, op nursing care facilities      622.3       1216.454       6.04         10.88         28.98            27.42         139.39
Investment firm                      263.2        280.422      18.34         22.70          5.82            35.59         117.39
Develop systems software             129.5        101.809      12.83         21.34         53.12            96.40          44.54
Provide residential care svcs        238.9        501.892       2.53          7.29         -0.31            16.13          82.02
Real estate investment trust        3274.2       3321.115       4.80          0.13          1.58

MERGER PREMIUMS TO MARKET VALUE ANALYSIS
MERGERS WITH TARGET EQUAL TO OR GREATER THAN $10 PER SHARE
ANNOUNCED AND COMPLETED 1/1/96 - 2/3/99
(CONTINUED)
================================================================================

Date           Date         
Announced   Effective    Target Name                          Target Business Description           Acquiror Name  
- -----------------------------------------------------------------------------------------------------------------------------------

04/06/98    07/10/98     MoneyGram Payment Systems Inc        Pvd money wire transfer svcs          Viad Corp
04/06/98    07/31/98     Zero Corp                            Manufacture metal encasements         Applied Power Inc
04/07/98    06/30/98     Beneficial Corp                      Pvd consumer financing svcs           Household International Inc 
04/07/98    06/30/98     Green Tree Financial Corp            Pvd consumer coml finance svcs        Conseco Inc
04/08/98    05/19/98     Blessings Corp                       Mnfr plastic film products            Huntsman Packaging Corp
04/09/98    07/27/98     Claremont Technology Group Inc       Pvd comp integrated sys svc           Complete Business Solutions 
04/09/98    05/15/98     Dart Group Corp                      Own, operate auto part stores         Richfood Holdings Inc
04/13/98    07/31/98     Mariner Health Group Inc             Provide sub-acute care svcs           Paragon Health Network Inc  
04/15/98    08/11/98     Harborside Healthcare Corp           Pvd long-term med services            Investcorp
04/16/98    09/28/98     Award Software International         Develop software                      Phoenix Technologies Ltd     
04/20/98    09/15/98     Atria Communities Inc                Provide residential care svcs         Kapson Senior Quarters Corp  
04/20/98    01/04/98     Corrections Corp of America          Own, op correctional facilities       CCA Prison Realty Trust      
04/21/98    08/25/98     PCA International Inc                Pvd photo processing services         Investor Group               
04/21/98    06/24/98     Tracor Inc                           Mnfr defense electronics              General Electric Co PLC      
04/27/98    07/09/98     Fluke Corp                           Mnfr electronic test equipment        Danaher Corp                 
04/27/98    08/30/98     Vitalink Pharmacy Services Inc       Pvd health and allied svcs            Genesis Health Ventures Inc  
04/27/98    06/01/98     Yurie Systems Inc                    Mnfr communications equip             Lucent Technologies Inc        
04/29/98    08/14/98     Neurex Corp                          Mnfr, whl biopharmaceuticals          Elan Corp PLC                  
04/30/98    11/02/98     Mycogen Corp (Dow AgroSciences)      Provide crop services                 Dow AgroSciences(Dow Chemical) 
05/04/98    07/09/98     Echlin Inc                           Mnfr, whl automotive parts            Dana Corp                      
05/04/98    06/29/98     Union Texas Petroleum Holdings       Oil and gas exploration, prodn        ARCO                           
05/06/98    09/06/98     Mountbalten Inc                      Surety insurance company              Fidelity & Deposit Co of MD    
05/06/98    07/22/98     National Surgery Centers Inc         Own and operate hospitals             HealthSouth Corp               
05/07/98    11/12/98     Chrysler Corp                        Manufacture automobiles               Daimler-Benz AG               
05/08/98    06/15/98     Authentic Speciality Foods Inc       Whl, mnfr Mexican foods               Agrobios(Desc SA de CV)        
05/11/98    12/07/98     DeKalb Genetics Corp                 Operate agricultural labs             Monsanto Co                    
05/11/98    11/18/98     Stone Container Corp                 Mnfr containerboard paper prod        Jefferson Smurfit Corp         
05/13/98    06/26/98     Sage Laboratories Inc                Mnfr electronics components           Filtronic Comtek PLC           
05/14/98    09/25/98     New Plan Realty Trust                Real estate investment trust          Excel Realty Trust Inc         
05/18/98    08/19/98     Mercantile Stores Co Inc             Own, op department stores             Dillards Inc                   
05/18/98    08/07/98     RP Scherer Corp                      Mnfr soft gelatin capsules            Cardinal Health Inc
05/18/98    08/26/98     Viking Office Products Inc           Whl, retail office products           Office Depot Inc 
05/19/98    09/28/98     ATL Products Inc(Odetics)            Mnfr computer storage devices         Quantum Corp
05/19/98    10/28/98     Giant Food Inc                       Own, op supermarkets                  Koninklijke Ahold NV
05/19/98    11/16/98     QuesTech Inc                         Sys engineering, tech services        CACI International Inc
05/20/98    10/22/98     National Gas & Oil Co                Gas utility, gas expl and prod        Licking Rural Electrification
05/25/98    10/01/98     US Surgical Corp                     Manufacture surgical staples          Tyco International Ltd  
05/26/98    08/24/98     Hyperion Software Corp               Dvlp software                         Arbor Software Corp     
05/27/98    09/17/98     May & Speh Inc                       Pvd computer-based direct mktg        Acxiom Corp
05/28/98    07/07/98     Donnelley Enterprise Solutions       Pvd info management services          Bowne & Co Inc
06/04/98    11/13/98     Allied Life Financial Corp           Insurance co holding co               Nationwide Mutual Insurance Co
06/04/98    11/03/98     Cable Michigan Inc                   Pvd cable TV svcs                     Avalon Cable 
06/04/98    09/08/98     DSC Communications Corp              Dvlp, mnfr digital telecom sys        Alcatel Alsthorn CGE
06/04/98    07/20/98     Pollo Tropical Inc                   Own and operate restaurants           Carrols Corp
06/04/98    11/30/98     Telco Systems Inc                    Mnfr telecommunications prods         World Access Inc

Value of   Enterprise                         Premium   
-------------------------------------------------
Date        Acquiror                           Transaction        Value      1 Day Prior      1 Week Prior    4 Weeks Prior
Announced   Business Description                   ($ mil)      ($ mil)     to Annc. Date    to Annc. Date    to Annc. Date 
- ----------------------------------------------------------------------------------------------------------------------------

04/06/98    Provide food catering services           293.6      243.166             11.49            15.67            42.36 
04/06/98    Mnfr tools, equip, consumables           431.6      300.987             16.46            17.99            33.18 
04/07/98    Provide financial services              8703.8    21243.125             82.38            82.10            86.06 
04/07/98    Insurance holding company               7358.8     8536.398             82.51            86.12            94.23 
04/08/98    Prod printed, laminated films            269.7      244.612             18.73            18.31            34.94
04/09/98    Pvd computer programming svcs            282.5      278.527             21.35            77.05           118.18  
04/09/98    Wholesale groceries                      193.3      445.522             14.29            11.89            19.40  
04/13/98    Own, op nursing care facilities          622.3     1216.454              6.04            10.88            28.98  
04/15/98    Investment firm                          263.2      280.422             18.34            22.70             5.82  
04/16/98    Develop systems software                 129.5      101.809             12.83            21.34            53.12  
04/20/98    Provide residential care svcs            238.9      501.892              2.53             7.29            -0.31  
04/20/98    Real estate investment trust            3274.2     3321.115              4.80             0.13             1.58  
04/21/98    Investor group                           232.5      270.001             23.26            17.78            20.46  
04/21/98    Mnfr radios and televisions             1323.5     1359.782              9.97            16.79            25.00  
04/27/98    Mnfr tools, control equipment            718.9      657.508             61.73            61.29            57.90  
04/27/98    Own, op geriatric facilities             678.4      677.472             13.57            12.15             6.51  
04/27/98    Mnfr telecom equip, software            1044.1     1034.861             11.11            17.40            49.73  
04/28/98    Mnfr drug delivery systems               824.5      778.466             65.56            46.75            41.40  
04/30/98    Manufacture insecticides                 355.2     1052.306             41.77            40.00            52.38  
05/04/98    Mnfr motor vehicle products             4124.8     4345.068             41.48            42.86            52.78  
05/04/98    Oil and gas exploration prodn           2741.4     3376.306             41.46            46.84            36.47  
05/06/98    Surety insurance co                       43.4       41.431              2.46             6.18             4.29  
05/06/98    Own, op outpatient surgery ctr           703.1      634.647             17.56            16.00            29.08  
05/07/98    Mnfr, whl automobiles & trucks         40466.5    49376.995             48.84            54.25            45.73  
05/09/98    Mnfr, whl foods products                 141.9      148.080              6.25            13.33            37.37  
05/11/98    Mnfr agro chems, manmade fibers         2262.7     3275.717            201.89           199.63           255.56  
05/11/98    Manufacture paperboard prod             2229.6     6705.091             44.32            46.27            59.96  
05/13/98    Mnfr mobile telephone devices             20.2       16.273             37.26            34.62            35.92  
05/14/98    Real estate investment trust            1715.3     2270.329             13.43            15.44            14.29  
05/18/98    Own, op department stores               2943.1     3022.020              9.12             9.59            15.42
05/19/98    Whl pharmaceutical products             2541.6     2503.864             17.47            23.34            30.06
05/19/98    Own, op stationery stores               3082.2     3033.551             43.86            42.38            44.24 
05/19/98    Manufacture disk drives                  304.0      353.056              8.41            18.97            45.00 
05/19/98    Own, operate supermarkets               2633.5     2792.066             14.10            12.60            14.29
05/19/98    Pvd computer engineering svcs             43.8       40.114             25.03            42.20            52.67
05/20/98    Electric utility                          93.0      116.721              6.67            18.18            26.06
05/25/98    Mnfr fire protection systems            3394.2     3969.778              7.91            25.73            39.73
05/26/98    Dvlp software                            837.3      751.400              4.97             3.78            -3.57
05/27/98    Provide on-line database svcs            502.5      533.176              2.65            12.58            20.35
05/29/98    Pvd printing svcs                        105.2      114.540             60.77            61.54            83.61
06/04/98    Insurance company                         89.9      165.263              4.35            13.74            26.32
06/04/98    Pvd cable TV services                    291.2      415.924             14.89            14.89            23.19
06/04/98    Mnfr telephone commun equip             4685.3     5084.934             21.64           111.91            98.67
06/04/98    Own and operate restaurants               94.6       93.282             10.00             7.32            18.12
06/04/98    Pvd telecommunication services           194.5      183.393             77.78            65.85            63.86

-------------------------------     
Date           3 Months Prior    1 Year Prior
Announced      to Annc. Date    to Annc. Date 
- ----------------------------------------------

04/06/98                61.40           87.57 
04/06/98                24.56           84.27 
04/07/98                                       
04/07/98               110.14           60.39 
04/08/98                41.77          118.18
04/09/98                60.00           21.35
04/09/98                46.79           71.81
04/13/98                27.42          139.39
04/15/98                35.59          117.39
04/16/98                96.40           44.54 
04/20/98                16.13           82.02
04/20/98                                       
04/21/98                19.10           80.43
04/21/98                33.89          100.00
04/27/98                64.84           64.38
04/27/98                 6.51           23.29
04/27/98                62.55          268.42
04/28/98                88.20          197.27
04/30/98                35.76           54.48
05/04/98                49.41           67.94
05/04/98                49.68           53.64
05/06/98                24.26           66.86
05/06/98                37.17           66.68
05/07/98                15.29           68.36
05/09/98                20.35                
05/11/98               201.89          212.20
05/11/98                64.87           88.84
05/13/98                38.61           29.63
05/14/98                11.49           29.55
05/18/98                19.40           56.48
05/19/98                51.76           83.76
05/19/98                49.74          107.16
05/19/98               101.74          197.44
05/19/98                20.70           30.30
05/19/98               205.35          137.77
05/20/98                18.18           58.33
05/25/98                51.62           35.01
05/26/98                -1.79          114.87
05/27/98                34.23           58.64
05/29/98               118.18          102.41
06/04/98                40.35           77.12
06/04/98                65.31                 
06/04/98               105.08           46.71
06/04/98                37.50           66.04
06/04/98                67.90           58.14

Page F - 19

MERGER PREMIUMS TO MARKET VALUE ANALYSIS
MERGERS WITH TARGET PRICE EQUAL TO OR GREATER THAN $10 PER SHARE 
ANNOUNCED AND COMPLETED 1/1/96-2/3/99
(continued)

====================================================================================================================================

Date           Date                                                                                                     
Announced   Effective    Target Name                        Target Business Description             Acquiror Name       
- ------------------------------------------------------------------------------------------------------------------------------------

06/08/98    10/15/98     CapStone Capital Corp              Real estate investment trust            Healthcare Realty Trust Inc
06/10/98    08/18/98     Ceanic Corp                        Pvd sub sea services products           Stolt Comex Seaway SA
06/10/98    09/25/98     Manor Care Inc                     Own, op nursing homes, hotels           Health Care and Retirement
06/10/98    07/31/98     Plenum Publishing Corp             Publish technical journals              Wolters Kluwer NV
06/12/98    10/26/98     McDonald & Co Investment Inc       Investment bank                         KeyCorp, Cleveland Ohio
06/12/98    07/21/98     Triangle Pacific Corp              Mnfr,whl wood cabinets                  Armstrong World Industries Inc
06/15/98    08/31/98     Bay Networks Inc                   Mnfr,whl data networking prods          Northern Telecom Ltd(BOE Inc)
06/16/98    08/31/98     Personnel Management Inc           Employment agency                       Linsalata Capital Partners
06/17/98    09/24/98     Intersolv Inc                      Develop software products               Micro Focus Group PLC
06/17/98    09/08/98     Nimbus CD International Inc        Mnfr compact discs                      Carlton Communications PLC
06/18/98    07/28/98     ARCO Chemical Co(ARCO)             Mnfr,whl intermediate chems             Lyondell Petrochemical Co
06/18/98    09/24/98     PMT Services Inc                   Pvd credit card services                NOVA Corp
06/19/98    08/31/98     Carnco International Inc           Mnfr oil, gas field equipment           Schlumberger Technology Corp
06/19/98    12/21/98     General Re Corp                    Insurance holding company               Berkshire Hathaway Inc
06/22/98    08/31/98     Broderbund Software Inc            Dvlp,whl educational software           Learning Co Inc
06/22/98    12/15/98     Special Devices Inc                Manufacture surgical implants           JF Lehman & Co 
06/24/98    10/05/98     Penederm Inc                       Mnfr pharmaceutical products            Mylan Laboratories Inc
06/25/98    09/22/98     Dawson Production Services Inc     Oil and gas exploration,prodn           Key Energy Group Inc
06/29/98    12/31/98     Grand Casinos Inc                  Own and operate casinos                 Hilton Hotels Corp
06/29/98    09/30/98     Physio-Control International       Mnfr,whl cardiac defibrillator          Medtronic Inc
06/30/98    09/30/98     Summit Holding Southeast Inc       Pvd management services                 Liberty Mutual Group
07/01/98    08/20/98     Leog Inc                           Provide management services             Metzlar Group Inc
07/02/98    01/08/98     Centennial Cellular Corp           Pvd wireless telecommun svcs            Investor Group
07/03/98    09/18/98     Saks Holdings(Investcorp BK)       Own and operate dept stores             Proffit's Inc
07/08/98    10/20/98     Merry Land & Investment Co Inc     Real estate investment trust            Equity Residential Pptys Trust
07/09/98    10/28/98     Eltron International Inc           Mnfr computer printers                  Zebra Technologies Corp
07/17/98    09/02/98     DeCrane Aircraft Holdings Inc      Mnfr avionics Components                DLJ Merchant Banking Inc
07/20/98    10/06/98     General Signal Corp                Mnfr electric control equip             SPX Corp
07/21/98    11/05/98     Depuy Inc(Corange Ltd)             Mnfr orthopedic devices                 Johnson & Johnson
07/23/98    10/30/98     IMNET Systems Inc                  Develop imaging software                HBO & Co
07/27/98    11/30/98     Life Re Corp                       Reinsurance company                     Swiss Reinsurance Co
07/29/98    10/02/98     ATL Ultrasound Inc                 Mnfr medical imaging products           Philips Electronics Nv
07/30/98    10/15/98     BetzDearbom Inc                    Mnfr,whl water treatment chems          Hercules Inc
08/03/98    11/17/98     Freeport-McMcRan Sulphur Inc       Reinsurance company                     McMcRan Oil & Gas Co
08/03/98    01/04/98     Priority Healthcare Corp           Mnfr medical imaging products           Shareholders
08/03/98    10/20/98     Stratus Computer Inc               Mnfr,whl water treatment chems          Ascend Communications Inc
08/03/98    09/02/98     Zeigler Coal Holding Co            Coal mining holding company             AEI Resources Inc
08/06/98    01/19/98     Equity Corp International          Pvd healthcare services                 Service Corp International
08/10/98    10/15/98     American Disposal Services Inc     Pvd waste disposal services             Allied Waste Industries Inc
08/10/98    12/07/98     Cliffs Drilling Co                 Pvd oil well drilling services          R&B Falcon Corp
08/10/98    09/21/98     Molecular Dynamics Inc             Mnfr,whl laboratory equipment           Amersham Pharmecia Biotech Ltd
08/10/98    01/04/98     Rio Hotel & Casino Inc             Own,operate casino hotel                Harrah's Entertainment
08/11/98    12/31/98     Amoco Corp                         Oil and gas exploration prodn           British Petroleum Co PLC(BP)
08/13/98    12/03/98     Clearview Cinema Group Inc         Own and operate movie theaters          Cablevision Systems Corp
08/17/98    12/31/98     Eastern Environmental Services     Pvd waste collection svcs               Waste Management Inc
08/17/98    12/31/98     Westoo Bancorp Inc, IL             Federal savings institution             MAF Bancorp, Claredon Hill,IL
08/24/98    01/06/98     General Microwave Corp             Mnfr microwave test equipment           Herley Industries Inc
08/27/98    10/13/98     Berg Electronics Corp              Mnfr electronic connectors              Framastone Connectors Intl
09/02/98    12/01/98     Altron Inc                         Mnfr,mid circuit board prods            Sanmina Corp

====================================================================================================================================

Value of    Enterprise                              Premium
-----------------------------------------------------
Date           Acquiror                           Transaction         Value    1 Day Prior       1 Week Prior        4 Weeks Prior
Announced      Business Description                   ($ mil)        ($mil)  to Annc. Data      to Annc. Data        to Annc. Data
- ----------------------------------------------------------------------------------------------------------------------------------

06/08/98       Real estate investment trust            971.4       883.641            5.09               4.52                 0.97
06/10/98       Pvd oil/gas contracting svcs            222.8       247.207           29.56              34.45                
06/10/98       Own,operate nursing homes              2474.4      2986.162           21.77              25.31                17.97
06/10/98       Publish newspapers, books               258.0       206.772            6.52               6.72                10.73
06/12/98       Bank holding company                    577.4       629.492            0.68               2.74                 7.36
06/12/98       Mnfr interior furnishings              1124.3      1124.592           26.14              26.50                24.02
06/15/98       Mnfr telecommunications equip          9268.6      9008.959           34.97              18.49                44.88
06/16/98       Investment firm                          34.9        37.497           25.49              23.08                23.08
06/17/98       Manufacture lenses, computers           532.0       511.381           56.16              41.05                52.09
06/17/98       Pvd motion picture prodn svcs           264.9       282.573            6.98               5.75                10.84
06/18/98       Mnfr petrochems, polyolefins           5645.7      6512.535           14.22              12.27                 3.36
06/18/98       Pvd information retreival svcs         1266.6      1238.701           21.98              35.54                31.98
06/19/98       Develop software                       3376.3      3307.250           32.57              39.88                19.50
06/19/98       Property,casualty insurance co        22337.9     24441.855           23.59              23.00                25.05
06/22/98       Dvlp consumer software                  424.3       287.222           21.21              16.36                18.96
06/22/98       Investment bank                         277.8       279.281           -2.51               1.87
06/24/98       Mnfr,whl pharmaceuticals                193.1       190.480           38.97              39.52                88.28
06/25/98       Pvd oil well services                   348.8       320.273           40.70              50.54                66.67
06/29/98       Own and operate hotels                  811.1      1329.551            6.40               8.32                 7.16
06/29/98       Mnfr medical technology prods           529.1       543.038           19.57              31.74                31.34
06/30/98       Insurance agency                        233.4       224.557           28.16              26.32                28.16
07/01/98       Pvd business consulting svcs            294.4       272.583           46.50              48.98                41.77
07/02/98       Investor group                         1509.7      1285.381           66.83              69.39                64.36
07/03/98       Own and operate dept stores            3282.3      3381.202           34.46              39.02                40.85
07/08/98       Real estate investment trust           1986.4      2228.726           11.94              15.16                14.50
07/09/98       Mnfr bar code printing sys              287.7       282.221           25.76              34.58                57.38
07/17/98       Merchant banking firm                   181.5       273.183           30.50              28.67                33.82
07/20/98       Mnfr engine components, tools          2318.7      2309.407           19.60              22.66                19.40
07/21/98       Mnfr medical equip and prods           3487.5      3740.302           11.11              19.40                22.27
07/23/98       Dvlp healthcare software                261.5       245.860           55.63              59.30                62.50
07/27/98       Insurance co,insurance agency          1794.7      1914.551            6.74              12.09                19.50
07/29/98       Mnfr home entertainment prod            786.4       755.494           20.06              12.22                 9.78
07/30/98       Mnfr industrial chemicals              3090.3      3147.067          100.70              94.60                73.49
08/03/98       Oil and gas exploration, prodn          124.2        96.891           14.94               6.38                 4.17
08/03/98       Investor group                          437.9       533.065           99.42             101.77               127.15
08/03/98       Mnfr wide area network equip            969.7       637.103           19.11              53.34                33.41
08/03/98       Coal mining holding company             848.3       850.267           32.81              30.77                20.57
08/06/98       Own,operate funeral homes               738.3       982.106           22.03              30.12                18.03
08/10/98       Provide waste collection svcs          1066.6      1116.686           16.25              14.94                 4.27
08/10/98       Pvd contract drilling svcs              452.1       638.457           39.04              41.22                17.01
08/10/98       Mnfr,whl biotechnology prods            222.2       235.322           36.67              47.75               100.00
08/10/98       Own,op hotel casinos                    821.9       804.616            6.62              14.59                13.78
08/11/98       Integrated oil and gas company        48174.1     54767.922           22.40              25.27                22.03
08/13/98       Own,op cable TV systems                  57.8       117.343           10.23              10.21                 7.78
08/17/98       Pvd waste disposal services            1276.2      1214.831            5.47               3.85                -1.81
08/17/98       Savings and loans                        82.1       318.458           14.31               8.30                 6.43
08/24/98       Mnfr microwave components                23.5        20.921           69.41              77.78                84.62
08/27/98       Mnfr electrical connectors             1877.0      1786.017           62.32              71.25                76.10
09/02/98       Mnfr printed circuit boards             195.3       189.467           16.57               6.54                 7.70

============================================================

-------------------------------------
Date                3 Months Prior       1 Year Prior
Announced           to Annc. Data        to Annc. Data
- ------------------------------------------------------

06/08/98                     -0.07                2.85
06/10/98                     52.38               79.78
06/10/98                      4.47               21.29
06/10/98                     77.60              101.37
06/12/98                      5.79               58.68
06/12/98                                        
06/15/98                     59.21               61.74
06/16/98                     21.90               66.23
06/17/98                     24.91              161.01
06/17/98                     12.20                8.24
06/18/98                     18.92               23.20
06/18/98                     53.65               57.25
06/19/98                     36.41               51.78
06/19/98                     22.29               47.53
06/22/98                    -16.23              -19.60
06/22/98                      7.94              128.57
06/24/98                     75.12               76.89
06/25/98                     38.61               29.63
06/29/98                     10.30               24.43
06/29/98                     57.14               86.44
06/30/98                     36.08               94.12
07/01/98                     69.08              
07/02/98                    388.24              
07/03/98                    -12.07               39.55
07/08/98                     12.59               11.02
07/09/98                     43.28               20.50
07/17/98                     31.90               33.33
07/20/98                      0.28              -13.46
07/21/98                     18.64               34.62
07/23/98                     65.84              -13.17
07/27/98                     33.57               84.02
07/29/98                      4.39               26.65
07/30/98                     34.11               13.05
08/03/98                     -7.41              
08/03/98                    125.68              
08/03/98                    -23.77              -37.59
08/03/98                     17.65              -21.30
08/06/98                     11.05               14.29
08/10/98                     10.77               55.69
08/10/98                    -45.78              -46.87
08/10/98                     69.07               -6.82
08/10/98                    -13.19               18.41
08/11/98                     15.05                4.77
08/13/98                     17.58               
08/17/98                     33.00               68.75
08/17/98                      3.30               16.45
08/24/98                                        
08/27/98                     69.70               69.44
09/02/98                     23.90              -41.00

Page F - 20

MERGER PREMIUMS TO MARKET VALUE ANALYSIS

MERGERS WITH TARGET PRICE EQUAL TO OR GREATER THAN $10 PER SHARE

Announced and Completed 1/1/96 - 2/3/99

(continued)

===================================================================================================================================
DATE             DATE                                                                               
ANNOUNCED      EFFECTIVE     TARGET NAME                       TARGET BUSINESS DESCRIPTION             ACQUIROR NAME 
- -----------------------------------------------------------------------------------------------------------------------------------

09/02/98       12/17/98      CKS Group Inc                     Pvd integrated marketing svcs           USWeb Corp
09/02/98       12/10/98      Home Choice Holdings Inc          Pvd equip rental svcs                   Rent-Way Inc
09/02/98       12/21/98      USCS International Inc            Pvd customer mgmt. software, svc        DST Systems Inc
09/09/98       12/18/98      Integrated Systems Consulting     Provide consulting services             First Consulting Group Inc
09/18/98       11/20/98      Marquette Medical Systems Inc     Mnfr electromedical apparatus           GE Medical Systems
09/28/98       12/10/98      Access Health Inc                 Pvd information retrieval svcs          HBO & Co
09/29/98       10/07/98      Newmont Gold Co                   Gold mining                             Newmont Mining Corp   
10/08/98       11/24/98      Necklermedia Corp                 Publishing company                      Penton Media Inc 
10/13/98       11/20/98      Dominick's Supermarkets Inc       Own and operate supermarkets            Safeway Inc   
10/16/98       12/15/98      BRC Holdings Inc                  Develop health care software            Affiliated Computer Services
10/18/98       01/12/99      HBO & Co                          Dvlp healthcare software                McKesson Corp
10/21/98       11/30/98      Capital Factors Holdings Inc      Pvd short-term bus credit svcs          Union Planters Bk Nat Assoc
10/27/98       12/14/98      Citizens Corp (Hanover Ins Co)    Auto workers corp insurance co          Allmerica Financial Corp
11/02/98       01/27/98      Sofanor Danek Group Inc           Mnfr, whl spinal, cranial device        Medronic Inc
11/09/98       12/22/98      Global Motorsport Group Inc       Wholesale motorcycle parts              Storington Partners Inc
11/16/98       01/06/98      CelMet Co (Vulcan Materials Co)   Mnfr, whl aggregates, concrete          Vulcan Materials Co
11/30/98       01/28/99      Arterial Vascular Engineering     Manufacture stent systems               Medronic Inc
12/15/98       01/21/99      Petersen Companies Inc            Publish magazines                       EMAPPLC

VALUE OF  ENTERPRISE                        
-------------------------------       
DATE              DATE       ACQUIROR                          TRANSACTION     VALUE   1 DAY PRIOR     1 WEEK PRIOR        
ANNOUNCED       EFFECTIVE    BUSINESS DESCRIPTION                   ($MIL)     ($MIL)  TO ANNC. DATE  TO ANNC. DATE        
- ----------------------------------------------------------------------------------------------------------------------      

09/02/98       12/17/98      Pvd internet-related solutions     337.8         317.280       53.32          30.26           
09/02/98       12/10/98      Pvd equipment rental services      294.4         289.713        7.19           4.12           
09/02/98       12/21/98      Develop software                   877.8         875.238       43.61          35.00           
09/09/98       12/18/98      Pvd mgmt. consulting services      209.1         376.772      125.63         119.59           
09/18/98       11/20/98      Mnfr diagnoctic imaging equip      897.3         974.054       95.92         103.34           
09/28/98       12/10/98      Dvlp healthcare software          1118.3        1071.544       39.20          44.40           
09/29/98       10/07/98      Gold, coal mining, oil, gas expl   264.8        4235.407       -5.16          20.81           
10/08/98       11/24/98      Publish bus, trade magazines       273.7         259.730       43.65          52.63           
10/13/98       11/20/98      Own, op grocery stores            1854.5        1858.840       18.43          20.99           
10/16/98       12/15/98      Pvd data processing services       137.2         259.954       17.15          16.92           
10/18/98       01/12/99      Whl pharmaceuticals              14319.7       13780.511       11.00          30.28           
10/21/98       11/30/98      Pvd commercial banking svsc         22.2         739.913        4.48           8.95           
10/27/98       12/14/98      Pvd insurance services             212.4        1109.654       20.64          17.18           
11/02/98       01/27/98      Mnfr medical technology prods     3603.2        3589.919       15.28          29.09           
11/09/98       12/22/98      Investment firm                    109.0         157.616       13.46          33.76           
11/16/98       01/06/98      Mnfr construction materials        886.6         887.041       14.02          16.71           
11/30/98       01/28/99      Mnfr medical technology prods     3735.7        3598.987       71.76          74.80           
12/15/98       01/21/99      Publish newspapers, periodicals   1494.8        1431.042        8.58          43.92           

------------------------------------------       
MEAN:            28.4%          32.9%                 
------------------------------------------           

PREMIUM                                    
-------------------------------------------------
DATE              DATE           4 WEEKS PRIOR  3 MONTHS PRIOR   1 YEAR PRIOR
ANNOUNCED       EFFECTIVE         TO ANNC. DATE  TO ANNC. DATE   TO ANNC.DATE

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

09/02/98       12/17/98            23.75           14.00           -35.10   
09/02/98       12/10/98             7.72          -22.84           -14.33   
09/02/98       12/21/98            59.93           73.78           105.49   
09/09/98       12/18/98            90.16           77.38            92.17   
09/18/98       11/20/98            83.50           77.43            73.35   
09/28/98       12/10/98            81.72           70.59            29.85   
09/29/98       10/07/98            62.37            4.35           -44.55   
10/08/98       11/24/98            39.76           17.17            28.18   
10/13/98       11/20/98            16.67            0.77            40.50   
10/16/98       12/15/98            15.15            1.33             0.16   
10/18/98       01/12/99            15.14            -350            56.47   
10/21/98       11/30/98             2.94            1.45            -3.45   
10/27/98       12/14/98            20.91           11.53                    
11/02/98       01/27/98            39.15           38.54            14.16   
11/09/98       12/22/98            31.09           16.42            39.29   
11/16/98       01/06/98            32.98                                    
11/30/98       01/28/99            74.80           57.48           100.85   
12/15/98       01/21/99            39.85           15.50            71.07   

------------------------------------------------- 
39.4%           54.7%            72.1%   
-------------------------------------------------  

- --------------------------------------------------------------------------------
Source Securities Data Company, Inc. Three-month and one-year premiums
calculated using security prices from FactSet Research Systems, Inc. Commercial
banks and other similar financial institutions were excluded for the purpose of
this analysis

Page F - 21

RELATIVE CONTRIBUTION ANALYSIS (a)
($ IN THOUSANDS)

[_]  A.G. Edwards analyzed the relative pro forma contribution of both Star Gas
and Petro to the ownership of capital in the pro forma entity based on Star
Gas' and Petro's historical results from operations and their respective
projections.

[CHART APPEARS HERE]

Star Gas' Average
Gross Profit
Contribution

96-98     27.5%

99-00     29.2%

96-00     28.2%

[CHART APPEARS HERE]

Star Gas' Average
EBITDA Contribution

96-98     35.4%

99-00     33.3%

96-00     34.6%

________________
(a) For purposes of its analysis, A.G. Edwards converted Petro's historical
December 31st fiscal year-end to a September 30th fiscal year-end for
comparison purposes. Other measures of relative contribution analysis are 
non-meaningful.
(b) Includes only heating oil EBITDA for Petro.

Page G-1

RELATIVE CONTRIBUTION ANALYSIS
($ IN THOUSANDS)
(continued)

For Star Gas' contribution of approximately 28.2% of the combined entity's gross
profit and 34.6% of the combined entity's EBITDA, it will receive approximately 
34.8% of the implied firm value.

IMPLIED FIRM VALUE

[PIE CHART APPEARS HERE]

Page G-2

DISCOUNTED CASH FLOW ANALYSIS

[_] A.G. Edwards performed discounted cash flow analyses for Petro, Star Gas
and Star Gas Pro Forma. For Petro, A.G. Edwards used projected tax-adjusted
operating cash flows for 1999 through 2002, terminal values calculated on
2002 operating cash flow and discount rates based on the related weighted
average cost of capital. For Star Gas and Star Gas Pro Forma, A.G. Edwards
used projected DCF for 1999 through 2002, terminal values calculated on
2002 DCF and discount rates based on the related cost of equity.

Assumptions:

[_] Weighted average cost of capital ("WACC")
-   Petro Stand Alone of 13.4% to 13.9% (calculated WACC of 13.6%)

[_] Cost of equity
-   Star Gas Stand Alone of 9.5% to 10.3% (calculated cost of equity of 
9.9%)
-   Star Gas Pro Forma of 9.5% to 10.3% (calculated cost of equity of 9.9%)

[_] Terminal value operating cash flow multiple
-   Petro Stand Alone of 8.0x to 10.0x (calculated 2000 operating cash flow
multiple of 8.6x)

[_] Terminal value DCF multiple
-   Star Gas Stand Alone and Star Gas Pro Forma of 8.0x to 10.0x 
(calculated 2000 DCF multiple of 8.7x)

Page H-1

DISCOUNTED CASH FLOW ANALYSIS
(continued)

PETRO STAND ALONE
- ---------------------------------------------------------------
30 YEAR      TERMINAL VALUE OPERATING CASH FLOW MULTIPLE
----------------------------------------------------- 
8.0x      8.5x     9.0x     9.5x      10.0x
- ---------------------------------------------------------------

WACC
13.4%   ($25,454) ($15,542) ($5,630)  $4,282    $14,194

13.6%    (27,131)  (17,297)  (7,463)   2,372     12,206

13.9%    (28,793)  (19,036)  (9,278)     479     10,237
- ---------------------------------------------------------------

STAR GAS STAND ALONE
- ---------------------------------------------------------------
30 YEAR            TERMINAL VALUE DCF MULTIPLE
----------------------------------------------------- 
8.0x      8.5x     9.0x     9.5x      10.0x
- ---------------------------------------------------------------

Cost of 
Equity
9.5%    $79,410   $82,745   $86,080  $89,415   $92,749

9.9%     78,519    81,811    85,102   88,394    91,685

10.3%     77,642    80,891    84,140   87,389    90,638
- ---------------------------------------------------------------

STAR GAS PRO FORMA
- ---------------------------------------------------------------
30 YEAR            TERMINAL VALUE DCF MULTIPLE
----------------------------------------------------- 
8.0x      8.5x     9.0x      9.5x      10.0x
- ---------------------------------------------------------------

Cost of 
Equity
9.5%    $94,817   $98,730  $102,642  $106,555  $110,467

9.9%     93,764    97,626   101,488   105,349   109,211

10.3%     92,728    96,539   100,351   104,163   107,974
- ---------------------------------------------------------------

Page H-2

DISCOUNTED CASH FLOW ANALYSIS
PETRO - STAND ALONE
Excluding Distributions from Star Gas
($ IN THOUSANDS)
- --------------------------------------------------------------------------------

ADJUSTED FOR
ACTUAL  
CASH FLOW SUMMARY (a):                                             1999         2000         2001          2002     TERMINAL
- -----------------                                              ------------  ----------  ----------   ----------- ------------ 

EBITDA                                                           $42,836        $42,036      $38,747      $35,639

Taxes                                                               (500)          (500)        (500)        (500)

Maintenance capital expenditures                                  (3,641)        (3,714)      (3,788)      (3,864)

Working capital increases (b)                                       (500)          (500)        (500)        (500)
----------     ----------   ----------   ----------  
Net operating cash flow (free cash flow)                          38,195         37,322       33,959       30,775

--------------                                               
WEIGHTED AVERAGE COST OF CAPITAL (c)                 13.6%
--------------

--------------
TERMINAL OPERATING CASH FLOW MULTIPLE (d)             8.6X
--------------

Discount factor (e)                                               0.9380         0.8254       0.7263       0.6391       0.6391

Terminal value (f)                                                                                                    $264,665

--------------
PRESENT VALUE                                     $280,120       $35,829        $30,806      $24,665      $19,669     $169,151
--------------   ----------     ----------   ----------   ----------  -----------

Current net debt and preferred stock (g)         ($295,450)
--------------

==============
NET PRESENT VALUE OF HEATING OIL EQUITY          ($ 15,330)
==============

- --------------------------------------------------------------------------------
(a)  Based on management projections assuming no acquisitions.
(b)  A.G. Edwards' estimate.
(c)  Based on comparable companies' WACC
(d)  Petro's current firm value of $322.1 million/$37.3 million 30-year 2000 net
operating cash flow = 8.6x
(e)  Discounted back to mid-year 1999.
(f)  Terminal value calculated using operating cash flow multiple.
(g)  Net of $13.8 million of cash. Market value of debt used.

Page H-3

DISCOUNTED CASH FLOW ANALYSIS
STAR GAS - STAND ALONE
($ IN THOUSANDS)

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

ADJUSTED FOR
ACTUAL  
DISTRIBUTABLE CASH FLOW SUMMARY (a):                               1999         2000         2001          2002     TERMINAL
- -------------------------------                                ------------  ----------  ----------   ----------- ------------ 

EBITDA                                                            21,119         25,260       26,797       28,335

Interest expense                                                  (8,798)        (9,359)      (9,878)     (10,398)

Maintenance capital expenditures                                  (2,632)        (2,679)      (2,728)      (2,777)

Cash taxes                                                           (25)           (25)         (25)         (25)
----------     ----------   ----------   ----------  
Distributable cash flow                                            9,664         13,197       14,166       15,135

--------------                                               
COST OF EQUITY (b)                                    9.9%
--------------

--------------
TERMINAL DCF MULTIPLE (c)                             8.7x
--------------

Discount factor (d)                                               0.9540         0.8684       0.7904       0.7194       0.7194

Terminal value (e)                                                                                                    $131,675

--------------
PRESENT VALUE OF EQUITY                          $137,492        $ 9,220        $11,460      $11,197     $ 10,888     $ 94,727
--------------   ----------     ----------   ----------   ----------  -----------

Common units/Total units (f)                         60.5%

==============
EQUITY VALUE TO COMMON UNITS (g)                 $ 83,127 
==============

- --------------------------------------------------------------------------------
(a)  Based on management projections.
(b)  Based on cost of equity calculation per WACC analysis.
(c)  Star's current equity market value of $115.3 million/$13.2 million 30-year 
2000 DCF = 8.7x.
(d)  Discounted back to mid-year 1999. 
(e)  Terminal value calculated using DCF multiple.
(f)  Total units include common, subordinated and GP units.       
(g)  Current market value of common units is 3,858 units * $18.06 unit per = 
$69,685.

Page H-4

DISCOUNTED CASH FLOW ANALYSIS
STAR GAS-PRO FORMA
($ IN THOUSANDS)

- ---------------------------------------------------------------------------------------------------------------------------------
ADJUSTED FOR
ACTUAL
DISTRIBUTABLE CASH FLOW SUMMARY (a):                                 1999           2000        2001        2002        TERMINAL
- -------------------------------                                  ------------     ---------   ---------   ---------    ----------

EBITDA                                                               66,034         73,955      77,946      81,669

Interest expense                                                    (25,068)       (26,410)    (28,325)    (29,444)

Maintenance capital expenditures                                     (6,273)        (6,393)     (6,516)     (6,641)

Cash taxes                                                             (525)          (625)       (675)       (725)
------------     ---------   ---------   ---------
Distributable cash flow                                              34,168         40,527      42,430      44,859   
-----------
COST OF EQUITY (b)                                9.9%
-----------
-----------
TERMINAL DCF MULTIPLE (c)                         8.7x 
-----------
Discount factor (d)                                                  0.9540         0.8682      0.7901      0.7191        0.7191  

Terminal value (e)                                                                                                      $390,273   
-----------
PRESENT VALUE                                $414,196               $32,596        $35,185     $33,525     $32,257      $280,634
-----------           ------------     ---------   ---------   ---------    ----------
Original common units/Total units (f)            23.9%
-----------
EQUITY VALUE TO COMMON UNITS (g)             $ 99,171
-----------

- --------------------------------------------------------------------------------
(a) Based on management projections. See Appendix K for model.
(b) Based on cost of equity calculation per WACC analysis.
(c) Star's current equity market value of $115.3 million/$13.2 million 30-year 
2000 DCF=8.7x
(d) Discounted back to mid-year 1999.
(e) Terminal value calculated using DCF multiple.
(f) Total units include common, newly issued common, senior subordinated, 
subordinated and GP units.
(g) Current market value of common units is 3,858 units *$18.06 unit price = 
$69,685.

Page H-5

DISCOUNTED CASH FLOW ANALYSIS
PETRO - STAND ALONE
Weighted Average Cost of Capital Derivation
($ in millions)

===================================================================================================================================
Total                                 Implied      Total       Total
Market         Unit         Total       Market      Debt/     Debt as %     Un-
Levered   Val. Debt     Price at       Units      Value of     Total     of Total    levered
Comparable Company                    Beta(a)   (Bk=Mkt)      (2/3/99)     Out.(Mil)     Equity      Equity     Capital     Beta
- ----------------------------------------------------------------------------------------------------------------------------------

AmeriGas Partners, L.P.                 0.44     $ 719.0      $ 23.625       41.9       $1,009.8      71.2%     41.6%       0.257
Cornerstone Propane Partners, L.P.      0.55       263.1        17.500       19.9          355.6      74.0%     42.5%       0.316
Ferrellgas Partners, L.P.               0.47       594.3        18.688       31.3          596.8      99.6%     49.9%       0.235
Heritage Propane Partners, L.P.         0.48       198.3        23.750        8.6          207.9      95.4%     48.8%       0.246
National Propane Partners, L.P.         0.76       139.2         5.063       11.2           58.0     239.8%     70.6%       0.224
Star Gas Partners, L.P.                 0.51       115.7        18.063        6.3          115.3     100.4%     50.1%       0.255
Suburban Propane Partners, L.P.         0.44       428.2        19.188       28.7          562.4      76.1%     43.2%       0.250

----------------------------------------------------
Petro's capitalization - at market
Comparable group's average unlevered beta:                              0.25      Total debt (b)                     $309.3   92.1%
Petro's debt - to - common equity ratio:                              1160.3%     Common equity                        26.7    7.9%
------  -----
Petro's debt as a percent of total capital (b):                         92.1%                                        $335.9  100.0%
----------------------------------------------------
Comparable group's beta relevered for Petro's capital structure:       3.209 
=====

DERIVATION OF WEIGHTED AVERAGE COST OF CAPITAL:                                                       MARKET RISK PREMIUM RANGE (e)
- -----------------------------------------------                                                      -------------------------------
11.3%     12.3%      13.3%
-------------------------------

Petro's theoretical levered beta (d):                                               3.209 
Assumed % of common equity in Petro's capital structure:                              7.9%
Risk - free rate of return (c):                                                       4.8%
Petro's cost of common equity range (at various market                                
risk premiums):                                                                                         41.1%     44.3%      47.5%  
=====     =====      =====
Petro's assumed tax rate:                                                             0.0%
Assumed % of debt in capital structure (b):                                          92.1%
Petro's estimated cost of debt (f):                                                  11.0% 
Petro's estimated after - tax cost of debt:                                          11.0%              11.0%     11.0%      11.0%

-------------------------------
Petro's weighted average cost of capital range (g):                                                     13.4%     13.6%      13.9% 
-------------------------------

________________
(a) Source: Bloomberg. 143 weeks (maximum weekly time period allowed, or the
number of weeks available, which may be less than 143) adjusted beta
relative to the S&P 500 index
(b) Includes preferred stock.
(c) Ten - year Treasury rate on February 3, 1999.
(d) Bloomberg's reported beta for Petro is .70.
(e) Ibbotson Associates 1998. Total returns for small company stocks of 17.7% 
minus the risk-free rate.
(f) Based on Petro's current debt structure.
(g) Calculation based upon use of the Capital Asset Pricing Model (CAPM).

Page H-6

DISCOUNTED CASH FLOW ANALYSIS
STAR GAS - STAND ALONE
Weighted Average Cost of Capital Derivation
($ in millions)
- --------------------------------------------------------------------------------

Total                                   Implied        Total     Total          
Market         Unit       Total         Market         Debt/    Debt as %   Un-
Levered     Val. Debt      Price at    Units         Value of       Total    of Total  levered
COMPARABLE COMPANY                    Beta(a)     (Bk=Mkt)       (2/3/99)   Out. (Mil)      Equity       Equity    Capital     Beta
- ------------------------------------------------------------------------------------------------------------------------------------

AmeriGas Partners, L.P.                0.44         $719.0        $23.625      41.9         $1,009.8      71.2%     41.6%     0.257
Cornerstone Propane Partners, L.P.     0.55          263.1         17.500      19.9            355.6      74.0%     42.5%     0.316
Ferrellgas Partners, L.P.              0.47          594.3         18.688      31.3            596.8      99.6%     49.9%     0.235
Heritage Propane Partners, L.P.        0.48          198.3         23.750       8.6            207.9      95.4%     48.8%     0.246
National Propane Partners, L.P.        0.76          139.2          5.063      11.2             58.0     239.8%     70.6%     0.224
Star Gas Partners, L.P.                0.51          115.7         18.063       6.3            115.3     100.4%     50.1%     0.255
Suburban Propane Partners, L.P.        0.44          428.2         19.188      28.7            562.4      76.1%     43.2%     0.250

-----------------------------------------------------
Star's capitalization - at market(b)
Comparable group's average unlevered beta:                            0.5        Total debt                           $115.7   50.1%
Star's debt - to - equity ratio (b):                                100.4%       Common equity                         115.3   49.9%
Star's debt as a percent of total capital (b):                       50.1%                                            ------  -----
Comparable group's beta relevered for Star's capital structure:     0.409                                             $231.0  100.0%
-----------------------------------------------------

DERIVATION OF WEIGHTED AVERAGE COST OF CAPITAL:                                                     Market Risk Premium Range (d)
- -----------------------------------------------                                                    -------------------------------

11.3%        12.3%       13.3%
------------------------------- 
Star's theoretical levered beta:                                 0.409
Assumed % of equity in Star's capital structure (b):              49.9%
Risk-free rate of return (d):                                      4.8%
Star's cost of equity range (at various market risk premiums):                                       9.5%         9.9%       10.3%  
====         ====       ===== 
Star's assumed tax rate:                                          39.6%
Assumed % of debt in capital structure (b):                       50.1%
Star's estimated cost of debt (e):                                 7.8%
Star's estimated after-tax cost of debt:                           4.7%                              4.7%         4.7%        4.7%

-------------------------------
Star's weighted average cost of capital range (f):                                                   7.1%         7.3%        7.5%
-------------------------------

_______________________________________
(a) Source: Bloomberg. 143 week (maximum weekly time period allowed, or the
number of weeks available, which may be less than 143) adjusted beta
relative to the S&P 500 index.

(b) Market value of debt is assumed to equal book value.

(c) Ten - year Treasury rate on February 3, 1999.

(d) Ibbotson Associates 1998. Total returns for small company stocks of 17.7%
minus the risk-free rate.

(e) Based on Star current debt structure.

(f) Calculation based upon use of the Capital Asset Pricing Model (CAPM).

Page H-7

DISCOUNTED CASH FLOW ANALYSIS
STAR GAS-PRO FORMA
PRO FORMA WEIGHTED AVERAGE COST OF CAPITAL DERIVATION
($ IN MILLIONS)
- --------------------------------------------------------------------------------

TOTAL                               IMPLIED       TOTAL       TOTAL      
MARKET         UNIT        TOTAL      MARKET       DEBT/     DEBT AS %     UN-
LEVERED    VAL. DEBT     PRICE AT      UNITS     VALUE OF      TOTAL     OF TOTAL    LEVERED
COMPARABLE COMPANY                      BETA (A)   (BK = MKT)    (2/3/99)    OUT.(MIL)    EQUITY       EQUITY     CAPITAL     BETA
- ------------------------------------------------------------------------------------------------------------------------------------

AmeriGas Partners, L.P.                   0.44      $719.0       $23.625       41.9       $1,009.8      71.2%      41.6%      0.257
Cornerstone Propane Partners, L.P.        0.55       263.1        17.500       19.9          355.6      74.0%      42.5%      0.316
Ferrellgas Partners, L.P.                 0.47       594.3        18.688       31.3          596.8      99.6%      49.9%      0.235
Heritage Propane Partners, L.P.           0.48       198.3        23.750        8.6          207.9      95.4%      48.8%      0.246
National Propane Partners, L.P.           0.76       139.2         5.063       11.2           58.0     239.8%      70.6%      0.224
Star Gas Partners, L.P.                   0.51       115.7        18.063        6.3          115.3     100.4%      50.1%      0.255
Suburban Propane Partners, L.P.           0.44       428.2        19.188       28.7          562.4      76.1%      43.2%      0.250

----------------------------------------------------
Pro forma capitalization - at market (b) 

Comparable group's average unlevered beta:                             0.25       Total debt                          $286.2   50.3%
Pro forma debt - to - equity ratio (b):                               101.1%      Total equity                         283.0   49.7%
------  ------
Pro forma debt as a percent of total capital (b):                      50.3%                                          $569.2  100.0%
----------------------------------------------------
Comparable group's beta relevered for Pro forma capital structure:    0.410
=====

DERIVATION OF WEIGHTED AVERAGE COST OF CAPITAL:                                                        MARKET RISK PREMIUM RANGE (D)
- ----------------------------------------------                                                      --------------------------------
11.3%      12.3%     13.3% 
--------------------------------

Pro forma theoretical levered beta:                                             0.410
Assumed % of equity in Pro forma capital structure (b):                          49.7%
Risk - free rate of return (c):                                                   4.8%
Pro forma cost of common range (at various market risk premiums):                                        9.5%       9.9%     10.3%
=====      =====     ===== 
Pro forma assumed tax rate:                                                      39.6%
Assumed % of debt in capital structure (b):                                      50.3%
Pro forma estimated cost of debt (e):                                             8.5%
Pro forma estimated after - tax cost of debt:                                     5.1%                   5.1%       5.1%      5.1%

--------------------------------
Pro forma weighted average cost of capital range (f):                                                    7.3%       7.5%      7.7%
--------------------------------

________________
(a) Source: Bloomberg. 143 week (maximum weekly time period allowed, or the
number of weeks available, which may be less than 143) adjusted beta
relative to the S&P 500 index.
(b) Market value of debt is assumed to equal book value. See page C-6 for equity
calculation.
(c) Ten - year Treasury rate on February 3, 1999.
(d) Ibbotson Associates 1998. Total returns for small company stocks of 17.7% 
minus the risk-free rate.
(e) Based on Pro forma debt structure.
(f) Calculation based upon use of the Capital Asset Pricing Model (CAPM).

Page H - 8

COMPARABLE TRANSACTIONS ANALYSIS
FIRM VALUATION

[_]  A.G. Edwards noted that public disclosure regarding transactions in the 
retail home heating oil distribution industry was extremely limited.

[_]  A.G. Edwards analyzed the financial terms related to divestitures by Petro
of certain of its retail home heating oil branches and compared them to the
implied multiples of the aggregate purchase price of Petro's heating oil
assets.

[_]  Petro has sold three branches for an average EBITDA multiple of 9.0x.

[_]  A.G. Edwards calculated the purchase price of Petro's heating oil assets 
and calculated multiples based on Petro's EBITDAs.

- --------------------------------------------------------------------------------
PURCHASE PRICE OF HEATING OIL ASSETS
- ------------------------------------

Equity purchase price of heating oil assets
including CUs (see page C-5)                                   $  16,054

Cost of Debt to be Redeemed ($206,250 + $2,844 premium)            209,094

Cost of Debt to be Assumed                                          80,501

Cost of Preferred stock at Redemption Value                         31,767

Consent Fees                                                         1,961

Transaction Fees                                                    19,139
---------
Aggregate purchase price of heating oil assets                   $ 358,516
=========

MULTIPLES
- ---------------------------------                         --------------------    
MULTIPLES            Notes
--------------------       ---------------------------------------------

Actual 4 quarter ended 9/30/98 EBITDA (a)     34,929                10.3 x           As a multiple of aggregate transaction value.

Adjusted for actual 1999 EBITDA (a)           44,415                 8.1 x           As a multiple of aggregate transaction value.

Projected 2000 EBITDA (a)                     48,195                 7.4 x           As a multiple of aggregate transaction value.

________________________________

(a)  Calculated as gross profit minus SG&A expense and direct delivery expense.

Page I-1

PUBLIC PARTNERSHIP ANALYSIS

[_] A.G. Edwards compared certain financial and market information of Star Gas
on a historical and pro forma basis to that of certain public propane
master limited partnerships which A.G. Edwards deemed relevant for the
purposes of this analysis. In addition to Star Gas, A.G. Edwards reviewed
the trading multiples from a total of five master limited partnerships.

[_] The selected propane master limited partnerships are as follows:
-  AmeriGas Partners, L.P.             -  Heritage Propane Partners, L.P.
-  Cornerstone Propane Partners, L.P.  -  Suburban Propane Partners, L.P.
-  Ferrellgas Partners, L.P. 

[_] No partnership used in the analysis is identical to Star Gas.

-----------------------------------------------------------------------------------------------------------------------------
PUBLIC COMPARABLE PARTNERSHIPS (a)
-----------------------------------------------------------------------------------------------------------------------------
PUBLIC             PUBLIC
PRO FORMA         PARTNERSHIP        PARTNERSHIP
STAR             STAR             MEDIANS             RANGES
-----------------------------------------------------------------------------------------------------------------------------

Distribution yield                                     12.2%            12.7%              10.4%            8.6% to 12.3%
Market capitalization/LTM EBITDA                       11.9x            10.3x              11.5x            9.1x to 13.2x
Market capitalization/1999E EBITDA                     10.7x (b)         8.4x (b)           9.8x            8.6x to 11.3x
Equity Market Cap/LTM DCF                              13.8x            12.6x              13.2x            9.6x to 15.5x
Equity Market Cap/1999E DCF                            11.9x (c)         8.5x (c)          10.5x            9.9x to 12.2x
LTM common unit coverage                                1.0x             0.8x               1.5x            0.8x to  1.9x
1999E common unit coverage                              1.1x (d)         1.1x (d)           2.0x            0.9x to 2.2x
LTM total unit coverage                                 0.6x             0.6x               0.8x            0.5x to 1.1x
1999E total unit coverage                               0.7x (d)         0.9x (d)           1.1x            0.6x to 1.1x
-----------------------------------------------------------------------------------------------------------------------------

(a)  Public comparable partnerships include APU, CNO, FGP, HPG and SPH.
(b)  Market capitalization/adjusted for actual 1999 EBITDA
(c)  Equity market cap/adjusted for actual 1999 EBITDA.
(d)  Adjusted for actual 1999.

Page J-1

PUBLIC PARTNERSHIP ANALYSIS
($ IN MILLIONS, EXCEPT PER UNIT DATA)

====================================================================================================================================

Closing      Implied     Implied                                Common
Price on   Market Value    Firm     Distribution                Units/  
Company                                        Ticker    (2/3/99)    of Equity     Value       per Unit      Yield   Total Units(a)
- ------------------------------------------------------------------------------------------------------------------------------------

Star Gas Partners, L.P.                         SGU      $18.063     $ 115.3       $ 225.2       $2.20        12.2%      60.5%  

AmeriGas Partners, L.P.                         APU       23.625     1,009.8       1,724.0        2.20         9.3%      51.7% 
Cornerstone Propane Partners, L.P. (c) (d)      CNO       17.500       355.6         610.4        2.16        12.3%      65.5% 
Ferrellgas Partners, L.P.          (d) (e)      FGP       18.688       596.8       1,185.7        2.00        10.7%      46.0% 
Heritage Propane Partners, L.P.    (d)          HPG       23.750       207.9         403.8        2.05         8.6%      55.7% 
Suburban Propane Partners, L.P.    (f)          SPH       19.188       562.4         930.8        2.00        10.4%      73.6% 

- ------------------------------------------------------------------------------------------------------------------------------------
Mean                                                                                                          10.3%      58.5% 
Median                                                                                                        10.4%      55.7%
====================================================================================================================================
Pro Forma                                                $18.063      $291.1       $ 557.7 (g)   $2.30        12.7%      79.9%  

====================================================================================================================================

LTM Common       LTM Total       FY99E       FY99E Common     FY99E Total
Unit Coverage    Unit Coverage    DCF/unit     Unit Coverage    Unit Coverage
- --------------------------------------------------------------------------------------------------------------------------------

Star Gas Partners, L.P.                             1.0x (b)        0.6x (b)       $1.51          1.1x              0.7x  

AmeriGas Partners, L.P.                             1.5x            0.8x            2.35          2.0x              1.1x
Cornerstone Propane Partners, L.P. (c) (d)          0.8x            0.5x            1.36          0.9x              0.6x  
Ferrellgas Partners, L.P.          (d) (e)          1.5x            0.7x            2.14          2.2x              1.1x
Heritage Propane Partners, L.P.    (d)              1.9x            1.1x            2.35          2.0x              1.1x
Suburban Propane Partners, L.P.    (f)              1.3x            1.0x            2.08          1.2x              1.0x

- --------------------------------------------------------------------------------------------------------------------------------
Mean                                                1.4x            0.8x                          1.7x              1.0x
Median                                              1.5x            0.8x                          2.0x              1.1x
================================================================================================================================
Pro Forma                                           0.8x (b)        0.6x (b)        2.07          1.1x              0.9x

_____________________________________
1999 estimates per A.G. Edwards' research (not adjusted for actual 1999 
results), except for Star and Pro Forma.
Implied Firm Value equals, for comparative purposes, common, subordinated and GP
units, multiplied by the market price of common units plus debt, less cash.
(a) Calculated as (common units/((common + subordinated units)/0.98).
(b) For Star and Pro forma only, LTM figures are 1998 actuals.
(c) Financial figures not pro forma for acquisition of Propane Continental Inc.
(d) Maintenance capital expenditures assumed to be 8% of EBITDA due to lack of 
disclosure.
(e) Financial figures exclude ESOP charge of $0.9 million.
(f) Financial figures exclude $5.1 million gain from sale of minority interest 
and $1.8 million loss from impairment of assets.
(g) $291.1 in equity plus $286.2 pro forma debt, less $19.6 cash and cash 
collateral.

Page J-2

PUBLIC PARTNERSHIP ANALYSIS
($ IN MILLIONS, EXCEPT PER UNIT DATA)
(continued)

=============================================================================================================================

TOTAL        LTM        FIRM VALUE/   FIRM VALUE/       EQUITY          EQUITY
DEBT/      EBITDA/         LTM           1999E        MARKET CAP/     MARKET CAP/
FIRM VALUE   INT. EXP.      EBITDA          EBITDA         LTM DCF        1999E DCF
----------------------------------------------------------------------------------------

STAR GAS PARTNERS, L.P.                 51.4%       2.4X (a)      11.9X (a)       10.7X          13.8X (a)      11.9X

AmeriGas Partners, L.P.                 41.7%       2.3x          11.5x            9.8x          13.7x          10.6x
Cornerstone Propane Partners, L.P.      43.1%       2.4x          13.2x           11.3x          15.5x          12.2x
Ferrellgas Partners, L.P.               50.1%       2.1x          11.8x            9.5x          13.2x           9.9x
Heritage Propane Partners L.P.          49.1%       2.5x          10.7x           10.3x          10.6x          10.2x
Suburban Propane Partners, L.P.         46.0%       3.3x           9.1x            8.6x           9.6x          10.5x

- -----------------------------------------------------------------------------------------------------------------------------
MEAN                                    46.0%       2.5x          11.3x            9.9x          12.5x          10.7x 
MEDIAN                                  46.0%       2.4x          11.5x            9.8x          13.2x          10.5x
=============================================================================================================================

PRO FORMA                               51.3%       2.2X (a)      10.3X (a)        8.4X          12.6X (a)       8.5X  

______________________________________
EBITDA is defined as net income (loss) before extraordinary items plus interest,
income taxes, depreciation and amortization, impairment expense, and other
non-recurring and non-operating items.

(a)  For Star and Pro forma only, LTM figures are 1998 actuals.

Page J-3

PUBLIC PARTNERSHIP ANALYSIS
COMPARABLE PARTNERSHIPS AND TARGET PRICE PERFORMANCE

1/1/98 - 2/3/99

[GRAPH APPEARS HERE]

8/14/98* - 2/3/99

[GRAPH APPEARS HERE]

*Date of transaction announcement.                                    

Page J-4

PUBLIC PARTNERSHIP DESCRIPTIONS

AMERIGAS PARTNERS, L.P.

AmeriGas Partners operates the largest retail propane distribution business in
the U.S., serving approximately 968,000 residential, commercial, industrial,
agricultural, and motor-fuel customers in 45 states. AmeriGas Partners also
sells propane-related supplies and equipment, including home appliances. The
company owns or leases a fleet of about 385 transport trucks, 680 railroad tank
cars, and 2,300 bobtail and rack trucks. It also owns or leases propane-storage
facilities in Arizona and Rhode Island. AmeriGas Propane, a wholly owned
subsidiary of UGI Corp., owns 58% of AmeriGas Partners.

[APU GRAPH APPEARS HERE]

CORNERSTONE PROPANE PARTNERS, L.P.

Cornerstone Propane Partners, L.P. distributes propane for residential,
commercial, industrial, agricultural and other retail uses; markets and
distributes propane and natural gas liquids; services propane heating systems
and appliances; and sells propane-related supplies, appliances and other
equipment. It is the fifth largest retail marketer of propane in the U.S. in
terms of volume. The partnership's operations are concentrated in the east
coast, south-central and west coast regions of the U.S.

[CNO GRAPH APPEARS HERE]

Page J-5

PUBLIC PARTNERSHIP DESCRIPTIONS

(continued)

FERRELLGAS PARTNERS, L.P.

Ferrellgas is the second largest U.S. distributor of propane serving more
than 800,000 residential and commercial customers. The company also engages
in propane/natural gas trading, wholesale propane marketing, and chemical
feedstock marketing. It markets its products primarily in the Midwest, the
Great Lakes area, and the Southeast. With a delivery fleet of approximately
4,000 vehicles, Ferrellgas sells almost 700 million gallons of fuel
annually to its retail customers, which represents about 8% of all retail
propane bought in the U.S. The company has acquired more than 100 companies
in 11 years.

[FGP GRAPH APPEARS HERE]

HERITAGE PROPANE
PARTNERS, L.P.

Heritage Propane Partners distributes propane to more than 220,000
residential, commercial, industrial, and agricultural customers. The
propane is used primarily for heating, drying, cooking, as fuel for
engines, as a cutting gas for mining operations, and for curing tobacco.
The company's retail operations distribute propane to customers in 23
states in the western, southeastern, and northeastern U.S. The company also
distributes wholesale propane and sells, installs, and repairs propane-
related equipment. Heritage has acquired 40 retail propane operations since
1989, bringing annual propane sales to over 125 million gallons.

[HPG GRAPH APPEARS HERE]

Page J-6

PUBLIC PARTNERSHIP DESCRIPTIONS

(continued)

SUBURBAN PROPANE
PARTNERS, L.P.

Suburban Propane Partners markets and distributes propane to residential,
commercial, industrial and agricultural customers through a retail
distribution network consisting of 352 district locations in 41 states. The
company, the third largest retail marketer of propane in the U.S., serves
over 730,000 active customers primarily located in the east and west coast
regions of the country. Suburban Propane also sells, installs and services
equipment related to its propane distribution business, including heating
and cooking appliances and, at some locations, propane fuel systems.

[SPH GRAPH APPEARS HERE]

Page J-7

- --------------------------------------------------------------------------------
TRANSACTION SUMMARY AND ASSUMPTIONS

(in thousand except per share and per unit data)

- ---------------------------------------------------------------------------------------------------------------------------
SUMMARY CASH FLOW AND COVERAGE ANALYSIS
- ---------------------------------------------------------------------------------------------------------------------------
($ on per Unit basis)                                                       PROJECTED                         
----------------------------------------------------------------------------------
ACTUAL       NORMALIZED       ADJ. FOR ACTUAL                                       
1998           1998               1999              2000        2001        2002   
----------    ------------    -------------------   ---------    --------    -------- 

STAR STAND ALONE                                                                                                                   
EBITDA                                   $ 18,906     $   22,135           $   21,119       $  25,260    $ 26,797    $ 28,335 
Interest Expense                          (7,927)        (7,667)              (8,798)         (9,359)     (9,878)    (10,398)
Mainterance CapEx                         (2,625)        (2,610)              (2,632)         (2,679)     (2,728)     (2,777)
Other                                        (25)           (25)                 (25)            (25)        (25)        (25)
--------     ----------           ----------       ---------    --------    --------  
Distributable Cash Flow                  $  8,329     $   11,833           $    9,664       $  13,197    $ 14,166    $ 15,135 
========     ==========           ==========       =========    ========    ======== 

DCF per Common Unit                      $   2.16     $     3.07           $     2.48       $    3.28    $   3.37    $   3.46  
DCF / Common Unit MQD                        0.98  x        1.39  x              1.13  x         1.49 x      1.53 x      1.57 x

DCF per Total Unit                       $   1.30     $     1.85           $     1.51       $    2.02    $   2.10    $   2.19
DCF / Total MQD                              0.59  x        0.84  x              0.68  x         0.92 x      0.96 x      1.00 x

Indicated Distribution per Common Unit   $   2.20     $     2.20           $     2.20       $    2.20    $   2.20    $   2.20

STAR PRO FORMA
EBITDA                                                                               
------
Star                                    $ 18,906     $   22,135           $   21,119       $  25,260    $ 26,797    $ 28,335
Petro                                     34,929         46,900               44,415          48,195      50,649      52,834 
Synergies                                    500            500                  500             500         500         500
--------     ----------           ----------       ---------    --------    --------
Total                                           54,335         69,535               66,034          73,955      77,946      81,669 
--------     ----------           ----------       ---------    --------    --------

Interest Expense                          (24,530)       (24,396)             (25,068)        (26,410)    (28,325)    (29,444)
Maintenance CapEx                          (6,125)        (6,125)              (6,273)         (6,393)     (6,516)     (6,641)
Other                                        (525)          (525)                (525)           (625)       (675)       (725) 
--------     ----------           ----------       ---------    --------    --------
Distributable Cash Flow                   23,155         38,489               34,168          40,527      42,429      44,859  
========     ==========           ==========       =========    ========    ========

DCF per Common Unit                      $   1.80     $     2.99           $     2.57       $    2.96    $   2.98    $   2.94
DCF per Sr. Sub & Common Unit            $   1.51     $     2.51           $     2.17       $    2.50    $   2.54    $   2.53
DCF per Total Unit                       $   1.44     $     2.39           $     2.07       $    2.39    $   2.43    $   2.43

Indicated Distribution per Common Unit   $   2.30     $     2.30           $     2.30       $    2.30    $   2.30    $   2.30
- ---------------------------------------------------------------------------------------------------------------------------------

- ------------------------------------------------------------------------------------------------------------------------------------
ACCRETION/DILUTION
- ------------------------------------------------------------------------------------------------------------------------------------
DCF per Unit - Star Stand Alone          $   1.30     $     1.85           $     1.51       $    2.02    $   2.10    $   2.19
DCF per Unit - Pro Forma                 $   1.44     $     2.39           $     2.07       $    2.39    $   2.43    $   2.43
- ------------------------------------------------------------------------------------------------------------------------------------
Accretive ($/Unit)                      $   0.13     $     0.53           $     0.56       $    0.37    $   0.33    $   0.23
Accretive (%)                               10.1%          28.8%                37.2%           18.6%       15.5%       10.7%
- ------------------------------------------------------------------------------------------------------------------------------------
PRO FORMA HEATING OIL DCF PER UNIT                                         $     2.42       $    2.63    $   2.63    $   2.57 
DPUS ISSUED AS SR SUB UNITS AT BEG OF YEAR      -              -                    -               -           -           -
- ------------------------------------------------------------------------------------------------------------------------------------

- ------------------------------------------------------------------------------------------------------------------------------------
PRO FORMA CREDIT ANALYSIS 
- ------------------------------------------------------------------------------------------------------------------------------------
EBITDA/Interest                              2.22  x        2.85  x              2.63  x         2.80  x     2.75  x     2.77 x
LT Debt/EBITDA                               5.07           3.96                 4.15            4.21        4.20        4.19 
LT Debt/EBITDA (Pro Forma for Full-Year      
Acquisitions)                               4.91           3.83                 4.03            4.00        4.00        4.00
# of Units Issued to Meet Debt Covenant         -              -                  814              47         991       1,035 
- ------------------------------------------------------------------------------------------------------------------------------------

- ------------------------------------------------------------------------------------------------------------------------------------
PRO FORMA COVERAGE RATIOS
- ------------------------------------------------------------------------------------------------------------------------------------
MOD Coverage
------------
Common Unit                                 0.78  x        1.30  x              1.12  x         1.29  x     1.30 x      1.28 x
Senior Subordinated Unit                    0.66           1.09                 0.94            1.09        1.10        1.10
Total Unit                                  0.62           1.04                 0.90            1.04        1.06        1.06  

Indicated Distribution Coverage
- -------------------------------
Common Unit                                 0.78  x        1.30  x              1.12  x         1.29  x     1.30 x      1.28 x
Senior Subordinated Unit                    0.66           1.09                 0.94            1.09        1.10        1.10
Total Unit                                  0.62           1.04                 0.90            1.04        1.06        1.06  

- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
CURRENT MODEL ASSUMPTIONS
- ------------------------------------------------------------------------------------------------------------------------------------

SCENARIO VERSION:                                 30-yr; $15/$30mm @ 4.75x mid-year; $.01 '99, $.005 '00-'01, flat att.
Petro Acqs/yr                                        $ 15,000          1999        $ 30,000         2000 on
Star Acqs/yr                                         $  5,000          1999        $ 10,000         2000 on

G.P. INTEREST SUBORDINATE
- ------------------------------------------------------------------------------------------------------------------------------------

- ------------------------------------------------------------------------------------------------------------------------------------
EQUITY RESTRUCTURING
- ------------------------------------------------------------------------------------------------------------------------------------
PETRO
------------------------------------------------------------
PUBLIC                                  INSIDERS 
--------------                           ---------------    

Securities Offered                                       Sr Sub                                   Sub & GP

Security Offered per Share                                0.11758                                  0.14318
Total Shares                                               14,618                                   11,834
Insiders to Receive Sr. Sub                                 6,572                                   (6,572)  
Shares to Be Converted                                     21,190                                    5,262  
Units Offered                                               2,491                                      753
DPUs Offered                                                                                           909
- ------------------------------------------------------------------------------------------------------------------------------------

- ------------------------------------------------------------------------------------------------------------------------------------
SOURCES AND USES OF FUNDS
- ------------------------------------------------------------------------------------------------------------------------------------
SOURCES:                                                              USES:                                    

Excess Cash on Hand                $ 0                                Repay Debt Principal          $  206,250
New Star Debt                   90,000                                Redeem Preferred                  31,767
New MLP Equity                 170,000                                Premium on Redemption/                 
New MLP E Equity                     -                                 Exchange/Defeasance               2,844
Equity for Consent Fees          1,961                                Consent Fees                       1,961
Cash Balance                         0                                Transaction Fees                  19,139

---------                                                              ----------
$ 261,960                                                              $  261,960
=========                                                              ========== 
- ------------------------------------------------------------------------------------------------------------------------------------

- ------------------------------------------------------------------------------------------------------------------------------------
FINANCING SUMMARY
- ------------------------------------------------------------------------------------------------------------------------------------
AMOUNT                 RATE                UNIT PRICE
----------             --------          -----------------  

New Common Raised                  $  170,000                               $      19.08   (a)
New Debt Raised                        90,000              7.50%         

(a)  Last 20 Days Average Stock Price @ 2/3 
- ------------------------------------------------------------------------------------------------------------------------------------

- ------------------------------------------------------------------------------------------------------------------------------------
UNITS OUTSTANDING
- ------------------------------------------------------------------------------------------------------------------------------------
CURRENT                       PRO FORMA                         
---------------------------     --------------------------
UNITS               %           UNITS               %       
---------          -------      ---------          -------    

Existing Common                    3,858.999            60.5%      3,858.999            23.9%
New Common                                 0             0.0%      9,013.547            55.9%       
New Common for Acquisitions                0             0.0%          0.000             0.0%
Common to Petro Shareholders               0             0.0%          0.000             0.0% 
Sr Sub (Petro S/H's)                       0             0.0%      2,491.500            15.5% 
Existing Sub                       2,396.078            37.5%        431.126             2.7%  
Implied GP                           127.655             2.0%        322.350             2.0%
----------         -------     -----------         ------- 
Total Units           6,382.732          100.00%     16,117.523          100.00%
==========         =======     ===========         =======
- ------------------------------------------------------------------------------------------------------------------------------------

1 of 19

================================================================================
TRANSACTION SUMMARY AND ASSUMPTIONS
(IN THOUSANDS EXCEPT PER SHARE AND PER UNIT DATA)

OPERATING ASSUMPTIONS 
- ------------------------------------------------------------------------------------------------------------------
PETRO         STAR          STAR NORMAL                   
----------    ----------     ----------------                

Normalized Maintenance CapEx                               $  3,500      $  2,625         $    2,610                      
Maintenance CapEx Life                                           15 yrs        15 yrs                                   
Growth CapEx Life                                              12.6 yrs        15 yrs                                   

Deferred Tax Percent                                                          0.0%                                      

Required Cash at Beginning for Initial Distribution                         8,865                                       
Minimum Star Stand Alone Cash Balance                                    $  1,115                                       
Minimum Star Pro Forma Cash Balance                                      $ 14,882                                       
Consolidation Savings                                                    $    500                                       
Annual Bank Fees                                           $    943      $      0                                       
Last 20 Days Average Stock Price @ 2/3                     $   1.01      $  19.08 2000+                                 
Annual Transaction/Deal Expenses                                         $    225         $      450                      
Debt/EBITDA Bank Covenant Ratio                                               4.0x                
Issue Equity to Meet Bank Debt Covenants (Y/N)?                               yes                 

DEBT RESTRUCTURING
- ------------------------------------------------------------------------------------------------------------
PROJECTED                                    
12/31/97                                    
PRIVATES:                                                  % TENDERED      PRINCIPAL       STRATEGY       PRICE         
----------      ---------     -------------    -----           

11.96% Sr Notes                                           100.0%         60,000        Exchange        105.2% 
14.10% Sr Notes                                           100.0%          3,100        Exchange        105.2%     
14.10% Sub Notes                                          100.0%          3,100        Exchange        105.2%  
14.33% Pfd Stock                                          100.0%          4,167       Neg. Tender      100.0% 
PUBLICS:
10.13% Sub Notes & Sr Notes                               100.0%         50,000       Neg. Tender      100.0%  
9.38% Sub Notes & Sr Notes                               100.0%         75,000         Tender         100.0%   
12.25% Sub Notes & Sr Notes                               100.0%         81,250         Tender         103.5%
12.88% Pfd Stock                                          100.0%         30,000         Tender          92.0%

NEW SECURITY ASSUMPTIONS
- ---------------------------------------------------------------------

NEW MLP EQUITY
- --------------                              
Gross Proceeds                                              $ 170.00
Common Units for Consent Fee                                   1,961 
Common Units to Enron                                            -
-------- 
Total New Equity Value                                 $171.960
Common Units to Public                                         9,014  units

NEW STAR DEBT   
-------------   
Gross Proceeds         90,000
Gross Spread %                                                    5.0%                   Gross Spread %           1.25%  
Gross Spread $                                               $  8,500                    Gross Spread $         $1,125
Offering Price/Share (current market price)                  $  19.08                    Coupon                   7.50%           

ACQUISITION ASSUMPTIONS
- ------------------------------------------------------------------------------------------------------------------------------
PETRO                                 MULTIPLE           1998           1999            2000           2001           2002
- -----                              -------------     -----------    -----------     ------------   ------------   -----------       

Amount                               4.75x         $    0         $  15,000       $  30,000      $   30,000     $   30,000 
Timing                                                 End            Mid             Mid             Mid            Mid
% EBITDA                                               0.0%            50.0%           50.0%           50.0%          50.0% 
Amount                               4.75x                        $       0                                     
Timing                                                                Beg                                       
% EBITDA in Initial Year                                              100.0%                                    
Units Issued at Common                               $ 22.00                                                      
Sr. Sub                                $ 18.52                                                      

STAR STAND-ALONE                                                                                                  
- ----------------                                                                                                  
Weather                                30    Year                                                               
Amount                               6.50x         $ 9,000        $   5,000       $  10,000      $   10,000     $   10,000    
Timing                                                 End            Mid             Mid             Mid            Mid  
% EBITDA in Initial Year                               0.0%            50.0%           50.0%           50.0%          50.0%  

Amount Financed with Equity                        $     0        $   1,363       $   4,504      $    3,940     $    3,316
New Units @:                                             0               62             205             179            151
Units Issued at Price of:                          $ 22.00        $   22.00       $   22.00      $    22.00     $    22.00

Amount                               6.50x                        $       0 
Timing                                                                Beg     
% EBITDA in Initial Year                                              100.0%

EXCHANGE ASSUMPTIONS
- -----------------------------------------------------------------------------------------------------------------------------
EXISTING                      GETS NEW UNITS OF:                    
------------------------------------------------------------------
SHAREHOLDERS OF:                                 SHARES      COMMON        SR.SUB         JNR. SUB       G.P.       DPUs(1) 
- ---------------------------------------------------------  ----------    ----------   -------------   ---------  ------------    

Public Class A Shareholders                    14,618.087        0       1,718.795        0.000         0.000       481.478
Insider Class B Shares                             11.228        0           0.000        0.000                       0.000  
Insider Class C Shareholders                                                                            0.000      
Class A & C Shares to Receive Jr Sub & GP    5,262.443        0           0.000      431.126       322.350       211.068
Class A Shares to Receive Sr Sub             6,571.740        0         772.705        0.000         0.000       216.454
-------------  ----------   -----------   -------------   ---------  ------------     
26,463.498        0       2,491.500      431.126       322.350       909.000   
E Sr. Sub                                                                    0.000                                    0.000  
-----------                              ------------     
Total                                                                2,491.500                                  909.000    
===========                              ============

(1) Includes 2.0% G.P. Interest.

TRANSACTION COSTS SUMMARY
---------------------------------------------------------------------

New MLP Equity                                              $  8,500                     
New Star Debt                                                  1,125                     
Fairness Opinion                                               1,275                     
Financial Advisory                                             1,500                     
Exchange Fees on Public Petro Debt/Preferred                   1,375
Legal Fees                                                     4,200 
Printing                                                       1,500
Accounting Fees                                                  200 
Other:                                                                   
------                                                                   
Environmental                                                      0     
Rating Agencies                                                   60     
Roadshow                                                         200     
Asset Appraisal                                                  100     
Solicitation expenses                                            100     
Other Bank Fees                                                  150     
Other                                                            225     
-------- 
Transaction Costs Capped at                                 $ 20,510 
========      
$ 19,139

HEATING OIL DPU TRIGGER
- -----------------------
DCF/Unit      % Convert
$2.90        33.3% 

CONSENT FEE CALCULATION                
- ---------------------------------------
% of Petro Stock              3.3%     
New Petro Shares              874                           
Exchange Ratio               8.50x     
-----------    
New Common Units          102.773      
Common Unit Price       $   19.08      
-----------    
Implied Value           $   1,961      
===========     

2 of 19

===========================================================================================================================
SUMMARY DISTRIBUTIONS
(in thousands except per share and per unit data)

Projected                     
----------------------------------------------------     
UNITHOLDER CLASS (1)                                         1998        1999          2000          2001         2002 
------------  ----------   ------------   ----------   ----------- 

COMMON UNITHOLDERS
MQD                                                              $   30,544   $   31,534     $  32,727    $  35,057 
Incentive Distributions                                                   -            -             -            -
----------   ------------   ----------   ----------- 
Total                                                       $   30,544       31,534      $  32,727    $  35,057     

E CAPITAL
Existing Sr. Sub Units                                                    -            -             -            -
Number of DPUs Issued as Sr Sub Units                                     -            -             -            -
New Sr. Sub Units                                                         -            -             -            -
----------   ------------   ----------   -----------   
Total Sr. Sub Units                                                  -            -             -            -

Existing Common                                                           -            -             -            - 
New Common                                                                -            -             -            - 
----------   ------------   ----------   ----------- 
Total Common                                                         -            -             -            -

Common MQD                                                                -            -             -            -
Common Incentive Distributions                                            -            -             -            -
Sr. Sub MQD                                                               -            -             -            -
Sr. Sub Incentive Distributions                                           -            -             -            -
----------   ------------   ----------   -----------    
Total Distributions                                                  -            -             -            -

SENIOR SUBORDINATED UNITHOLDERS (1)
Number of DPUs Issued as Sr Sub Units                                     -            -             -            -

Base MQD                                                         $        0   $    5,730     $   5,730    $   5,730       
Incremental MQD from DPUs Issued as Sr. Sub Units
Incentive Distributions                                                   -            -             -            -
Incremental Incentive Distributions from DPUs                             -            -             -            -
Issued as Sr. Sub Units                                                  -            -             -            -
----------   ------------   ----------   -----------  
Total                                                       $        0   $    5,730     $   5,730    $   5,730     

SUBORDINATED UNITHOLDERS (1)
Number of DPUs Issued as Sr Sub Units                                     -            -             -            -   

Base MQD                                                         $        0   $      992     $     992          992
Incremental MQD from DPUs Issued as Sr. Sub Units                         -            -             -            -
Incentive Distributions                                                   -            -             -            -
Incremental Incentive Distributions from DPUs Issued 
as Sr. Sub Units                                                         -            -             -            -
----------   ------------   ----------   -----------   
Total                                                       $        0   $      992     $     992          992

GENERAL PARTNER
Number of DPUs Issued as Sr Sub Units                                     -            -             -            -

Base MQD                                                         $        0   $      741     $     741    $     741      
Incremental MQD from DPUs Issued as Sr. Sub Units                         -            -             -            -
Incentive Distributions                                                   -            -             -            -
Incremental Incentive Distributions from DPUs Issued  
as Sr. Sub Units                                                         -            -             -            -
----------   ------------   ----------   -----------   
Total                                                       $        0   $      741     $     741    $     741      

UNITHOLDER CLASS TOTAL
Common Unitholders                                               $   30,554   $   31,534     $  32,727    $  35,057       
Senior Subordinated Unitholders                                           -        5,730         5,730        5,730
Subordinated Unitholders                                                  -          992           992          992
General Partner                                                           -          741           741          741 
----------   ------------   ----------   -----------       
Total                                                       $   30,544   $   38,997     $  40,191    $  42,520

DISTRIBUTIONS TO DPUs CONVERTED TO SENIOR SUBORDINATED UNITS          
MQD                                                              $        0   $        0     $       0    $       0
Incentive Distributions                                                   -              -             -
----------   ------------   ----------   -----------       
Total                                                                     -              -             -            -     
-              -             -            -

____________________
(1)  Reflects distributions for respective Unitholder class. All DPUs are issued
as Senior Subordinated Units but are distributed pro rata to all Petro
shareholders. Consequently, the Subordinated Unitholder class includes DPUs
which have been issued as Senior Subordinated Units.

3 of 19

- --------------------------------------------------------------------------------
TRANSACTION SUMMARY AND ASSUMPTIONS

(in thousands except per share and per unit data)             

RECAPITALIZATION ASSUMPTIONS
- --------------------------------------------------------------------------------

(D)EFEASE                                                                                
(T)ENDER                                                                                
(R)EDEEM      PRINCIPAL                                                                  
LOCKUP    (E)XCHANGE      AS OF                                                                    
MATURITY PERIOD       COUPON/          SINKING FUND PAYMENT  
-----------------                   ---------------------------
PETRO INSTRUMENTS:             PREMISES   (N)OTHING      9/30/98        M/D       YR        DIVIDEND       PAYMENT       YEAR START
- ----------------------        ------------------------ -----------   --------  --------   -----------    -----------   -------------

11.96% Sr Notes                               e        $    60,000 v    1-Oct         0       11.960%    $         0               0
14.10% Sr Notes                               e              3,100 v   15-Jan      2001       14.100%              -            1997
14.10% Sub Notes                              e              3,100 v   15-Jan      2001       14.100%              -            1997
10.13% Sub Notes & Sr Notes        0.0%       t             50,000 v    1-Apr      2003       10.130%              -
9.38% Sub Notes & Sr Notes         0.0%       t             75,000 v    1-Feb      2006        9.375%              -
12.25% Sub Notes & Sr Notes        0.0%       t             81,250 v    1-Feb      2005       12.250%              -
8.00% Acq. & Other Notes Pay                  n             14,508 v                  0        8.000%              -               0
8.25% Existing Credit Facility                n                  0 v               1998        8.250%              -
0.00% Other Notes                             n                  0 v       NA        NA        0.000%              0              NA
-----------
$   286,958
PFRD STOCK:
- -----------
14.33% Pfd Stock                              t              4,167 v    1-Aug      1999       14.330%          4,167            1997
12.88% Pfd Stock                   0.0%       t             30,000 v   15-Feb      2009       12.875%              0
0.00%                                         n                  0                             0.000%
-----------
$    34,167
-----------
Total Petro                                       $   321,125
-----------

STAR INSTRUMENTS:
- ----------------------
8.04% 1st Mortgage Notes          0.07        n             85,000 v       NA        NA        8.040%              -               0
7.25% WC Revolver                 0.00        n              4,785         NA        NA        7.250%              -              NA
7.25% Acquisition Facility        0.01        n              9,000 v       NA        NA        7.250%              -              NA
7.50% New Debt                                n             90,000 v       NA        NA        7.500%              0              NA
7.17% Pearl Notes                 0.01        n             11,000         NA        NA        7.170%              0              NA
-----------
8.21%                $   188,785
-----------
Total Combined                                    $   509,910
===========

% Red./     Red/Exchg   Defeasance       Red/Exchg/Defease    Exchanged
----------------------  
PETRO INSTRUMENTS:             Exchanged      Price       Price         Value       Premium    Int Rate   Security Type
- ----------------------        -----------  ----------- ------------   ---------   ----------  ----------  -------------

11.96% Sr Notes                    100.0%       105.2%                $  60,000   $        0       10.9%  Sr Notes
14.10% Sr Notes                    100.0%       105.2%                    3,100            -      14.10%  Sr Notes
14.10% Sub Notes                   100.0%       105.2%                    3,100            -      14.10%  Sub Notes
10.13% Sub Notes & Sr Notes        100.0%       100.0%       106.2%      50,000            -              Sub Notes & Sr Notes 
9.38% Sub Notes & Sr Notes         100.0%       100.0%       108.2%      75,000            -              Sub Notes & Sr Notes 
12.25% Sub Notes & Sr Notes        100.0%       103.5%       116.2%      84,094        2,844              Sub Notes & Sr Notes 
8.00% Acq. & Other Notes Pay         0.0%       100.0%                        -            -              Acq. & Other Notes Pay
8.25% Existing Credit Facility       0.0%       100.0%                        -            -              Existing Credit Facility
0.00% Other Notes                    0.0%         0.0%                        -            -       11.0%  Other Notes
---------- 
$    2,844
PFRD STOCK:
- -----------
14.33% Pfd Stock                   100.0%       100.0%                    4,167            -              Pfd Stock
12.88% Pfd Stock                   100.0%        92.0%                   27,600            -              Pfd Stock
0.00%                                                                         -            -
---------- 
$        0
---------- 
Total Petro                                                                  $    2,844
----------  

STAR INSTRUMENTS:
- ----------------------
8.04% 1st Mortgage Notes             0.0%         0.0%                        -            -              1st Mortgage Notes
7.25% WC Revolver                    0.0%         0.0%                        -            -              WC Revolver
7.25% Acquisition Facility           0.0%         0.0%                        -            -              Acquisition Facility
7.50% New Debt                       0.0%         0.0%                        -            -              New Debt
7.17% Pearl Notes                    0.0%         0.0%                        -            -              Pearl Notes
---------- 
$        0
---------- 
Total Combined                                                               $    2,844
----------  

2,843.75

STAR STAND ALONE DISTRIBUTION ASSUMPTIONS
- --------------------------------------------------------------------------

Distribution
--------------
Minimum Quarterly Distribution                                  $2.20
First Target Distribution                                       $2.42
Second Target Distribution                                      $2.84
Third Target Distribution                                       $3.70
Thereafter                                                         NM

Target Distribution Level                                       $2.20
Annual Distribution Increase                                    $0.00

----------
Standard Distribution Structure ("S") or Target ("T")           t
----------   

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

STAR PRO FORMA DISTRIBUTION ASSUMPTIONS
- --------------------------------------------------------------------

Distribution
------------

Minimum Quarterly Distribution                               $2.30
First Target Distribution                                    $2.42
Second Target Distribution                                   $2.84
Third Target Distribution                                    $3.70
Thereafter                                                      NM

------------------------------------------------------------------
1998         1999         2000         2001         2001      Thereafter
------------ ------------ ------------ ------------ ------------ 
Annual Indicated Distribution Increase                    $0.00        $0.00        $0.00        $0.00        $0.00       $0.00
Target Indicated Distribution Level                       $2.30        $2.30        $2.30        $2.30        $2.30

------------
Standard Distribution Structure ("S") or Target ("T")                 t
------------   

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

4 of 19

================================================================================
PRO FORMA OPENING BALANCE SHEET 

(in thousands except per share and per unit data)

OPENING BALANCE SHEET                                         STAR GAS        PETRO                                     PRO FORMA
--------      ---------
MERGER          STAR GAS
--------      ---------
9/30/98        9/30/98                    ADJUSTMENT       9/30/98
--------      ---------                  ------------    ----------- 

ASSETS:
------------      
Cash                                                     $  1,115      $ 13,767                    $      0        $ 14,882
------------      
Other Current Assets                                       16,832        64,045                           -          80,877
TOTAL CURRENT ASSETS                                    --------      ---------                  ------------    ----------- 
17,947        77,812                           -          95,759   

PP&E and Intangibles, Net                                 161,660       107,957                           -         269,617
Investments in Unconsolidated Affiliates                        -           113                        (113)              -
Other Assets                                                    -        12,796                           -          12,796
--------      ---------                  ------------    ----------- 
Total Assets                                             179,607       198,678                        (113)        378,172
========      =========                                  =========== 
LIABILITIES:
Current Liabilities                                        12,450        78,003                           -          90,453
8.25% Existing Credit Facility                              4,770             -                           -           4,770
Long Term Debt                                            105,000       286,885                    (116,250)        275,635
Total Preferred Stock                                           -        34,167                     (34,167)              -
Other Liabilities                                              40        10,686                           -          10,726
--------      ---------                  ------------    ----------- 
Total Liabilities                                        122,260       409,741                    (150,417)        381,584

Common Shareholder's /Partner's Equity                          57,347      (211,063)                    150,304          (3,412)
--------      ---------                  ------------    -----------  
Total Liabilities and Equity                             $179,607      $198,678                       ($113)       $378,172
========      =========                                  ===========

check                                       -             -                                           -

PRO FORMA
% NET        MERGER          STAR GAS
PRO FORMA CAPITAL STRUCTURE                                   STAR GAS        PETRO        TENDERED     ADJUSTMENT       9/30/98
--------      ---------     ----------   ------------   -----------  

--------      ---------       
9/30/98       9/30/98
--------      ---------

DEBT                                                          
8.04% 1st Mortgage Notes                                      $ 85,000      $      0                    $      0        $ 85,000
7.25% WC Revolver                                                4,770             -                           -           4,770 
7.25% Aquisition Facility                                        9,000             -                           -           9,000
7.17% Pearl Notes                                               11,000             -                           -          11,000

11.96% Sr Notes                                                      -        60,000        100.0%       (60,000)              -
14.10% Sr Notes                                                      -         3,100        100.0%        (3,100)              -
14.10% Sub Notes                                                     -         3,100        100.0%        (3,100)              -
10.13% Sub Notes & Sr Notes                                          -        50,000        100.0%       (50,000)              -
9.38% Sub Notes & Sr Notes                                           -        75,000        100.0%       (75,000)              -
12.25% Sub Notes & Sr Notes                                          -        81,250        100.0%       (81,250)              -
0.00% Other Notes                                                    -             0                           -               -
8.00% Acq. & Other Notes Pay                                         -        14,435                           -          14,435
8.25% Existing Credit Facility                                       -             0                           -               -

10.90% Exchanged Debt                                                -             -                      60,000          60,000
14.10% Exchanged Debt                                                                                      6,200           6,200
7.50% New Debt                                                       -             -                      90,000          90,000
--------      ----------               ------------     -----------
TOTAL L.T. DEBT                                          109,770       286,885                    (116,250)        280,405
--------      ----------                                -----------  

PREFERRED STOCK:                                                  
14.33% Pfd Stock                                                     -         4,167                      (4,167)              -
12.88% Pfd Stock                                                     -        30,000                     (30,000)              -
--------      ----------                  ------------   -----------  
TOTAL PREFERRED                                                -        34,167                     (34,167)              -
--------      ----------                                 -----------  

COMMON EQUITY                                                   57,347      (211,063)                    150,304          (3,412)
--------      ----------                                 -----------  

TOTAL CAPITAL                                           $167,117      $109,989                                    $276,993
========      ==========                                 =========== 

5 of 19

================================================================================
(in thousands except per share and per unit data)

STAR GAS STAND ALONE INCOME STATEMENT 

Actual     Normalized                          Projected
-------------------------------------------------
1998         1998           1999         2000        2001          2002
----------   ----------     ----------  -----------  ----------   ----------- 

EBITDA                                     $   18,906   $   22,135     $   21,119  $    25,260  $   26,797   $    28,335
Depreciation and Amortization                11,638       12,079         12,218       13,066      13,944        14,652
----------   ----------     ----------  -----------  ----------   ----------- 

EBIT                                            7,268       10,056          8,901       12,194      12,853        13,683
Interest Expense                             (7,927)      (7,667)        (8,798)      (9,359)     (9,878)      (10,398)
Interest Income                                   -            -              -            -           -             -
Other Income                                      -            -              -            -           -             -
----------   ----------     ----------  -----------  ----------   ----------- 
Income Before Taxes                              (659)       2,389            103        2,835       2,975         3,285
Current Income Taxes                            (25)         (25)           (25)         (25)        (25)          (25)
Deferred Income Taxes                             -            -              -            -           -             -
----------   ----------     ----------  -----------  ----------   ----------- 
Net Income Available to Common                  ($684)  $    2,364     $       78  $     2,810  $    2,950   $     3,260
==========   ==========     ==========  ===========  ==========   ===========  

STAR GAS STAND ALONE UNITS OUTSTANDING

Common Units
Beginning Balance                             3,859        3,859          3,859        3,920       4,120         4,296
Issuance                                         0            0             61          201         176           148
Buyback                                          0            0              0            0           0             0 
----------   ----------     ----------  -----------  ----------   ----------- 
Ending Balance                                3,859        3,859          3,920        4,120       4,296         4,444
----------   ----------     ----------  -----------  ----------   ----------- 
Average Common Units Outstanding              3,859        3,859          3,889        4,020       4,208         4,370

Subordinated Units                              
Beginning Balance                             2,396        2,396          2,396        2,396       2,396         2,396
Issuance                                         0            0              0            0           0             0
Buyback                                          0            0              0            0           0             0  
----------   ----------     ----------  -----------  ----------   ----------- 
Ending Balance                                2,396        2,396          2,396        2,396       2,396         2,396 
----------   ----------     ----------  -----------  ----------   ----------- 
Average Subordinated Unites Outstanding       2,396        2,396          2,396        2,396       2,396         2,396 

GP Implied Units
Beginning Balance                               128          128            128          129         133           137 
Issuance                                         0            0              1            4           4             3 
Buyback                                          0            0              0            0           0             0  
----------   ----------     ----------  -----------  ----------   ----------- 
Ending Balance                                 128          128            129          133         137           140  
----------   ----------     ----------  -----------  ----------   ----------- 
Ending Implied GP Units Outstanding             128          128            128          131         135           138   

Total Units                                 6,383        6,383          6,445        6,649       6,829         6,979 
==========   ==========     ==========  ===========  ==========   ===========  
Average Units Outstanding                   6,383        6,383          6,414        6,547       6,739         6,904   
==========   ==========     ==========  ===========  ==========   ===========  

6 of 19

================================================================================
(in thousand except per share and per unit date)

Actual                      Projected  
--------------------------------------------
STAR GAS STAND ALONE BALANCE SHEET                                 1998          1999      2000      2001         2002  
---------     ---------   ---------  ---------   ---------

ASSETS:
Cash                                                        $   1,115     $   1,115   $   1,115  $   1,115   $   1,115 
Other Current Assets                                           16,832        18,289      21,016     22,028      23,041  
---------     ---------   ---------  ---------   ---------   
Total Current Assets                                          17,947        19,404      22,131     23,143      24,156  

PP&E and Intangibles, Net                                     161,660       157,299     157,362    156,596     155,171   
Other Assets                                                        -             -           -          -           -   
---------     ---------   ---------  ---------   ---------   
Total Assets                                                  179,607       176,703     179,493    179,739     179,327   
=========     =========   =========  =========   =========   

LIABILITIES:
Current Liabilities - Excluding Working Capital Borrowing      12,450        13,907      16,634     17,646      18,659
Total Debt                                                    109,770       118,079     125,231    132,401     139,589
Other Liabilities                                                  40            40          40         40          40
---------     ---------   ---------  ---------   ---------
Total Liabilities                                            122,260       132,026     141,905    150,087     158,288

Partner's Equity                                                  57,347        44,677      37,588     29,652      21,039
---------     ---------   ---------  ---------   ---------  
Total Liabilities and Equity                               $ 179,607     $ 176,703   $ 179,493  $ 179,739   $ 179,327
=========     =========   =========  =========   =========  
Check                               -             -           -          -           0

STAR GAS STAND ALONE CASH FLOW STATEMENT

Net Income                                                                   $      78   $   2,810  $   2,950   $   3,260      
Depreciation and Amortization                                               12,218      13,066     13,944      14,652      
Deferred Taxes                                                                   -           -          -           -      
Other Income                                                                     -           -          -           -      
Other Assets/Liabilities                                                         -           -          -           -      
Change in Working Capital                                                        0           0          -           -      
---------   ---------  ---------   ---------      
Cash From Operations                                                            12,296      15,876     16,894      17,912      
---------   ---------  ---------   ---------        

Maintenance CapEx                                                           (2,632)     (2,679)    (2,728)     (2,777)
Internal Growth CapEx                                                            -           -          -           -
External Growth CapEx                                                       (5,000)    (10,000)   (10,000)    (10,000)
---------   ---------  ---------   ---------          
Cash from Investments                                                           (7,632)    (12,679)   (12,728)    (12,777)
---------   ---------  ---------   --------- 

Acquisition Borrowing                                                        3,637       5,496      6,060       6,684
Remaining Distributions to Repay Debt                                            0           0         (0)          0
Amortization of Mortgage Notes                                                   -           -          -           -
Borrowing to Repay Existing Debt                                                 -           -          -           -
Borrowing for Changes in WC                                                     (0)         (0)         -           -
Borrowing to Pay Full MQD                                                    4,447       1,206        660          54
Change in Equity                                                             1,363       4,504      3,940       3,316 
Transaction/Deal Expenses                                                     (225)       (450)      (450)       (450)
Distributions                                                              (14,110)    (14,404)   (14,826)    (15,189)
---------   ---------  ---------   ---------       
Cash from Financing                                                             (4,889)     (3,647)    (4,616)     (5,585)     
---------   ---------  ---------   ---------           

Net Cash Flow                                                                     (225)       (450)      (450)       (450)  
Initial Cash Balance                                                             1,115       1,115      1,115       1,115   
---------   ---------  ---------   ---------       
Cash Available for Paydown on WC Revolver and Acq. Facility                        890         665        665         665

Minimum Cash Balance                                                             1,115       1,115      1,115       1,115    

Borrowing/(Paydown) on WC Revolver and Acq. Facility                               225         450        450         450  
---------   ---------  ---------   ---------       

Net Change in Cash                                                                   -           -          -           -
---------   ---------  ---------   ---------   

Ending Cash Balance                                                          $   1,115   $   1,115  $   1,115   $   1,115 
=========   =========  =========   =========        

7 of 19

================================================================================================================================
(in thousands except per share and per unit data)

Actual    Normalized                  Projected
----------------------------------------
1998        1998         1999      2000       2001       2002
--------   ----------    --------  --------   --------   -------- 
STAR GAS STAND ALONE EBITDA CALCULATION                                            
(See Tab 3: Cases)                                                                 
- ----------------------------------------------------------------------------------------------------------------------------- 
Year 1      Year 2    Year 3     Year 4     Year 5

EBITDA Growth Rate                                                         17.1%       -4.6%      19.6%      6.1%       5.7%
- ----------------------------------------------------------------------------------------------------------------------------- 

BASE EBITDA:        Timing
------
End      1998
Mid      1999
Mid      2000
Mid      2001
Mid      2002
Mid      2003
Mid      2004
Mid      2005
--------   ----------    --------  --------   --------   -------- 
TOTAL EBITDA                                            $ 18,906   $   22,135    $ 21,119  $ 25,260   $ 26,797   $ 28,335
========   ==========    ========  ========   ========   ======== 

PRO FORMA FULL-YEAR EBITDA FOR DEBT CONVANENT ANALYSIS    18,906       22,135      21,504    26,030     27,567     29,105

STAR GAS STAND ALONE DEPRECIATION CALCULATION

EXISTING DEPRECIATION                                      $ 11,638   $   12,079    $ 12,079  $ 12,079   $ 12,079   $ 12,079 
1998 Normal       2,610           
MAINTENANCE CAPEX:            1998           2,625         $      0   $        0    $    175  $    175   $    175   $    175 
Annual Growth: 1.8%      1999           2,632                                        88       175        175        175  
2000           2,679                                                  89        179        179
2001           2,728                                                             91        182
2002           2,777                                                                        93

INTERNAL GROWTH CAPEX:        1998               0                -            -           -         -          -          - 
Annual Growth: 0.0%      1999               0                                         -         -          -          - 
2000               0                                                   -          0          0
2001               0                                                              -          0
2002               0                                                                         -
2003               0
2004               0
2005               0

EXTERNAL GROWTH CAPEX:        1998           9,000                -            -         600       600        600        600 
Annual Growth: 0.0%      1999           5,000                                       167       333        333        333
2000          10,000                                                 333        667        667
2001          10,000                                                            333        667
2002          10,000                                                                       333
2003          10,000
2004          10,000
2005          10,000
--------   ----------    --------  --------   --------   -------- 
TOTAL DEPRECIATION                                      $ 11,638   $   12,079    $ 12,218  $ 13,066   $ 13,944   $ 14,652    
========   ==========    ========  ========   ========   ======== 

8 0f 19

================================================================================
STAR GAS STAND ALONE DEBT SCHEDULE

(in thousands except per share and per unit data)

Actual     Normalized                     Projected
-------------------------------------------
1998         1998          1999       2000       2001       2002
----------  ------------   ---------- ---------- ---------- ---------- 

8.04% 1st Mortgage Notes
Beginning Balance                                         $ 85,000      $ 85,000     $ 85,000   $ 85,000   $ 85,000   $ 85,000  
Borrowing                                                       0             0            0          0          0          0
Amortization                                                    0             0            0          0          0          0
--------      --------     --------   --------   --------   --------
Ending Balance                                              85,000        85,000       85,000     85,000     85,000     85,000

Interest Payment                               8.04%         6,834         6,834        6,834      6,834      6,834      6,834
Make-Whole Payment                                               0             0            0          0          0          0

7.17% Pearl Notes                                                                                                        
Beginning Balance                                         $      0      $      0     $ 11,000   $ 11,000   $ 11,000   $ 11,000
Borrowing                                                  11,000        11,000            0          0          0          0
Amortization                                                    0             0            0          0          0          0
--------      --------     --------   --------   --------   --------
Ending Balance                                              11,000        11,000       11,000     11,000     11,000     11,000

Interest Payment                               7.17%           613           613          789        789        789        789
% of year Pearl Notes Outstanding                             77.7%         77.7%           0          0          0          0

7.25% WC Revolver                                                                                                        
Beginning Balance                                                -             -       $4,770   $  4,770   $  4,770   $  4,770
Borrowing for Change in WC                                      -             -           (0)        (0)         -          -
Borrowing/(Payment)                                         4,770         4,770            0          0          0          0
--------      --------     --------   --------   --------   --------
Ending Balance                                               4,770         4,770        4,770      4,770      4,770      4,770

Effective Avg WC Balance                                     6,621         3,034        3,062      3,062      3,062      3,062 
Interest Payment                               7.25%           480           220          222        222        222        222  

7.25% Acquisition Facility
Beginning Balance                                                -             -     $  9,000   $ 17,309   $ 24,461   $ 31,631
External Acquisitions                                       9,000         9,000        3,637      5,496      6,060      6,684
External Acquisitions at Beginning of 1999                      -             -            -          -          -          -
Internal Acquisitions                                           -             -            -          -          -          -
Borrowing to Pay Full MQD                                       -             -        4,447      1,206        660         54
Borrowings to Repay Existing Debt                               -             -            -          -          -          -
Borrowings/(Payment)                                            -             -          225        450        450        450
Remaining Distributions to Repay Debt                           -             -            0          0         (0)         0
--------      --------     --------   --------   --------   --------
Ending Balance                                               9,000         9,000       17,309     24,461     31,631     38,819

Interest Balance                               7.25%             0             0          954      1,514      2,033      2,554

TOTAL DEBT                                                                 
Beginning Balance                                         $ 85,000      $ 85,000     $109,770   $118,079   $125,231   $132,401
Amortization of Mortgage Notes                                  -             -            -          -          -          -
Borrowing for Pearl Notes                                  11,000        11,000            -          -          -          -
Borrowing for Changes in WC                                     -             -           (0)        (0)         -          -
Borrowing to Pay Full MQD                                       -             -        4,447      1,206        660         54
Acquisition Borrowing                                       9,000         9,000        3,637      5,496      6,060      6,684
Borrowing to Repay Existing Debt                                -             -            -          -          -          -
Remaining Distribution to Repay Debt                            -             -            0          0         (0)         0
Borrowing/(Payment) on WC Revolver and Acq. Facility        4,770         4,770          225        450        450        450
--------      --------     --------   --------   --------   --------
Ending Balance                                            $109,770      $109,770     $118,079   $125,231   $132,401   $139,589
========      ========     ========   ========   ========   ========

Interest Expense
Interest Expense                                          $  7,927      $  7,667     $  8,798   $  9,359   $  9,878   $ 10,398
Bank Fee                                                         -             -            -          -          -          -
--------      --------     --------   --------   --------   --------
Total Interest Payment                                 $  7,927      $  7,667     $  8,798   $  9,359   $  9,878   $ 10,398
========      ========     ========   ========   ========   ========

9 of 19

================================================================================
STAR GAS STAND ALONE SCHEDULE OF ACTUAL DISTRIBUTIONS 

(in thousands except per share and per unit data)

ACTUAL     NORMALIZED                           PROJECTED
-------------------------------------------------------
ASSUMES REVISED TARGET DISTRIBUTION STRUCTURE         1998        1998           1999          2000          2001         2002
---------   ----------   -----------   ------------  ------------   ------------

DISTRIBUTABLE CASH
- ------------------
Cash from Operations                                 $10,954     $14,443      $12,296       $15,876       $16,894        $17,912
Maintenance CapEx                                (2,625)     (2,610)      (2,632)       (2,679)       (2,728)        (2,777) 
Other                                                 0           0            0             0             0              0
---------   ----------   -----------   ------------  ------------   ------------
Total MLP Distributable Cash Flow                      8,329      11,833        9,664        13,197        14,166         15,135

Distributable Cash Flow /Unit                        $  1.30     $  1.85      $  1.51       $  2.02       $  2.10        $  2.19

AVERAGE UNITS FOR CALCULATING ANNUAL DISTRIBUTIONS                                  2             2             2              2  
- --------------------------------------------------    
Common Units                                           3,859       3,859        3,889         4,020         4,208          4,370  
Subordinated Units                                     2,396       2,396        2,396         2,396         2,396          2,396    
General Partner Interest Unit Equivalent                 128         128          128           131           135            138
---------   ----------   -----------   ------------  ------------   ------------
Total Units Outstanding                                6,383       6,383        6,414         6,547         6,739          6,904

DISTRIBUTION LEVELS                        
- -------------------
MQD                                                  $  2.20     $  2.20      $  2.20       $  2.20       $  2.20        $  2.20    
First Target                                         $  2.42     $  2.42      $  2.42       $  2.42       $  2.42        $  2.42 
Second Target                                        $  2.84     $  2.84      $  2.84       $  2.84       $  2.84        $  2.84 
Third Target                                         $  3.70     $  3.70      $  3.70       $  3.70       $  3.70        $  3.70 

Indicated Cash Distribution                          $  2.20     $  2.20      $  2.20       $  2.20       $  2.20        $  2.20    

DISTRIBUTION OF MQD
- -------------------
Cash Available                                         8,329      11,833        9,664        13,197        14,166         15,135
Cash Borrowed to pay Full MQD                          5,713       2,209        4,447         1,206           660             54
Allocation to:
Common Units                                      8,490       8,490        8,557         8,844         9,258          9,613   
Subordinated Units                                5,271       5,271        5,271         5,271         5,271          5,271
General Partner Interest                            281         281          282           288           297            304

FIRST TARGET DISTRIBUTION
- -------------------------
Cash Available                                             0           0            0             0             0              0

Cash Required for Target Distribution                 0           0            0             0             0              0
Cash Required for Indicated Distribution              0           0            0             0             0              0
Actual Cash Distributed                               0           0            0             0             0              0
Allocation to:                                                                                                                  
Common Units                                          0           0            0             0             0              0
Subordinated Units                                    0           0            0             0             0              0
General Partner Interest                              0           0            0             0             0              0

SECOND TARGET DISTRIBUTION                                                                                                      
- --------------------------                                                                                                      
Cash Available:                                            0           0            0             0             0              0

Cash Required for Target Distribution                 0           0            0             0             0              0
Cash Required for Indicated Distribution              0           0            0             0             0              0
Actual Cash Distributed                               0           0            0             0             0              0
Allocation to:                                                                                                                  
Common Units                                          0           0            0             0             0              0
Subordinated Units                                    0           0            0             0             0              0
General Partner Interest                              0           0            0             0             0              0
Incentive Distribution                                0           0            0             0             0              0

THIRD TARGET DISTRIBUTION                                                                                                       
- -------------------------                                                                                                       
Cash Available                                             0           0            0             0             0              0

Cash Required for Target Distribution                 0           0            0             0             0              0
Cash Required for Indicated Distribution              0           0            0             0             0              0
Actual Cash Distributed                               0           0            0             0             0              0
Allocation to:                                                                                                                  
Common Units                                          0           0            0             0             0              0
Subordinated Units                                    0           0            0             0             0              0
General Partner Interest                              0           0            0             0             0              0
Incentive Distribution                                0           0            0             0             0              0 

10 of 19

================================================================================
STAR GAS STAND ALONE SCHEDULE OF ACTUAL DISTRIBUTIONS (CONT'D)

(in thousands except per share and per unit data)

Actual    Normalized                   Projected
--------------------------------------
1998        1998         1999      2000      2001      2002
--------  ------------   --------  --------  --------  --------

Remaining Distribution
- ----------------------
Cash Available                            0            0          0         0         0         0
Allocation to:                                                                                   
Common Units                         0            0          0         0         0         0
Subordinated Units                   0            0          0         0         0         0
General Partner Interest             0            0          0         0         0         0
Incentive Distribution               0            0          0         0         0         0
Repay Indebtedness                  (0)           0         (0)       (0)        0        (0)

Total Distributions                                               
- -------------------                                               
Common Units                          8,490        8,490      8,557     8,844     9,258     9,613
Subordinated Units                    5,271        5,271      5,271     5,271     5,271     5,271
General Partner Interest                281          281        282       288       297       304
Incentive Distribution                    0            0          0         0         0         0
Total Distributions            -------      -------    -------   -------   -------   -------
$14,042      $14,042    $14,110   $14,404   $14,826   $15,189
=======      =======    =======   =======   =======   =======

Total Distributions Per Unit                      
- ----------------------------                      
Common Unit                         $  2.20      $  2.20    $  2.20   $  2.20   $  2.20   $  2.20
Subordinated Unit                      2.20         2.20       2.20      2.20      2.20      2.20
GP Unit                                2.20         2.20       2.20      2.20      2.20      2.20

11 of 19

- --------------------------------------------------------------------------------
(in thousands except per share and per unit data)

Actual   Normalized                   Projected
--------------------------------------------
1998       1998       1999       2000       2001        2002
---------- ---------- ---------- ---------- ---------- -----------  

PETRO EBITDA CALCULATION

- ------------------------------------------------------------------------------------------------------------------------------------
Year 1     Year 2      Year 3    Year 4      Year 5 
EBITDA GROWTH RATE                                                         
- ------------------------------------------------------------------------------------------------------------------------------------

BASE EBITDA:             Timing
------
ACQUISITIONS:              End          1998     $      0
Mid          1999       15,000
Mid          2000       30,000 
Mid          2001       30,000 
Mid          2002       30,000 
Mid          2003       30,000  
Mid          2004       30,000 
Mid          2005       30,000  
---------- ---------- ---------- ---------- ---------- -----------  
TOTAL EBITDA                                               $   34,929 $   46,900 $   44,415 $   48,195 $   50,649 $    52,834
========== ========== ========== ========== ========== =========== 

PRO FORMA FULL-YEAR EBITDA FOR DEBT COVENENT ANALYSIS          34,929     46,900     45,994     51,353     53,807      55,992

PETRO DEPRECIATION CALCULATION

EXISTING DEPRECIATION                                           $   28,946 $   24,018 $   24,018 $   24,018 $   24,018 $    24,018

MAINTENANCE CAPEX:                           1998     $  3,500           -          -        233        233        233         233
Annual Growth: 2.0%                1999        3,641                               121        243        243         243
2000        3,714                                          124        248         248
2001        3,788                                                     126         253
2002        3,864                                                                 129
2003        3,941
2004        4,020
2005        4,100

INTERNAL GROWTH CAPEX:                       1998     $      0           -          -          -          -          -           -
Annual Growth: 0.0%                1999            0                                 -          -          -           -
2000            0                                            -          -           -  
2001            0                                                                   -
2002            0
2003            0
2004            0
2005            0

EXTERNAL GROWTH CAPEX:                       1998     $      0           -          -          0          0          0           0
Annual Growth: 0.0%                1999       15,000                               595      1,190      1,190       1,190
2000       30,000                                        1,190      2,381       2,381
2001       30,000                                                   1,190       2,381
2002       30,000                                                               1,190
2003       30,000  
2004       30,000 
2005       30,000  

---------- ---------- ---------- ---------- ---------- ----------- 
TOTAL DEPRECIATION:                                               28,946     24,018     24,968     26,999     29,630      32,266
========== ========== ========== ========== ========== =========== 

================================================================================
(in thousands except per share and per unit data)

STAR PRO FORMA INCOME STATEMENT
ACTUAL         NORMALIZED                            PROJECTED
---------------------------------------------------
1998             1998            1999              2000               2001
--------       ------------     -----------      --------------    ----------------

Combined EBITDA                                  $ 53,835       $   69,035       $   65,534       $     73,455      $    77,446 
Consolidated Savings                                500              500              500                500              500
--------       ----------       ----------       ------------      -----------
Pro Forma EBITDA                                   54,335           69,535           66,034             73,955           77,946   
Depreciation and Amortization                    40,584           36,097           37,186             40,065           43,574
--------       ----------       ----------       ------------      -----------
EBIT                                               13,751           33,438           28,848             33,890           34,372
Interest Expense                                (24,530)         (24,396)         (25,068)           (26,410)         (28,325) 
Interest Income                                       -                -                -                  -                -    
Other Income                                          -                -                -                  -                -     

EBT                                               (10,779)           9,042            3,780              7,480            6,047  
--------       ----------       ----------       ------------      ----------- 
Current Income Taxes                               (525)            (525)            (525)              (625)            (675)
Deferred Income Taxes                                 -                -                -                  -                -     
--------       ----------       ----------       ------------      -----------  
Net Income Available to Common                   ($11,304)      $    8,517       $    3,255       $      6,855      $     5,372
========       ==========       ==========       ============      =========== 
Pro Forma Full-Year EBITDA for Debt Covenant 
Analysis                                         54,335           69,535           67,998             77,883           81,874

STAR PRO FORMA UNITS OUTSTANDING

Common Units                                                        
Beginning Balance                                                 12,873           12,873             13,687           13,734 
Issuance                                                             -                -                  -                -  
Issued to meet Debt Covenant Ratio                                   -              814                 47              991 
Issued to E                                                          -                -                  -                -
Buyback                                                              -                -                  -                - 
--------       ----------       ----------       ------------      -----------  
Ending Balance                                   12,873           12,873           13,687             13,734           14,725  
--------       ----------       ----------       ------------      -----------  
Average Common Units Outstanding                 12,873           12,873           13,280             13,710           14,229 

Deferred Participation Units
Beginning Balance                                     -                -              909                909              909
DPUs Issued at Beginning of Year                    -                -                -                  -                -
--------       ----------       ----------       ------------      -----------    
Ending Balance                                        -                -              909                909              909

SR Subordinated Units
Beginning Balance - Sr Sub Units                                   2,491            2,491              2,491            2,491  
DPUs Issued                                                          -                -                  -                -  
Sr Sub Issuance                                                      -                -                  -                -  
Sr. Sub to E                                                         -                -                  -                -  
Sr Sub Converted to G.P. Interest                                    -                -                  -                -     
--------       ----------       ----------       ------------      -----------     
Ending Balance                                    2,491            2,491            2,491              2,491            2,491 
--------       ----------       ----------       ------------      -----------
Average Sr Subordinated Units Outstanding         2,491            2,491            2,491              2,491            2,491 

Subordinated Units
Beginning Balance                                                    431              431                431              431 
Issuance                                                             -                -                  -                - 
Buyback                                                              -                -                  -                -  
--------       ----------       ----------       ------------      -----------  
Ending Balance                                      431              431              431                431              431  
--------       ----------       ----------       ------------      ----------- 
Average Subordinated Units Outstanding              431              431              431                431              431  

GP Implied Units
Beginning Balance                                                    322              322                322              322 
Issued in conjuction with DPUs                                       -                -                  -                - 
Issued to Meet Debt Covenant Ratio                                   -                -                  -                - 
Issued to conjuction with E Equity                                   -                -                  -                - 
Buyback                                                              -                -                  -                - 
--------       ----------       ----------       ------------      -----------     
322              322              322                322              322  
--------       ----------       ----------       ------------      -----------
Average Implied GP Units Outstanding                322              322              322                322              322  

Total Units Outstanding                            16,118           16,118           16,932             16,979           17,970 
--------       ----------       ----------       ------------      -----------
Average Total Units Outstanding                    16,118           16,118           16,525             16,955           17,474   
========       ==========       ==========       ============      ===========  

Pro Forma Heating Oil Units Used for DPU 
Issue Calculation                                                                  10,111             10,408           10,735

2002
-------- 

Combined EBITDA                                  $ 81,169  
Consolidated Savings                                500  
--------  
Pro Forma EBITDA                                   81,669    
Depreciation and Amortization                    46,918  
--------  
EBIT                                               34,751  
Interest Expense                                (29,444)  
Interest Income                                       -     
Other Income                                          -      

EBT                                                 5,307   
--------  
Current Income Taxes                               (725) 
Deferred Income Taxes                                 -      
--------   
Net Income Available to Common                    $ 4,582  
========  
Pro Forma Full-Year EBITDA for Debt Covenant               
Analysis                                         85,597  

STAR PRO FORMA UNITS OUTSTANDING                           

Common Units                                            -  
Beginning Balance                                14,725  
Issuance                                            -   
Issued to meet Debt Covenant Ratio              1,035  
Issued to E                                         -  
Buyback                                             -  
--------   
Ending Balance                                   15,760   
--------   
Average Common Units Outstanding                 15,242  

Deferred Participation Units                                
Beginning Balance                                   909  
DPUs Issued at Beginning of Year                    -  
--------     
Ending Balance                                      909  

SR Subordinated Units                                      
Beginning Balance - Sr Sub Units                  2,491   
DPUs Issued                                         -   
Sr Sub Issuance                                     -   
Sr. Sub to E                                        -   
Sr Sub Converted to G.P. Interest                   -      
--------      
Ending Balance                                    2,491  
--------  
Average Sr Subordinated Units Outstanding         2,491  

Subordinated Units                                          
Beginning Balance                                   431   
Issuance                                            -  
Buyback                                             -   
--------   
Ending Balance                                      431   
--------  
Average Subordinated Units Outstanding              431   

GP Implied Units                                           
Beginning Balance                                   322  
Issued in conjuction with DPUs                      -  
Issued to Meet Debt Covenant Ratio                  -  
Issued to conjuction with E Equity                  -  
Buyback                                             -  
--------      
322   
--------  
Average Implied GP Units Outstanding                322   

Total Units Outstanding                            19,005  
--------  
Average Total Units Outstanding                    18,487    
========   

Pro Forma Heating Oil Units Used for DPU                   
Issue Calculation                                11,583  

13 of 19

====================================================================================================================================
(in thousands except per share and per unit date)

ACTUAL                                 PROJECTED
--------------------------------------------------
STAR PRO FORMA BALANCE SHEET                                  1998              1999           2000           2001          2002 
------            ------         ------        ------         ------

ASSETS:
Cash                                                      $ 14,882          $ 14,882       $ 14,882      $ 14,882       $ 14,882
Other Current Assets                                        80,877            76,323         86,627        91,818         96,661
--------          --------       --------      --------       --------
Total Current Assets                                     95,759            91,205        101,509       106,700        111,543 

PP&E and Intangibles, Net                                  269,617           258,704        265,032       267,974        267,697
Other Assets                                                12,796            12,796         12,796        12,796         12,796
--------          --------       --------      --------       -------- 
Total Assets                                            378,172           362,705        379,337       387,471        392,037
========          ========       ========      ========       ========

LIABILITIES:
Current Liabilities                                         90,453            85,899         96,203       101,394        106,237
8.25% Existing Credit Facility                               4,770             4,770          4,770         4,770          4,770
Total LT Debt                                              275,653           274,092        311,532       327,496        342,388 
Other Liabilities                                           10,726            10,726         10,726        10,726         10,726 
--------          --------       --------      --------       --------  
Total Liabilities                                       381,584           375,487        423,231       444,386        464,121

Preferred Stock                                                 -                 -              -             -              - 
Common Shareholder's Equity                                   (3,412)          (12,782)       (43,894)      (56,916)       (72,085)
--------          --------       --------      --------       --------
Total Liabilities and Equity                           $378,172          $362,705       $379,337      $387,471       $392,037
========          ========       ========      ========       ========
Check                         -                 -              -             -              - 

STAR PRO FORMA CASH FLOW STATEMENT
Net Income                                                                    $  3,225       $  6,855      $  5,372       $  4,582
Depreciation and Amortization                                                 37,186         40,065        43,574         46,918
Deferred Taxes                                                                     -              -             -              -
Other Assets/Liab                                                                  -              -             -              -
Change in Non-Cash Working Capital                                                 -              -             -              -
--------       --------      --------       --------
Cash from Operations                                                            40,441         46,920        48,946         51,500

Maintenance CapEx                                                             (6,273)        (6,393)       (6,516)        (6,641)
Internal Growth CapEx                                                              -              -             -              -
External Growth CapEx                                                        (20,000)       (40,000)      (40,000)       (40,000)
--------       --------      --------       --------
Cash from Investments                                                          (26,273)       (46,393)      (46,516)       (46,641)

Acquisition Borrowing                                                         20,000         40,000        40,000         40,000 
Remaining Distributions to Repay Debt                                         (3,624)        (1,530)       (2,239)        (2,339)
Amortization of Existing Debt                                                 (8,154)        (8,141)          (60)           (60) 
Borrowing to Repay Existing Debt                                               6,054          8,141            60             60 
Borrowing for Change in WC                                                         -              -             -              -
Change in Common Equity & GP Interest                                         17,919          1,030        21,797         22,769 
Repayment of Preferred Stock                                                       -              -             -              - 
Distributions                                                                (30,544)       (38,997)      (40,191)       (42,520)
--------       --------      --------       --------
Cash from Financing                                                              1,651            503        19,368         17,909

Net Cash Flow                                                                   15,819          1,030        21,797         22,769
Initial Cash Balance                                                            14,882         14,882        14,882         14,882
--------       --------      --------       --------
Cash Available for Paydown on WC Revolver and Acq. Facility                     30,701         15,912        36,679         37,651

Minimum Cash Balance                                                            14,882         14,882        14,882         14,882

Borrowing/(Paydown) on WC Revolver and Acq. Facility                           (15,819)        (1,030)      (21,797)       (22,769)
--------       --------      --------       --------
Ending Cash Balance                                                             14,882         14,882        14,882         14,882

Net Change in Cash                                                            $      0       $      0      $      0       $      0
========       ========      ========       ======== 

====================================================================================================================================
(in thousands except per share and per until data)

ACTUAL     NORMALIZED                    PROJECTED   
-------------------------------------------
STAR PRO FORMA DEBT SCHEDULE                          1998         1998        1999         2000      2001        2002 
-------    ----------   -------       ------    ------      -------

8.04% 1st Mortgage Notes                            
Beginning Balance                                  $85,000      $85,000      85,000       $85,000   $85,000    $85,000
Borrowing                                             -            -           -             -         -          -
Amortizaton                                           -            -           -             -         -          -  
-------      -------     -------       -------   -------    -------
Ending Balance                                      85,000       85,000      85,000        85,000    85,000     85,000
Interest Payment                  8.04%              6,834        6,834       6,834         6,834     6,834      6,834

7.17% Pearl Notes                                                                         
Beginning Balance                                   11,000       11,000      11,000        11,000    11,000     11,000 
Borrowing                                             -            -           -             -         -          -   
Amortizaton                                           -            -           -             -         -          -   
-------      -------     -------       -------   -------    ------- 
Ending Balance                                      11,000       11,000      11,000        11,000    11,000     11,000 
Interest Payment                  7.17%                613          613         789           789       789        789
% of year Pearl Notes Outstanding                     77.7%        77.7%                

10.13% Sub Notes & Sr Notes                                                               
Beginning Balance                                    50,000       50,000         -             -         -          -   
Borrowing                                              -            -           -             -         -          -  
Amortizaton                                        (50,000)     (50,000)        -             -         -          - 
-------      -------     -------       -------   -------    ------- 
Ending Balance                                          -            -           -             -         -          -  
Interest Payment                  10.13%                -            -           -             -         -          -  

9.38% Sub Notes & Sr Notes                                                                
Beginning Balance                                    75,000       75,000         -             -         -          -   
Borrowing                                              -            -           -             -         -          -   
Amortizaton                                        (75,000)     (75,000)        -             -         -          - 
-------      -------     -------       -------   -------    -------
Ending Balance                                          -            -           -             -         -          -   
Interest Payment                   9.38%                -            -           -             -         -          -  

12.25% Sub Notes & Sr Notes                                                               
Beginning Balance                                    81,250       81,250         -             -         -          - 
Borrowing                                              -            -           -             -         -          -  
Amortizaton                                        (81,250)     (81,250)        -             -         -          - 
-------      -------     -------       -------   -------    -------
Ending Balance                                          -            -           -             -         -          -  
Interest Payment                  12.25%                -            -           -             -         -          -

7.50% New Debt                                                                            
Beginning Balance                                       -            -        90,000        96,054   104,195    104,225
Borrowing                                           90,000       90,000       6,054         8,141        60         60
Amortizaton                                            -            -           -             -         -          -      
-------      -------     -------       -------   -------    -------          
Ending Balance                                       90,000       90,000      96,054       104,195   104,255    104,315 
Interest Payment                   7.50%              6,750        6,750       6,977         7,509     7,817      7,821  

Exchange of 11.96% Senior Notes
Beginning Balance                                       -            -        60,000        60,000    60,000     60,000       
Borrowing                                           60,000       60,000         -             -         -          -    
Amortizaton                                            -            -           -             -         -          -     
-------      -------     -------       -------   -------    -------      
Ending Balance                                       60,000       60,000      60,000        60,000    60,000     60,000        
Interest Payment                  10.90%              6,540        6,540       6,540         6,540     6,540      6,540          

8.00% Acq. & Other Notes Pay                            
Beginning Balance                                   16,507       16,507      14,435         8,381       240        180           
Borrowing                                             -            -           -             -         -          -        
Amortizaton                                        (2,072)      (2,072)     (6,054)       (8,141)      (60)       (60)   
------      -------     -------       -------    ------    -------        
Ending Balance                                      14,435       14,435       8,381           240       180        120    
Interest Payment                  8.00%              1,238        1,238         913           345        17         12    

15 of 19

- --------------------------------------------------------------------------------
(in thousands except per share and per unit data)

STAR PRO FORMA DEBT SCHEDULE (CONT'D)                         

Actual       Normalized                      Projected
------------------------------------------
1998           1998          1999       2000      2001       2002
----------    ------------  ----------   --------   -------   --------

Exchange of 14.10% Senior Notes                                                                                            
Beginning Balance                                              -              -         6,200       4,100      4,100     4,100 
Borrowing                                                 6,200          6,200             -           -          -         - 
Amortization                                                  -              -        (2,100)          -          -         - 
--------       --------      --------     -------    -------   -------
Ending Balance                                             6,200          6,200         4,100       4,100      4,100     4,100 
Interest Payment                   14.10%                    874            874           578         578        578       578 

7.25% WC Revolver                                                                                                                   
Beginning Balance                                              -              -         4,770       4,770      4,770     4,770 
Borrowing for Change in WC                                    -              -             -           -          -         - 
Borrowing to Pay Full MQD                                     -              -             -           -          -         - 
Borrowing/(Payment)                                       4,770          4,770             -           -          -         - 
--------       --------      --------     -------    -------   -------
Ending Balance                                             4,770          4,770         4,770       4,770      4,770     4,770 

Effective Avg WC Balance                                  10,179          9,044        11,338      11,338     11,338    11,338 
Interest Payment                    7.25%                    738            656           822         822        822       822 

7.25% Acquisition Facility                                                                                                          
Beginning Balance                                              -              -         9,000       9,557     46,997    62,961 
External Acquisitions                                     9,000          9,000        20,000      40,000     40,000    40,000 
External Acquisitions at Beginning of 1999                    -              -             -           -          -         - 
Internal Growth CapEx                                         -              -             -           -          -         - 
Payment                                                       -              -       (15,819)     (1,030)   (21,797)  (22,769)
Remaining Distributions to Repay Debt                         -         (1,419)       (3,624)     (1,530)    (2,239)   (2,339)
--------       --------      --------     -------    -------   -------
Ending Balance                                             9,000          7,581         9,557      46,997     62,961    77,853

Interest Payment                    7.25%               $      0           ($51)     $    673    $  2,050   $  3,986  $  5,105

Total Pro Forma Debt                            
Beginning Balance                                       $318,757       $318,757      $280,405    $278,862   $316,302  $332,266
Amortization of Existing Debt                          (208,322)      (208,322)       (8,154)     (8,141)       (60)      (60)
Exchange of Notes                                        66,200         66,200             -           -          -         -
Borrowing for Changes in WC                                   -              -             -           -          -         -
Acquisition Borrowing                                     9,000          9,000        20,000      40,000     40,000    40,000
Borrowing to Pay Full MQD                                     -              -             -           -          -         -
Borrowing to Repay Existing Debt                         90,000         90,000         6,054       8,141         60        60
Remaining Distributions to Repay Debt                         -         (1,419)       (3,624)     (1,530)    (2,239)   (2,339)
Borrowing/(Payment) on WC Revolver and Acq. Facility      4,770          4,770       (15,819)     (1,030)   (21,797)  (22,769)
--------       --------      --------     -------    -------   -------
Ending Balance                                           280,405        278,986       278,862     316,302    332,266   347,158 

Preferred Stock
Beginning Balance                                         34,167         34,167             -           -          -         -
Repayment                                              (34,167)       (34,167)            -           -          -         -
--------       --------      --------     -------    -------   -------
Ending Balance                                                 -              -             -           -          -         -

Dividend Payment                   14.33%                      -              -             -           -          -         -

Interest Expense/Dividends                                23,587         23,453        24,125      25,467     27,382    28,501
Chase Fees                                                   943            943           943         943        943       943
--------       --------      --------     -------    -------   -------
Total Interest Payment/Dividends                      $ 24,530       $ 24,396      $ 25,068    $ 26,410   $ 28,325  $ 29,444
========       ========      ========     =======    =======   =======

16 of 19

- --------------------------------------------------------------------------------
(IN THOUSANDS EXCEPT PER SHARE AND PER UNIT DATA)

STAR PRO FORMA DISTRIBUTION SCHEDULE OF ACTUAL DISTRIBUTIONS

Actual     Normalized                  Projected 
----------------------------------------
1998        1998           1999      2000      2001       2002  
-----------  ------------   ---------  --------  --------   --------

Distributable Cash                                                                                                             
- ------------------                                                                                                             
Cash from Operations (excel chg in WC)                          29,280      44,614        $40,441   $46,920   $48,946    $51,500    
Maintenance CapEx                                          (6,125)     (6,125)        (6,273)   (6,393)   (6,516)    (6,641)   
Other                                                           -           -              -         -         -         -
--------      ------        -------   -------   -------    ------
23,155      38,489         34,168    40,527    42,429    44,859 
Total MLP Distributable Cash Flow                                     

Distributable Cash Flow/Unit                                   $  1.44     $  2.39        $  2.07   $  2.39   $  2.43   $  2.43
Distributable Cash Flow/Unit Pro Forma for DPU Conversion

Average Units for Calculating Annual Distributions
- --------------------------------------------------
Common Units                                                    12,873      12,873         13,280    13,710    14,229    15,242
SR Subordinated Units                                            2,491       2,491          2,491     2,491     2,491     2,491
Subordinated Units                                                 431         431            431       431       431       431
General Partner Interest Unit Equivalent                           322         322            322       322       322       322
--------      ------        -------   -------   -------    ------
Total Units Outstanding                                         16,118      16,118         16,525    16,955    17,474    18,487

Distribution Levels                                            $  2.30     $  2.30        $  2.30   $  2.30   $  2.30   $  2.30
- -------------------                                                                                                     
MQD                                                            $  2.30     $  2.30        $  2.30   $  2.30   $  2.30   $  2.30
First Target                                                   $  2.42     $  2.42        $  2.42   $  2.42   $  2.42   $  2.42
Second Target                                                  $  2.84     $  2.84        $  2.84   $  2.84   $  2.84   $  2.84
Third Target                                                   $  3.70     $  3.70        $  3.70   $  3.70   $  3.70   $  3.70

Indicated Cash Distribution                                    $  2.30     $  2.30        $  2.30   $  2.30   $  2.30   $  2.30

Distribution of MQD
- -------------------
Cash Available                                                  23,155      38,489         34,168    40,527    42,429    44,859
Allocation to:                                                                                                           
Common Units                                               23,155      29,607         30,544    31,534    32,727    35,057
SR Subordinated Units                                           0       5,730              0     5,730     5,730     5,730
Subordinated Units                                              0         992              0       992       992       992
General Partner Interest                                        0         741              0       741       741       741

First Target Distribution                                                                                                
- -------------------------                                                                                                
Cash Available                                                       0       1,419          3,624     1,530     2,239     2,339

Cash Required for Target Distribution                           0       1,934          1,984     2,037     2,100     2,224
Cash Required for Indicated Distribution                        0           0              0         0         0         0
Actual Cash Distributed                                         0           0              0         0         0         0
Allocation to:                                                                                                                 
Common Units                                                    0           0              0         0         0         0
SR Subordinated Units                                           0           0              0         0         0         0
Subordinated Units                                              0           0              0         0         0         0
General Partner Interest                                        0           0              0         0         0         0

Total Distributions to:                                                                                                   
Common Units                                                0           0              0         0         0         0
Sr. Subordinated Units                                      0           0              0         0         0         0
Subordinated Units                                          0           0              0         0         0         0
General Partner Interest                                    0           0              0         0         0         0

17 of 19

================================================================================
(in thousands except per share and per unit data)

STAR GAS PRO FORMA SCHEDULE OF ACTUAL DISTRIBUTIONS (CONT'D)

Actual    Normalized                   Projected                
--------------------------------------  
1998        1998         1999      2000      2001      2002    
--------  ------------   --------  --------  --------  --------  

Second Target Distribution                                                                                              
- --------------------------                                                                                              
Cash Available                                               0             0          0         0         0         0   

Cash Required for Target Distribution                   0             0          0         0         0         0   
Cash Required for Indicated Distribution                0             0          0         0         0         0   
Actual Cash Distributed                                 0             0          0         0         0         0   

Allocation to:                                                                                                          
Common Units                                            0             0          0         0         0         0   
SR. Subordinated Units                                  0             0          0         0         0         0   
Subordinated Units                                      0             0          0         0         0         0   
General Partner Interest                                0             0          0         0         0         0   
Incentive Right                                         0             0          0         0         0         0   
Incentive Right to GP Interest                     0             0          0         0         0         0   
Incentive Right to Sub Units                       0             0          0         0         0         0   
Incentive Right to Sr. Sub Units                   0             0          0         0         0         0   

Total Distributions to:                                                                                            
Common Units                                       0             0          0         0         0         0   
Sr. Subordinated Units                             0             0          0         0         0         0   
Subordinated Units                                 0             0          0         0         0         0   
General Partner Interest                           0             0          0         0         0         0   

Third Target Distribution                                                                                               
- -------------------------                                                                                               
Cash Available                                               0             0          0         0         0         0   

Cash Required for Target Distribution                   0             0          0         0         0         0   
Cash Required for Indicated Distribution                0             0          0         0         0         0   
Actual Cash Distributed                                 0             0          0         0         0         0   

Allocation to:                                                                                                          
Common Units                                            0             0          0         0         0         0   
Sr. Subordinated Units                                  0             0          0         0         0         0   
Subordinated Units                                      0             0          0         0         0         0   
General Partner Interest                                0             0          0         0         0         0   
Incentive Right                                         0             0          0         0         0         0   
Incentive Right to GP Interest                     0             0          0         0         0         0   
Incentive Right to Sub Units                       0             0          0         0         0         0   
Incentive Right to Sr. Sub Units                   0             0          0         0         0         0   

Total Distributions to:                                                                                            
Common Units                                       0             0          0         0         0         0   
Sr. Subordinated Units                             0             0          0         0         0         0   
Subordinated Units                                 0             0          0         0         0         0   
General Partner Interest                           0             0          0         0         0         0   

Remaining Distribution                                                                                                  
- ----------------------                                                                                                  
Cash Available                                               0             0          0         0         0         0   

Cash Required for Indicated Distribution                0             0          0         0         0         0   
Actual Cash Distributed                                 0             0          0         0         0         0   

Allocation to:                                                                                                          
Common Units                                            0             0          0         0         0         0   
Sr. Subordinated Units                                  0             0          0         0         0         0   
Subordinated Units                                      0             0          0         0         0         0   
General Partner Interest                                0             0          0         0         0         0   
Incentive Right                                         0             0          0         0         0         0   
Incentive Right to GP Interest                     0             0          0         0         0         0   
Incentive Right to Sub Units                       0             0          0         0         0         0   
Incentive Right to Sr. Sub Units                   0             0          0         0         0         0   
Repay Indebtedness                                      0         1,419      3,624     1,530     2,239     2,339   

Total Distributions to:                                                                                            
Common Units                                       0             0          0         0         0         0   
Sr. Subordinated Units                             0             0          0         0         0         0   
Subordinated Units                                 0             0          0         0         0         0   
General Partner Interest                           0             0          0         0         0         0    

18 of 19

================================================================================
STAR GAS PRO FORMA SCHEDULE OF ACTUAL DISTRIBUTIONS (CONT'D)

(in thousands except per share and per unit data) 

Actual     Normalized                                         
---------------------------------------
1998        1998       1999        2000       2001    2002    
-------     -------    --------     ------     ------  ------  

TOTAL DISTRIBUTIONS                                                                                                                
- -------------------                                                                                                                
Common Units                                                        $23,155     $29,607     $30,544     $31,534   $32,727  $35,057
SR Subordinated Units                                                     0       5,730           0       5,730     5,730    5,730
Subordinated Units                                                        0         992           0         992       992      992
General Partner Interest                                                  0         741           0         741       741      741
-------     -------     -------     -------   -------  -------
Total Distributions                                            $23,155     $37,070     $30,544     $38,997   $40,191  $42,520
=======     =======     =======     =======   =======  =======

14,042      14,042      14,110      14,404    14,826   15,189
Total Distributions Per Unit                                                                                                     
- -----------------------------                                                                                                     
Common Units                                                          $1.80     $  2.30     $  2.30     $  2.30   $  2.30  $  2.30
SR Subordinated Units                                                  0.00        2.30        0.00        2.30      2.30     2.30
Subordinated & GP Units                                                0.00        2.30        0.00        2.30      2.30     2.30

19 of 19

EXHIBIT (b)(21)

Appendix II to

FAIRNESS OPINION PRESENTATION TO THE 
SPECIAL COMMITTEE OF THE BOARD OF DIRECTORS OF
STAR GAS CORPORATION

Analyses performed under 15-year weather scenario
Changed Pages Only

CONFIDENTIAL

A.G.EDWARDS & SONS, INC.
INVESTMENT BANKING

February 10, 1999

TABLE OF CONTENTS

Please note: Appendix II follows the same page numbering format as Appendix I 
and contains only those pages that changed as a result of performing the 
analyses under the 15-year weather scenario. Appendix II should be read in 
conjunction with Appendix I.

Section
-------

Overview of Petroleum Heat and Power Co., Inc.........................     A
Overview of Star Gas Partners, L.P....................................     B
Pro Forma Merger Analysis.............................................     E
Relative Contribution Analysis........................................     G
Discounted Cash Flow Analysis.........................................     H
Comparable Transactions Analysis......................................     I
Public Partnership Analysis...........................................     J
Pro Forma Model.......................................................     K

OVERVIEW OF PETRO
EBITDA PROJECTIONS
($ in thousands)

- -------------------------------------------------------------------------------------------
PROJECTED
----------------------------------------------
ACTUAL   ACTUAL     NORMALIZED     ADJUSTED FOR
LTM 9/98   1998         1998         ACTUAL 1999   2000     2001     2002
---------------------------------------------------------------------------------

EBITDA       $34,929    $30,612    $44,749        $43,475      $45,978   $48,375  $50,509

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

MAJOR ASSUMPTIONS FOR 1999 - 2002
- ---------------------------------

[_]  15 Year Weather

[_]  Flat Attrition.

[_]  $15 million in 1999 and $30 million in 2000 to 2002 of acquisitions at 
4.75x EBITDA multiple using half-year convention.

[_]  Increase in gross profit margin of $0.01 in 1999 and $0.005 in 2000 to 
2002.

Page A-8

OVERVIEW OF STAR GAS
EBITDA PROJECTIONS
($ in thousands)

- ------------------------------------------------------------------------------
PROJECTED
-------------------------------------------
ACTUAL    NORMALIZED     ADJUSTED FOR
1998        1998         ACTUAL 1999   2000    2001    2002
--------------------------------------------------------------------

EBITDA       $18,906    $20,731        $20,415     $23,749  $25,182  $26,615

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

MAJOR ASSUMPTIONS FOR 1999 - 2002
- ---------------------------------

[_]  15 Year Weather

[_]  No growth in base business.

[_]  $5 million in 1999 and $10 million in 2000 to 2002 of acquisitions at 6.5x 
EBITDA multiple using half-year convention.

[_]  No increase in gross profit margin.

Page B-4

PRO FORMA MERGER ANALYSIS

[_]  A.G. Edwards analyzed the impact of the Transaction on the Partnership's
distributable cash flow per unit, the related accretion, common unit
coverage and total unit coverage on a pro forma basis.

-----------------------------------------------------------------
STAR GAS       STAR GAS
STAND-ALONE     PRO FORMA
-----------     ---------

DCF PER UNIT
1998 Actual                        $1.30          $1.44
1999 Adjusted for Actual (a)        1.41           1.96
2000 Projected                      1.77           2.14

ACCRETION/DILUTION
1998 Actual                                       $0.13
1999 Adjusted for Actual (a)                       0.56
2000 Projected                                     0.37

COMMON UNIT COVERAGE
1998 Actual                         0.98x          0.78x
1999 Adjusted for Actual (a)        1.04           1.06
2000 Projected                      1.27           1.14

TOTAL UNIT COVERAGE
1998 Actual                         0.59x          0.62x
1999 Adjusted for Actual (a)        0.64           0.85
2000 Projected                      0.80           0.93

-----------------------------------------------------------------
(a) Adjusted to include actual results through January 21, 1999.

Page E-1

RELATIVE CONTRIBUTION ANALYSIS (a)
($ IN THOUSANDS)

[_]   A.G.Edwards analyzed the relative pro forma contribution
of both Star Gas and Petro to the ownership of capital in
the pro forma entity based on Star Gas' and Petro's
historical results from operations and their respective
projections.

STAR GAS' AVERAGE                     GROSS PROFIT
GROSS PROFIT  
CONTRIBUTION                      [GRAPH APPEARS HERE]

96-98     27.5%

99-00     29.2%

96-00     28.2%

EBITDA (B)
STAR GAS' AVERAGE           
EBITDA CONTRIBUTION               [GRAPH APPEARS HERE]

96-98     35.4%

99-00     33.1%

96-00     34.5%

- -----------------------------------------
(a)  For purposes of its analysis, A.G. Edwards converted Petro's historical
December 31st fiscal year-end to a September 30th fiscal year-end for
comparison purposes. Other measures of relative contribution analysis are
non-meaningful.
(b)  Includes only heating oil EBITDA for Petro.

Page G-1

RELATIVE CONTRIBUTION ANALYSIS
($ IN THOUSANDS)
(continued)

For Star Gas' contribution of approximately 28.2% of the combined entity's gross
profit and 34.5% of the combined entity's EBITDA, it will receive approximately 
34.8% of the implied firm value.

IMPLIED FIRM VALUE

[PIE CHART APPEARS HERE]

Page G - 2

DISCOUNTED CASH FLOW ANALYSIS

[_]  A. G. Edwards performed discounted cash flow analyses for Petro, Star Gas
and Star Gas Pro Forma. For Petro, A. G. Edwards used projected tax-
adjusted operating cash flows for 1999 through 2002, terminal values
calculated on 2002 operating cash flow, and discount rates based on the
related weighted average cost of capital. For Star Gas and Star Gas Pro
Forma, A. G. Edwards used projected DCF for 1999 through 2002, terminal
values calculated on 2002 DCF and discount rates based on the related cost
of equity.

Assumptions:

[_]  Weighted average cost of capital ("WACC")
- Petro Stand Alone of 13.4% to 13.9% (calculated WACC of 13.6%)

[_]  Cost of Equity
- Star Gas Stand Alone of 9.5% to 10.3% (calculated cost of equity of 9.9%)
- Star Gas Pro Forma of 9.5% to 10.3% (calculated cost of equity of 9.9%)

[_]  Terminal value operating cash flow multiple
- Petro Stand Alone of 8.0x to 10.0x (calculated 2000 operating cash flow
multiple of 9.1x)

[_]  Terminal value DCF multiple
- Star Gas Stand Alone and Star Gas Pro Forma of 8.5x to 10.5x (calculated 
2000 DCF multiple of 9.5x)

Page H - 1

DISCOUNTED CASH FLOW ANALYSIS
(continued)

PETRO STAND ALONE
- ------------------------------------------------------------ 
TERMINAL VALUE OPERATING CASH FLOW MULTIPLE  
15 YEAR    ------------------------------------------------   
WACC      8.0x      8.5x       9.0x       9.5x     10.0x 
- ------------------------------------------------------------

13.4%    ($40,163)  ($30,848)  ($21,534) (12,219)  (2,904)   

13.6%     (41,742)   (32,500)   (23,259) (14,017)  (4,775)

13.9%     (43,307)  (343,137)   (24,967) (15,797)  (6,628)     
- ------------------------------------------------------------

STAR GAS STAND ALONE
- --------------------------------------------------------------

TERMINAL VALUE DCF MULTIPLE   
15 YEAR         -------------------------------------------
COST OF EQUITY       8.5x     9.0x     9.5x    10.0x    10.5x                  
- --------------------------------------------------------------

9.5%             $77,230  $80,338  $83,447  $86,555  $89,664      

9.9%              76,359   79,427   82,495   85,563   88,631 

10.3%              75,502   78,530   81,559   84,587   87,616  
- --------------------------------------------------------------

STAR GAS PRO FORMA
- ------------------------------------------------------------------
TERMINAL VALUE DCF MULTIPLE      
15 YEAR         -----------------------------------------------    
COST OF EQUITY        8.5x      9.0x     9.5x     10.0x    10.5x  
- ------------------------------------------------------------------

9.5%               $92,737  $96,408  $100,079  $103,750 $107,421  

9.9%                91,701   95,324    98,948   102,571  106,194

10.3%                90,682   94,258    97,834   101,411  104,987        
- ------------------------------------------------------------------

Page H-2

DISCOUNTED CASH FLOW ANALYSIS
PETRO - STAND ALONE
EXCLUDING DISTRIBUTIONS FROM STAR GAS
($ IN THOUSANDS)

- ------------------------------------------------------------------------------------------------------------------------------------
ADJUSTED FOR                                                  
ACTUAL                                                     
CASH FLOW SUMMARY (a):                                          1999           2000           2001           2002         TERMINAL  
- -----------------                                           ------------   ------------   ------------   ------------   ------------

EBITDA                                                           $41,939        $39,988        $36,799        $33,785  

Taxes                                                               (500)          (500)          (500)          (500)

Maintenance capital expenditures                                  (3,641)        (3,714)        (3,788)        (3,864)  

Working capital increases (b)                                       (500)          (500)          (500)          (500)
------------   ------------   ------------   ------------
Net Operating cash flow (free cash flow)                          37,298         35,274         32,011         28,921

---------
WEIGHTED AVERAGE COST OF CAPITAL (c)              13.6% 
---------

---------
TERMINAL OPERATING CASH FLOW MULTIPLE (d)          9.1x 
---------

Discount factor (e)                                               0.9380         0.8254         0.7263         0.6391        0.6391

Terminal value (f)                                                                                                         $263,181

---------
PRESENT VALUE                                 $274,040           $34,987        $29,116        $23,250        $18,484      $168,202 
---------      ------------   ------------   ------------   ------------   ------------

Current net debt and preferred stock (g)     ($295,450) 
---------

---------
NET PRESENT VALUE OF HEATING OIL EQUITY       ($21,410)     
---------

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

(a)  Based on management projections.
(b)  A. G. Edwards' estimate.
(c)  Based on comparable companies WACC.
(d)  Petro's current firm value of $322.1 million/$35.3 million 15-year weather 
2000 net operating cash flow=9.1x.
(e)  Discounted back to mid-year 1999.
(f)  Terminal value calculated using operating cash flow multiple.
(g)  Net of $13.8 million of cash. Market value of debt used.

Page H - 3

DISCOUNTED CASH FLOW ANALYSIS
STAR GAS - STAND ALONE
($ IN THOUSANDS)

- ------------------------------------------------------------------------------------------------------------------------------------
ADJUSTED FOR                                                  
ACTUAL                                                     
DISTRIBUTABLE CASH FLOW SUMMARY (a):                            1999           2000           2001           2002         TERMINAL  
- -------------------------------                             ------------   ------------   ------------   ------------   ------------

EBITDA                                                            20,415         23,749         25,182         26,615  

Interest expense                                                  (8,600)        (8,885)        (9,307)        (9,788)

Maintenance capital expenditures                                  (2,553)        (2,599)        (2,646)        (2,694)  

Cash taxes                                                           (25)           (25)           (25)           (25)
------------   ------------   ------------   ------------
Distributable cash flow                                            9,237         12,240         13,204         14,108

-----------
COST OF EQUITY (b)                                 9.9%
-----------

-----------
TERMINAL DCF MULTIPLE (c)                          9.5x
-----------

Discount factor (d)                                               0.9540         0.8684         0.7904         0.7194        0.7194

Terminal value (e)                                                                                                         $134,026

-----------
PRESENT VALUE                                 $136,446            $8,812        $10,629        $10,436        $10,149      $ 96,419 
-----------    ------------   ------------   ------------   ------------   ------------

Common units/Total units (f)                      60.5% 
-----------

===========
EQUITY VALUE TO COMMON UNITS (g)              $ 82,495      
===========
- ------------------------------------------------------------------------------------------------------------------------------------

(a)  Based on management projections.
(b)  Based on cost of equity calculation per WACC analysis.
(c)  Star's current equity market value of $115.3 million/$12.2 million 15-year
weather 2000 DCF=9.5x.
(d)  Discounted back to mid-year 1999.
(e)  Terminal value calculated using DCF multiple.
(f)  Total units include common, subordinated and GP units.       
(g)  Current market value of common units is 3,858 units * $18.06 unit 
price=$69,685.

Page H - 4

DISCOUNTED CASH FLOW ANALYSIS
STAR GAS - PRO FORMA
($ IN THOUSANDS)

- ------------------------------------------------------------------------------------------------------------------------------------
ADJUSTED FOR                                                  
ACTUAL                                                     
DISTRIBUTABLE CASH FLOW SUMMARY (a):                            1999           2000           2001           2002         TERMINAL  
- -------------------------------                             ------------   ------------   ------------   ------------   ------------

EBITDA                                                            64,390         70,227         74,057         77,624  

Interest expense                                                 (24,819)       (25,600)       (27,180)       (28,252)

Maintenance capital expenditures                                  (6,194)        (6,313)        (6,434)        (6,558)  

Cash taxes                                                          (525)          (625)          (675)          (725)
------------   ------------   ------------   ------------
Distributable cash flow                                           32,852         37,689         39,768         42,089

---------
COST OF EQUITY (b)                                 9.9%
---------

---------
TERMINAL DCF MULTIPLE (c)                          9.5x
---------

Discount factor (d)                                               0.9540         0.8682         0.7901         0.7191        0.7191

Terminal value (e)                                                                                                         $399,846

---------
PRESENT VALUE                                 $413,265           $31,340        $32,721        $31,422        $30,265      $287,517 
---------      ------------   ------------   ------------   ------------   ------------

Original Common units/Total units (f)             23.9% 
---------

---------
EQUITY VALUE TO COMMON UNITS (g)               $98,948      
---------
- ------------------------------------------------------------------------------------------------------------------------------------

(a)  Based on management projections. See Appendix K for model.
(b)  Based on cost of equity calculation per WACC analysis.
(c)  Star's current firm value of $115.3 million/$12.2 million 15-year weather
2000 DCF=9.5x.
(d)  Discounted back to mid-year 1999.
(e)  Terminal value calculated using DCF multiple.
(f)  Total units include common, newly issued common, senior subordinated, 
subordinated and GP units.
(g)  Current market value of common units is 3,858 units * $18.06 unit 
price=$69,685.

Page H - 5

COMPARABLE TRANSACTIONS ANALYSIS
FIRM VALUATION

[_]    A.G. Edwards noted that public disclosure regarding transactions in
the retail home heating oil distribution industry was extremely
limited.

[_]    A.G. Edwards analyzed the financial terms related to divestitures by
Petro of its retail home heating oil branches and compared them to the
implied multiples of the aggregate purchase price of Petro's heating
oil assets.

[_]    Petro has sold three branches for an average EBITDA multiple of 9.0x.

[_]    A.G. Edwards calculated the purchase price of Petro's heating oil
assets and calculated multiples based on Petro's EBITDAs.

------------------------------------------------------------------------
PURCHASE PRICE OF HEATING OIL ASSETS
----------------------------------------

Equity purchase price of heating oil assets including CUs     $  16,054

Cost of Debt to be Redeemed ($206,250 + $2,844 premium)         209,094

Cost of Debt to be Assumed                                       80,501

Cost of Preferred stock at Redemption Value                      31,767

Consent Fees                                                      1,961

Transaction Fees                                                 19,139
---------

Aggregate purchase price of heating oil assets                $ 358,516
=========

MULTIPLES
-------------------------                              ---------------      
MULTIPLES            NOTES
---------------         ------------------------------------------------

Actual 4 quarters ended 9/30/98 EBITDA (a)   34,929         10.3    x          As a multiple of aggregate transaction value.

Adjusted for actual 1999 EBITDA (a)          43,475          8.2    x          As a multiple of aggregate transaction value.

Projected 2000 EBITDA (a)                    45,978          7.8    x          As a multiple of aggregate transaction value.
---------------

______________________
(a) Calculated as gross profit minus SG&A expense and direct delivery expense.

Page I-1

PUBLIC PARTNERSHIP ANALYSIS

[_]  A.G. Edwards compared certain financial and market information of Star Gas
on a historical and pro forma basis to that of certain public propane
master limited partnerships which A.G. Edwards deemed relevant for the
purposes of this analysis. A.G. Edwards reviewed the trading multiples
from a total of five master limited partnerships.

[_]  The selected propane master limited partnerships are as follows:
- AmeriGas Partners, L.P.               - Heritage Propane Partners, L.P.
- Cornerstone Propane Partners, L.P.    - Suburban Propane Partners, L.P.
- Ferrellgas Partners, L.P.

[_]  No partnership used in the analysis is identical to Star Gas.

PUBLIC COMPARABLE PARTNERSHIPS (a)
---------------------------------------------------------------------------------------------------
PUBLIC         PUBLIC  
PRO FORMA      PARTNERSHIP    PARTNERSHIP 
STAR         STAR          MEDIANS         RANGES
---------------------------------------------------------------------------------------------------

Distribution yield                      12.2%        12.7%           10.4%      8.6% to 12.3%
Market capitalization/LTM EBITDA        11.9x        10.3x           11.5x      9.1x to 13.2x
Market capitalization/1999E EBITDA      11.0x (b)     8.7x (b)        9.8x      8.6x to 11.3x
Equity Market Cap/LTM DCF               13.8x        12.6x           13.2x      9.6x to 15.5x
Equity Market Cap/1999E DCF             12.5x (c)     8.9x (c)       10.5x      9.9x to 12.2x
LTM common unit coverage                 1.0x         0.8x            1.5x      0.8x to  1.9x
1999E common unit coverage               1.0x (d)     1.1x (d)        2.0x      0.9x to  2.2x
LTM total unit coverage                  0.6x         0.6x            0.8x      0.5x to  1.1x
1999E total unit coverage                0.6x (d)     0.9x (d)        1.1x      0.6x to  1.1x
---------------------------------------------------------------------------------------------------

(a) Public comparable partnerships include: APU, CNO, FGP, HPG and SPH.
(b) Market capitalization/adjusted for actual 1999 EBITDA.
(c) Equity market cap/adjusted for actual 1999 EBITDA.
(d) Adjusted for actual 1999.

Page J-1

PUBLIC PARTNERSHIP ANALYSIS
($ IN MILLIONS, EXCEPT PER UNIT DATA)

====================================================================================================================================

Closing      Implied     Implied                                Common
Price on   Market Value    Firm     Distribution                Units/  
Company                                        Ticker    (2/3/99)    of Equity     Value       per Unit      Yield   Total Units(a)
- ------------------------------------------------------------------------------------------------------------------------------------

Star Gas Partners, L.P.                         SGU      $18.063     $ 115.3       $ 225.2       $2.20        12.2%      60.5%  

AmeriGas Partners, L.P.                         APU       23.625     1,009.8       1,724.0        2.20         9.3%      51.7% 
Cornerstone Propane Partners, L.P. (c) (d)      CNO       17.500       355.6         610.4        2.16        12.3%      65.5% 
Ferrellgas Partners, L.P.          (d) (e)      FGP       18.688       596.8       1,185.7        2.00        10.7%      46.0% 
Heritage Propane Partners, L.P.    (d)          HPG       23.750       207.9         403.8        2.05         8.6%      55.7% 
Suburban Propane Partners, L.P.    (f)          SPH       19.188       562.4         930.8        2.00        10.4%      73.6% 

- ------------------------------------------------------------------------------------------------------------------------------------
Mean                                                                                                          10.3%      58.5% 
Median                                                                                                        10.4%      55.7%
====================================================================================================================================
Pro Forma                                                $18.063      $291.1       $ 557.7 (g)   $2.30        12.7%      79.9%  

================================================================================================================================

LTM Common       LTM Total       FY99E       FY99E Common     FY99E Total
Unit Coverage    Unit Coverage    DCF/unit     Unit Coverage    Unit Coverage
- --------------------------------------------------------------------------------------------------------------------------------

Star Gas Partners, L.P.                             1.0x (b)        0.6x (b)       $1.41          1.0x              0.6x  

AmeriGas Partners, L.P.                             1.5x            0.8x            2.35          2.0x              1.1x
Cornerstone Propane Partners, L.P. (c) (d)          0.8x            0.5x            1.36          0.9x              0.6x  
Ferrellgas Partners, L.P.          (d) (e)          1.5x            0.7x            2.14          2.2x              1.1x
Heritage Propane Partners, L.P.    (d)              1.9x            1.1x            2.35          2.0x              1.1x
Suburban Propane Partners, L.P.    (f)              1.3x            1.0x            2.08          1.2x              1.0x

- --------------------------------------------------------------------------------------------------------------------------------
Mean                                                1.4x            0.8x                          1.7x              1.0x
Median                                              1.5x            0.8x                          2.0x              1.1x
================================================================================================================================
Pro Forma                                           0.8x (b)        0.6x (b)        1.96          1.1x              0.9x

_____________________________________
1999 estimates per A.G. Edwards' research (not adjusted for actual 1999 
results), except for Star and Pro Forma.
Implied Firm Value equals, for comparative purposes, common, subordinated and GP
units, multiplied by the market price of common units plus debt, less cash.
(a) Calculated as (common units/ ((common + subordinated units)/0.98).
(b) For Star and Pro forma only, LTM figures are 1998 actuals.
(c) Financial figures not pro forma for acqusition of Propane Continental Inc.
(d) Maintenance capital expenditures assumed to be 8% of EBITDA due to lack of 
disclosure.
(e) Financial figures exclude ESOP charge of $0.9 million.
(f) Financial figures exclude $5.1 million gain from sale of minority interest 
and $1.8 million loss from impairment of assets.
(g) $291.1 in equity plus $286.2 pro forma debt, less $19.6 in cash and cash 
collateral.

Page J-2

PUBLIC PARTNERSHIP ANALYSIS
($ IN MILLIONS, EXCEPT PER UNIT DATA)
(continued)

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

TOTAL         LTM          FIRM VALUE/    FIRM VALUE/      EQUITY         EQUITY   
DEBT/        EBITDA/           LTM          1999E        MARKET CAP/    MARKET CAP/
FIRM VALUE     INT. EXP.         EBITDA        EBITDA         LTM DCF       1999E DCF 
---------------------------------------------------------------------------------------

STAR GAS PARTNERS, L.P.                    51.4%          2.4x (a)       11.9x (a)      11.0x          13.8x (a)      12.5x   

AmeriGas Partners, L.P.                    41.7%          2.3x           11.5x           9.8x          13.7x          10.6x    
Cornerstone Propane Partners, L.P.         43.1%          2.4x           13.2x          11.3x          15.5x          12.2x
Ferrellgas Partners, L.P.                  50.1%          2.1x           11.8x           9.5x          13.2x           9.9x
Heritage Propane Partners, L.P.            49.1%          2.5x           10.7x          10.3x          10.6x          10.2x
Suburban Propane Partners, L.P.            46.0%          3.3x            9.1x           8.6x           9.6x          10.5x

- ------------------------------------------------------------------------------------------------------------------------------- 
MEAN                                       46.0%          2.5x           11.3x           9.9x          12.5x          10.7x  
MEDIAN                                     46.0%          2.4x           11.5x           9.8x          13.2x          10.5x
- -------------------------------------------------------------------------------------------------------------------------------

PRO FORMA                                  51.3%          2.2x (a)       10.3x (a)       8.7x          12.6x (a)       8.9x

__________________________________
EBITDA is defined as net income (loss) before extraordinary items plus interest,
income taxes, depreciation and amortization, impairment expense, and other 
non-recurring and non-operating items.
(a) For Star and Pro forma only, LTM figures are 1998 actuals.

Page J - 3

TRANSACTION SUMMARY AND ASSUMPTIONS

(in thousands except per share and per unit data)

- ---------------------------------------------------------------------------------------------------------------------------------
SUMMARY CASH FLOW AND COVERAGE ANALYSIS
- ---------------------------------------------------------------------------------------------------------------------------------
($ on per Unit basis)                                                                           PROJECTED                  
----------------------------------------------------
ACTUAL     NORMALIZED     ADJ. FOR ACTUAL                                            
1998         1998             1999            2000         2001         2002        
--------    ----------       -----------      ---------    --------     ---------      

STAR STAND ALONE                                                                                                                   
EBITDA                                    $ 18,906    $  20,731        $  20,415        $  23,749    $ 25,182     $  26,615   
Interest Expense                           (7,927)      (7,667)          (8,600)          (8,885)     (9,307)       (9,788)  
Maintenance CapEx                          (2,625)      (2,610)          (2,553)          (2,599)     (2,646)       (2,694)  
Other                                         (25)         (25)             (25)             (25)        (25)          (25)  
--------    ----------       ----------       ---------    --------     ---------    
Distributable Cash Flow                   $  8,329    $  10,429        $   9,237        $  12,240    $ 13,204     $  14,108   
========    ==========       ==========       =========    ========     =========   

DCF per Common Unit                       $   2.16    $    2.70        $    2.29        $    2.79    $   2.80     $    2.82   
DCF/Common Unit MQD                           0.98 x       1.23  x          1.04 x           1.27 x      1.27 x        1.28 X 

DCF per Total Unit                        $   1.30    $    1.63        $    1.41        $    1.77    $   1.82     $    1.87    
DCF/Total MQD                                 0.59 x       0.74  x          0.64 x           0.80 x      0.83 x        0.85 x

Indicated Distribution per Common Unit    $   2.20    $    2.20        $    2.20        $    2.20    $   2.20     $    2.20

STAR PRO FORMA
EBITDA
------
Star                                     $ 18,906    $  20,731        $  20,415        $  23,749    $ 25,182     $  26,615 
Petro                                      34,929       40,749           43,475           45,978      48,375        50,509
Synergies                                     500          500              500              500         500           500
--------    ----------       ----------       ---------    --------     ---------    
Total                                       54,335       65,980           64,390           70,227      74,057        77,624 
--------    ----------       ----------       ---------    --------     ---------    

Interest Expense                           (24,530)     (24,448)         (24,819)         (25,600)    (27,180)      (28,252)
Maintenance CapEx                           (6,125)      (6,125)          (6,194)          (6,313)     (6,434)       (6,558)
Other                                         (525)        (525)            (525)            (625)       (675)         (725)
--------    ----------       ----------       ---------    --------     ---------    
Distributable Cash Flow                    23,155       34,882           32,852           37,689      39,768        42,089
========    ==========       ==========       =========    ========     =========   

DCF per Common Unit                       $   1.80    $    2.71      $      2.44        $    2.63    $   2.63     $    2.58    
DCF per Sr. Sub & Common Unit             $   1.51    $    2.27      $      2.06        $    2.24    $   2.25     $    2.24
DCF per Total Unit                        $   1.44    $    2.16      $      1.96        $    2.14    $   2.16     $    2.15

Indicated Distribution per Common Unit    $   2.30    $    2.30      $      2.30        $    2.30    $   2.30     $    2.30
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
Accretion/Dilution
- ---------------------------------------------------------------------------------------------------------------------------------
DCF per Unit - Star Stand Alone           $   1.30    $    1.63      $      1.41        $    1.77    $   1.82     $    1.87
DCF per Unit - Pro Forma                  $   1.44    $    2.16      $      1.96        $    2.14    $   2.16     $    2.15
- ---------------------------------------------------------------------------------------------------------------------------------
Accretive ($/Unit)                       $   0.13    $    0.53      $      0.56        $    0.37    $   0.34     $    0.29
Accretive (%)                                10.1%        32.5%            39.4%            21.2%       18.9%         15.3%
- ---------------------------------------------------------------------------------------------------------------------------------
Pro Forma Heating Oil DCF per Unit                                   $      2.32        $    2.39    $   2.39     $    2.33
DPUs Issued as Sr Sub Units at Beg 
of Year                                         -            -                -                -           -             -
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
Pro Forma Credit Analysis
- ---------------------------------------------------------------------------------------------------------------------------------
EBITDA/Interest                               2.22 x       2.70 x           2.25 x           2.74 x      2.72 x        2.75 x
LT Debt/EBITDA                                5.07         4.18             4.15             4.22        4.20          4.20
LT Debt/EBITDA (Pro Forma for Full-Year
Acquisitions)                                4.91         4.04             4.03             4.00        4.00          4.00
# of Units Issued to Meet Debt Covenant          -            -            1,207              508       1,122         1,170

- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
Pro Forma Coverage Ratios
- ---------------------------------------------------------------------------------------------------------------------------------
MQD Coverage
------------
Common Unit                                  0.78 x       1.18 x           1.06 x           1.14 x      1.14 x        1.12 x
Senior Subordinated Unit                     0.66         0.99             0.89             0.97        0.98          0.97
Total Unit                                   0.62         0.94             0.85             0.93        0.94          0.94

Indicated Distribution Coverage   
-------------------------------
Common Unit                                  0.78 x       1.18 x           1.06 x           1.14 x      1.14 x        1.12 x
Senior Subordinated Unit                     0.66         0.99             0.89             0.97        0.98          0.97
Total Unit                                   0.62         0.94             0.85             0.93        0.94          0.94

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

- ----------------------------------------------------------------------------------------------------
CURRENT MODEL ASSUMPTIONS                                                                           
- ---------------------------------------------------------------------------------------------------- 
Scenario Version:        15-yr; $15/$30mm @ 4.75x mid-year; $.01 '99, $.005 '00-'01, flat att.

Petro Acqs/yr                     $15,000        1999          $30,000           2000 on
Star Acqs/yr                      $ 5,000        1999          $10,000           2000 on            

G.P. Interest Subordinate                  
- ---------------------------------------------------------------------------------------------------- 

- ---------------------------------------------------------------------------------------------------- 
EQUITY RESTRUCTURING                                                                                
- ----------------------------------------------------------------------------------------------------  
Petro                           
-----------------------------------------        
Public                    Insiders           
-------------              --------------        

Securities Offered                                    Sr Sub                     Sub & GP           

Security Offered per Share                            0.11758                    0.14318            
Total Shares                                           14,618                     11,834            
Insiders to Receive Sr. Sub                             6,572                     (6,572)           
Shares to Be Converted                                 21,190                      5,262            
Units Offered                                           2,491                        753            
DPUs Offered                                                                         909            

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

- ----------------------------------------------------------------------------------------------------  
SOURCES AND USES OF FUNDS                                                                           
- ----------------------------------------------------------------------------------------------------  
Sources:                                            Uses:                                           

Excess Cash on Hand                 $       0       Repay Debt Principal        $206,250            
New Star Debt                          90,000       Redeem Preferred              31,767            
New MLP Equity                        170,000       Premium on Redemption/                          
New MLP E Equity                            -        Exchange/Defeasance           2,844            
Equity for Consent Fees                 1,961       Consent Fees                   1,961            
Cash Balance                                0       Transaction Fees              19,139            
---------                                  ---------            
$ 261,960                                   $261,960            
=========                                  =========            
- ----------------------------------------------------------------------------------------------------  

- ----------------------------------------------------------------------------------------------------  
FINANCING SUMMARY                                                                                   
- ----------------------------------------------------------------------------------------------------  
Amount           Rate          Unit Price                     
---------       ----------      ------------                    

New Common Raised                    $170,000                          $19.08      (a)              
New Debt Raised                        90,000           7.50%                                       

(a)  Last 20 Days Average Stock Price @ 2/3             
- ----------------------------------------------------------------------------------------------------  

- ----------------------------------------------------------------------------------------------------  
UNITS OUTSTANDING                                                                                   
- ----------------------------------------------------------------------------------------------------   
Current                       Pro Forma                
---------------------------     ------------------------         
Units               %           Units           %             
----------        ---------     ----------     ---------         

Existing Common                     3,858.999           60.5%       3,858.999       23.9%           
New Common                                  0            0.0%       9,013.547       55.9%           
New Common for Acquisitions                 0            0.0%           0.000        0.0%           
Common to Petro Shareholders                0            0.0%           0.000        0.0%           
Sr Sub (Petro S/H's)                        0            0.0%       2,491.500       15.5%           
Existing Sub                        2,396.078           37.5%         431.126        2.7%           
Implied GP                            127.655            2.0%         322.350        2.0%           
----------        ---------     ----------     ---------         
Total Units               6,392.732          100.0%      16,117.523      100.0%           
==========        =========     ==========     =========         
- ----------------------------------------------------------------------------------------------------   

Page 1 of 19

================================================================================
TRANSACTION SUMMARY AND ASSUMPTIONS                 
(in thousands except per share and per unit data)     

OPERATING ASSUMPTIONS
- ------------------------------------------------------------------------------------
Petro        Star         Star Normal 
-----------  -----------   ---------------

Normalized Maintenance CapEx                                 $   3,500    $  2,625             $2,610  
Maintenance CapEx Life                                          15 yrs      15 yrs                  
Growth CapEx Life                                             12.6 yrs      15 yrs                   

Required Cash at Beginning for Initial Distribution                           8,865
Minimum Star Stand Alone Cash Balance                                     $   1,115
Minimum Star Pro Forma Cash Balance                                       $  14,882
Consolidation Savings                                                     $     500
Annual Bank Fees                                             $     943    $       0
Last 20 Days Average Stock Price @ 2/3                       $    1.01    $   19.08      2000+
Annual Transaction/Deal Expenses                                          $     225            $  450
Debt/EBITDA Bank Covenant Ratio                                                 4.0x
Issue Equity to Meet Bank Debt Covenants (Y/N)?                                  yes

DEBT RESTRUCTURING
- ------------------------------------------------------------------------------------------------------------
Projected
12/31/97
Privates:                                                   % Tendered     Principal     Strategy     Price
----------    -----------   ----------   -------
11.96% Sr Notes                                           100.0%         60,000     Exchange     105.2%
14.10% Sr Notes                                           100.0%          3,100     Exchange     105.2%
14.10% Sub Notes                                          100.0%          3,100     Exchange     105.2%
14.33% Pfd Stock                                          100.0%          4,167    Neg. Tender   100.0%
Publics:
10.13% Sub Notes & Sr Notes                               100.0%         50,000    Neg. Tender   100.0%
9.38% Sub Notes & Sr Notes                                100.0%         75,000       Tender     100.0%
12.25% Sub Notes & Sr Notes                               100.0%         81,250       Tender     103.5%
12.88% Pfd Stock                                          100.0%         30,000       Tender      92.0%

NEW SECURITY ASSUMPTIONS
- -----------------------------------------------

New MLP Equity
- --------------
Gross Proceeds                     $170,000
Common Units for Consent Fee          1,961
Common Units to Enron                     -
--------
Total New Equity Value         $171,960
Common Units to Public                9,014  units

New Star Debt                               
-------------                               
Gross Proceeds           90,000             
Gross Spread %                          5.0%                Gross Spread %             1.25%            
Gross Spread $                       $8,500                 Gross Spread $           $1,125             
Offering Price Share 
(current market price)              $19.08                 Coupon                     7.50%

ACQUISITION ASSUMPTIONS
- --------------------------------------------------------------------------------------------------------
Petro                              Multiple       1998        1999        2000        2001        2002      
- -----                             ----------   ---------    --------    --------    --------    --------  
Amount                              4.75 x      $    0    $15,000     $30,000     $30,000     $30,000  
Timing                                           End         Mid         Mid         Mid         Mid    
% EBITDA                                           0.0%      50.0%       50.0%       50.0%       50.0%   
Amount                              4.75 x                $     0                                     
Timing                                                       Beg                                         
% EBITDA in Initial Year                                    100.0%
Units Issued at:  Common                          $22.00
Sr. Sub.                        $18.52

Star Stand-Alone
- ----------------
Weather                                30 Year
Amount                              6.50 x      $9,000    $  5,000    $ 10,000    $ 10,000    $ 10,000
Timing                                           End         Mid         Mid         Mid         Mid    
% EBITA in Initial Year                            0.0%       50.0%       50.0%       50.0%       50.0%

Amount Financed with Equity                     $    0    $  7,572    $  8,417    $  6,585    $  6,300
New Units @:                                         0         344         383         299         286
Units Issued at Price of:                       $22.00    $  22.00    $  22.00    $  22.00    $  22.00

Amount                              6.50 x                $      0
Timing                                                       Beg
% EBITDA in Initial Year                                     100.0%

EXCHANGE ASSUMPTIONS
- ------------------------------------------------------------------------------------------------------------------------
Existing                           Gets New Units of:
-------------------------------------------------------
Shareholders of:                                   Shares          Common       Sr Sub     Jnr Sub      G.P.     DPUs(1)
- -----------------------------------------------------------      ----------   ---------  -----------  --------  -------- 
Public Class A Shareholders                     14,618.087          0.000     1,718.795      0.000      0.000    481.478
Insider Class B Shares                              11.228          0.000         0.000      0.000                 0.000
Insider Class C Shareholders                                                                            0.000
Class A & C Shares to Receive Jr Sub & GP     5,262.443          0.000         0.000    431.126    322.350    211.068
Class A Shares to Receive Sr Sub              6,571.740          0.000       772.705      0.000      0.000    216.454
-----------       ----------   ---------  -----------  --------  -------- 
26,463.498          0.000     2,491.500    431.126     322.350   909.000
E Sr. Sub                                                                         0.000                            0.000
---------                         --------
Total                                                                      2,491.500                          909.000
=========                         ========

(1)  Includes 2.0% G.P. Interest

TRANSACTION COSTS SUMMARY
-------------------------------------------------

New MLP Equity                           $ 8,500                                          Heating Oil DPU Trigger
------------------------
New Star Debt                              1,125                                          DCF/Unit       % Convert
Fairness Opinion                           1,275                                            $2.90           33.3%
Financial Advisory                         1,500
Exchange Fees on Public Petro
Debt/Preferred                            1,375  
Legal Fees                                 4,200
Printing                                   1,500
Accounting Fees                              200                 Consent Fee Calculation
------------------------------------------------- 
Other:
-----
Environmental                                  0                 % of Petro Stock             3.3%  
Rating Agencies                               60                 New Petro Shares             874   
Roadshow                                     200                 Exchange Ratio              8.50x 
-----------
Asset Appraisal                              100                 New Common Units         102.773
Solicitation expenses                        100                 Common Unit Price       $  19.08
-----------
Other Bank Fees                              150                 Implied Value           $  1,961
===========
Other                                        225                                   
-------
$20,510
=======
Transaction Costs Capped at              $19,139

=========================================================================================================================== 
SUMMARY DISTRIBUTIONS

(in thousands except per share and per unit data)    

Projected                 
-------------------------------------------------- 
1998          1999         2000        2001         2002     
---------    -----------   ----------  ----------   ----------- 

UNITHOLDER CLASS (1)                                                                                            

COMMON UNITHOLDERS                                                                                              
MQD                                                                   $   30,994   $   32,967  $   34,841    $   37,477 
Incentive Distributions                                                        -            -           -             - 
-----------   ----------  ----------   ----------- 
Total                                                              $   30,994   $   32,967  $   34,841    $   37,477 

E CAPITAL                                                                                                                  
Existing Sr. Sub Units                                                         -            -           -             - 
Number of DPUs Issued as Sr Sub Units                                          -            -           -             - 
New Sr. Sub Units                                                              -            -           -             - 
-----------   ----------  ----------   ----------- 
Total Sr. Sub Units                                                         -            -           -             - 

Existing Common                                                                -            -           -             - 
New Common                                                                     -            -           -             - 
-----------   ----------  ----------   -----------   
Total Common                                                                -            -           -             - 

Common MQD                                                                     -            -           -             - 
Common Incentive Distributions                                                 -            -           -             - 
Sr. Sub MQD                                                                    -            -           -             - 
Sr. Sub Incentive Distributions                                                -            -           -             - 
-----------   ----------  ----------   -----------    
Total Distributions                                                         -            -           -             -

SENIOR SUBORDINATED UNITHOLDERS(1)                                                                                       
Number of DPUs Issued as Sr Sub Units                                          -            -           -             - 

Base MQD                                                              $        0   $    4,722  $    4,927    $    4,613
Incremental MQD from DPUs Issued as Sr. Sub Units                              -            -           -             - 
Incentive Distributions                                                        -            -           -             -   
Incremental Incentive Distributions from DPUs                                                                          
Issued as Sr. Sub Units                                                       -            -           -             - 
-----------   ----------  ----------   ----------- 
Total                                                              $        0   $    4,722  $    4,927   $     4,613

SUBORDINATED UNITHOLDERS(1)                                                                                               
Number of DPUs Issued as Sr Sub Units                                          -            -           -             -

Base MQD                                                              $        0   $        0  $        0   $         0 
Incremental MQD from DPUs Issued as Sr. Sub Units                              -            -           -             - 
Incentive Distributions                                                        -            -           -             - 
Incremental Incentive Distributions from DPUs                                                                          
Issued as Sr. Sub Units                                                       -            -           -             - 
-----------   ----------  ----------   ----------- 
Total                                                              $        0   $        0  $        0   $         0 

GENERAL PARTNER                                                                                                           
Number of DPUs Issued as Sr Sub Units                                          -            -           -             - 

Base MQD                                                              $        0   $        0  $        0   $         0    
Incremental MQD from DPUs Issued as Sr. Sub Units                              -            -           -             - 
Incentive Distributions                                                        -            -           -             - 
Incremental Incentive Distributions from DPUs                                                                          
Issued as Sr. Sub Units                                                       -            -           -             - 
-----------   ----------  ----------   ----------- 
Total                                                              $        0   $        0  $        0   $         0       

UNITHOLDER CLASS TOTAL                                                                                                    
Common Unitholders                                                    $   30,994   $   32,967  $   34,841   $    37,477
Senior Subordinated Unitholders                                                -        4,722       4,927         4,613
Subordinated Unitholders                                                       -            -           -             - 
General Partner                                                                -            -           -             - 
-----------   ----------  ----------   ----------- 
Total                                                              $   30,994   $   37,689  $   39,768   $    42,089

DISTRIBUTIONS TO DPUs CONVERTED TO SENIOR                                                                                 
Subordinated Units                                                                                                       
MQD                                                                   $        0    $       0   $       0   $         0       
Incentive Distributions                                                        -            -           -             -  
-----------   ----------  ----------   ----------- 
Total                                                                       -            -           -             -         
check                -            -           -             -         

______________________________
(1)  Reflects distributions for respective Unitholder class. All DPUs are issued
as Senior Subordinated Units but are distributed pro rata to all Petro
shareholders. Consequently, the Subordinated Unitholder class includes DPUs
which have been issued as Senior Subordinated Units.

3 of 19

- --------------------------------------------------------------------------------
TRANSACTION SUMMARY AND ASSUMPTIONS

(in thousands except per share and per unit data)

RECAPITALIZATION ASSUMPTIONS
- --------------------------------------------------------------------------------

(D)EFEASE
(T)ENDER
(R)EDEEM      PRINCIPAL       MATURITY PERIOD                      SINKING FUND PAYMENT
LOCKUP    (E)XCHANGE        AS OF       -------------------    COUPON/       -------------------- 
PETRO INSTRUMENTS:                PREMIUM   (N)OTHING       9/30/98            M/D      YR       DIVIDEND      PAYMENT    YEAR START
- -------------------------         ---------------------   -----------     ---------  --------    ------------  ---------  ----------

11.96% Sr Notes                               e            $ 60,000  v       1-Oct         0       11.960%       $   0             0
14.10% Sr Notes                               e               3,100  v      15-Jan      2001       14.100%           -          1997
14.10% Sub Notes                              e               3,100  v      15-Jan      2001       14.100%           -          1997
10.13% Sub Notes & Sr Notes         0.00%     t              50,000  v       1-Apr      2003       10.130%           -            
9.38% Sub Notes & Sr Notes          0.00%     t              75,000  v       1-Feb      2006        9.375%           -
12.25% Sub Notes & Sr Notes         0.00%     t              81,250  v       1-Feb      2005       12.250%           -
8.00% Acq. & Other Notes Pay                  n              14,508  v                     0        8.000%           -             0
8.25% Existing Credit Facility                n                   0  v                  1998        8.250%           - 
0.00% Other Notes                             n                   0  v          NA        NA        0.000%           0            NA
----------
$286,958 
PFRD STOCK:
- ----------
14.33% Pfd Stock                              t               4,167  v       1-Aug      1999       14.330%       4,167         1997
12.88% Pfd Stock                     0.0%     t              30,000  v      15-Feb      2009       12.875%  
0.00%                                         n                   0                                 0.000%
----------
$ 34,167
----------
Total Petro                                      $321,125
----------

STAR INSTRUMENTS:
- -------------------------
8.04% 1st Mortgage Notes            0.07      n              85,000  v          NA        NA     8.040%              -            0
7.25% WC Revolver                   0.00      n               4,785             NA        NA     7.250%              -           NA
7.25% Acquisition Facility          0.01      n               9,000  v          NA        NA     7.250%              -           NA
7.50% New Debt                                n              90,000  v          NA        NA     7.500%              0           NA 
7.17% Pearl Notes                   0.01      n              11,000             NA        NA     7.170%              0           NA
----------
8.21%                  $188,785
---------- 
Total Combined                                   $509,910
==========  

% RED./    RED-EXCHG       DEFEASANCE  RED/EXCHG/DEFEASE     EXCHANGED     
PETRO INSTRUMENTS:              EXCHANGED     PRICE           PRICE        VALUE  PREMIUM     INT RATE    SECURITY TYPE
- -------------------------      ----------   -----------     -----------  ------- ----------  ----------   --------------   

11.96% Sr Notes                 100.0%          105.2%                    $ 60,000   $    0       10.9%    Sr Notes      
14.10% Sr Notes                 100.0%          105.2%                       3,100        -      14.10%    Sr Notes
14.10% Sub Notes                100.0%          105.2%                       3,100        -      14.10%    Sub Notes
10.13% Sub Notes & Sr Notes     100.0%          100.0%         106.2%       50,000        -                Sub Notes & Sr Notes
9.38% Sub Notes & Sr Notes      100.0%          100.0%         108.2%       75,000        -                Sub Notes & Sr Notes
12.25% Sub Notes & Sr Notes     100.0%          103.5%         116.2%       84,094    2,844                Sub Notes & Sr Notes
8.00% Acq. & Other Notes Pay      0.0%          100.0%                           -        -                Acq. & Other Notes Pay 
8.25% Existing Credit Facility    0.0%          100.0%                           -        -                Existing Credit Facility
0.00% Other Notes                 0.0%            0.0%                           -        -       11.0%    Other Notes
---------
2,844                                
Pfrd Stock:
- ----------
14.33% Pfd Stock                100.0%          100.0%                       4,167        -                Pfd Stock             
12.88% Pfd Stock                100.0%           92.0%                      27,600        -                Pfd Stock
0.00%                                                                            -        -                     
--------- 
Total Petro                                                                $    0
--------- 
$2,844
Star Instruments
- -------------------------
8.04% 1st Mortgage Notes        0.0%              0.0%                           -        -                1st Mortgage Notes
7.25% WC Revolver               0.0%              0.0%                           -        -                WC Revolver 
7.25% Acquisition Facility      0.0%              0.0%                           -        -                Acquisition Facility
7.50% New Debt                  0.0%              0.0%                           -        -                New Debt
7.17% Pearl Notes               0.0%              0.0%                           -        -                Pearl Notes
----------
$    0 
----------
$2,844
----------

2,843.75 

STAR STAND ALONE DISTRIBUTION ASSUMPTIONS                                             STAR PRO FORMA DISTRIBUTION ASSUMPTIONS       
- ------------------------------------------------------------------------------    -------------------------------------------------
Distribution                                           Distribution    
------------------                                    -------------------

Minimum Quarterly Distribution                                       $2.20        Minimum Quarterly Distribution           $2.30  
First Target Distribution                                            $2.42        First Target Distribution                $2.42
Second Target Distribution                                           $2.84        Second Target Distribution               $2.84
Third Target Distribution                                            $3.70        Third Target Distribution                $3.70
Thereafter                                                              NM        Thereafter                                  NM
1998    
-----------     
Target Distribution Level                                            $2.20        Annual Indicated Distribution      
Annual Distribution Increase                                         $0.00        Increase                                 $0.00
Target Indicated Distribution
--------------------      Level                                    $2.30 
Standard Distribution Structure ("S") or Target ("T")            t               
--------------------      Standard Distribution Structure ("S) or Target  
- ------------------------------------------------------------------------------    ("T")                                          

- ---------------------------------------------------------------------------------------------------------------------
1999             2000       2001        2002         Thereafter
----             ----       ----        ----          
Annual Indicated Distribution
Increase                                           $0.00            $0.00      $0.00        $0.00        $0.00 
Target Indicated Distribution
Level                                              $2.30            $2.30      $2.30        $2.30 

---------
Standard Distribution Structure ("S) or Target 
("T")                                                  t
----------

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

4 of 19

PRO FORMA OPENING BALANCE SHEET

(in thousands except per share and per unit data)

OPENING BALANCE SHEET                               STAR GAS         PETRO                                     PRO FORMA
------------   ------------        
MERGER         STAR GAS
------------   ------------                  
9/30/98        9/30/98                     ADJUSTMENTS      9/30/98
------------   ------------                  -----------    -----------  

Assets:                                                       
-----------                    
Cash                                          $  1,115      $  13,767                     $       0      $  14,882
-----------                    
Other Current Assets                            16,832         64,045                             -         80,877
------------   ------------                  -----------    -----------     
Total Current Assets                           17,947         77,812                             -         95,759

PP&E and Intangibles, Net                      161,660        107,957                             -        269,617
Investments in Unconsolidated Affiliates             -            113                          (113)             -
Other Assets                                         -         12,796                             -         12,796
------------   ------------                  -----------    -----------       
Total Assets                                  179,607        198,678                          (113)       378,172
============   ============                                 ===========

Liabilities:                                                  
Current Liabilities                             12,450         78,003                             -         90,453
8.25% Existing Credit Facility                   4,770              -                             -          4,770
Long Term Debt                                 105,000        286,885                      (116,250)       275,635   
Total Preferred Stock                                -         34,167                       (34,167)             -
Other Liabilities                                   40         10,686                             -         10,726
------------   ------------                  -----------    ----------- 
Total Liabilities                             122,260        409,741                      (150,417)       381,584

Common Shareholder's/Partner's Equity                57,347       (211,063)                      150,304         (3,412)
------------   ------------                  -----------    -----------
Total Liabilities and Equity                 $179,607      $ 198,678                         ($113)     $ 378,172
============   ============                                 ===========     

check                        -              -                                            -

PRO FORMA CAPITAL STRUCTURE                         STAR GAS         PETRO                                     PRO FORMA 
------------   ------------                                 
% NOT         MERGER         STAR GAS 
------------   ------------                                 
9/30/98        9/30/98        TENDERED     ADJUSTMENTS      9/30/98 
------------   ------------   ------------   -----------    -----------   
Debt:                                                         
8.04% 1st Mortgage Notes                           $ 85,000      $       0                     $       0      $  85,000
7.25% WC Revolver                                     4,770              -                             -          4,770
7.25% Acquisition Facility                            9,000              -                             -          9,000
7.17% Pearl Notes                                    11,000              -                             -         11,000

11.96% Sr Notes                                           -         60,000         100.0%        (60,000)             -
14.10% Sr Notes                                           -          3,100         100.0%         (3,100)             -
14.10% Sub Notes                                          -          3,100         100.0%         (3,100)             -
10.13% Sub Notes & Sr Notes                               -         50,000         100.0%        (50,000)             -
9.38% Sub Notes & Sr Notes                                -         75,000         100.0%        (75,000)             -
12.25% Sub Notes & Sr Notes                               -         81,250         100.0%        (81,250)             -
0.00% Other Notes                                         -              0                             -              -
8.00% Acq. & Other Notes Pay                              -         14,435                             -         14,435
8.25% Existing Credit Facility                            -              0                             -              -

10.90% Exchanged Debt                                     -              -                        60,000         60,000
14.10% Exchanged Debt                                                                              6,200          6,200
7.50% New Debt                                            -              -                        90,000         90,000
------------   ------------                  -----------    -----------  
Total L.T. Debt                               109,770        286,885                      (116,250)       280,405
------------   ------------                                 ----------- 

Preferred Stock:                                              
14.33% Pfd Stock                                          -          4,167                        (4,167)             -
12.88% Pfd Stock                                          -         30,000                       (30,000)             -
------------   ------------                  -----------    ----------- 
Total Preferred                                     -         34,167                       (34,167)             -
------------   ------------                                 ----------- 

Common Equity                                        57,347       (211,063)                      150,304         (3,412)
------------   ------------                                 ----------- 
Total Capital                                $167,117      $ 109,989                                    $ 276,993
============   ============                                 ===========

5 of 19

================================================================================
(in thousands except per share and per unit data)

STAR GAS STAND ALONE INCOME STATEMENT

ACTUAL          NORMALIZED                        PROJECT
----------------------------------------------------
1998              1998            1999          2000         2001         2002
-----------       -----------    -----------    ----------    ----------  -----------

EBITDA                                          $  18,906         $  20,731      $  20,415      $  23,749     $  25,182   $  26,615
Depreciation and Amortization                   11,638            12,079         12,218         12,886        13,411      13,852
----------        ----------      ---------      ---------    ----------  ----------

EBIT                                                7,268             8,652          8,197         10,863        11,771      12,763
Interest Expense                                (7,927)           (7,667)        (8,600)        (8,885)       (9,307)     (9,788)
Interest Income                                      -                 -              -              -             -           -
Other Income                                         -                 -              -              -             -           -
----------        ----------      ---------      ---------    ----------  ----------

Income Before Taxes                                  (659)              985           (403)         1,978         2,464       2,975
Current Income Taxes                               (25)              (25)           (25)           (25)          (25)        (25)
Deferred Income Taxes                                -                 -              -              -             -           -
----------        ----------      ---------      ---------    ----------  ----------
Net Income Available to Common                  $    (684)        $     960      $    (428)      $  1,953     $   2,439   $   2,950
==========        ==========      =========      =========    ==========  ==========

STAR GAS STAND ALONE UNITS OUTSTANDING

Common Units                   
Beginning Balance                                3,859             3,859          3,859          4,196         4,571       4,865
Issuance                                           0                 0            337            375           293         281
Buyback                                            0                 0              0              0             0           0
----------        ----------      ---------      ---------    ----------  ----------
Ending Balance                                   3,859             3,859          4,196          4,571         4,865       5,145
----------        ----------      ---------      ---------    ----------  ---------- 
Average Common Units Outstanding                 3,859             3,859          4,028          4,384         4,718       5,005

Subordinated Units                                
Beginning Balance                                2,396             2,396          2,396          2,396         2,396       2,396
Issuance                                           0                 0              0              0             0           0
Buyback                                            0                 0              0              0             0           0 
----------        ----------      ---------      ---------    ----------  ----------
Ending Balance                                   2,396             2,396          2,396          2,396         2,396       2,396 
----------        ----------      ---------      ---------    ----------  ----------
Average Subordinated Units Outstanding           2,396             2,396          2,396          2,396         2,396       2,396 

GP Implied Units 
Beginning Balance                                  128               128            128            135           142         148
Issuance                                           0                 0              7              8             6           6
Buyback                                            0                 0              0              0             0           0
----------        ----------      ---------      ---------    ----------  ----------
Ending Balance                                     128               128            135            142           148         154
----------        ----------      ---------      ---------    ----------  ----------
Average Implied GP Units Outstanding               128               128            131            138           145         151

Total Units                                 6,383             6,383          6,727          7,110         7,409       7,695
==========        ==========      =========      =========    ==========  ==========
Average Units Outstanding                   6,383             6,383          6,555          6,918         7,259       7,552
==========        ==========      =========      =========    ==========  ==========

6 of 19

================================================================================================================================
(in thousands except per share and per unit data)

Actual                   Projected
----------------------------------------
STAR GAS STAND ALONE BALANCE SHEET                           1998        1999      2000       2001       2002
--------    --------  --------   --------   --------  

ASSETS:                                                                
Cash                                                     $  1,115    $  1,115  $  1,115   $  1,115   $  1,115  
Other Current Assets                                       16,832      17,826    20,021     20,965     21,909       
--------    --------  --------   --------   --------      
Total Current Assets                                      17,947      18,941    21,136     22,080     23,024

PP&E and Intangibles, Net                                 161,660     157,220   157,383    157,068    156,360 
Other Assets                                                    -           -         -          -          -     
--------    --------  --------   --------   --------        
Total Assets                                             179,607     176,161   178,519    179,148    179,384
========    ========  ========   ========   ========        

LIABILITIES:
Current Liabilities - Excluding Working Capital Borrowing    12,450      13,444    15,639     16,583     17,527   
Total Debt                                                  109,770     112,607   117,619    124,250    130,907       
Other Liabilities                                                40          40        40         40         40
--------    --------  --------   --------   --------         
Total Liabilities                                        122,260     126,090   133,298    140,873    148,473

Partner's Equity                                             57,347      50,070    45,221     38,275     30,910
--------    --------  --------   --------   --------          
Total Liabilities and Equity                            $179,607    $176,161  $178,519   $179,148   $179,384
========    ========  ========   ========   ========        
Check                                                      -           -         -          -          0

STAR GAS STAND ALONE CASH FLOW STATEMENT

Net income                                                                ($428)   $1,953     $2,439     $2,950
Depreciation and Amortization                                         12,218    12,886     13,411     13,852
Deferred Taxes                                                             -         -          -          -   
Other Income                                                               -         -          -          -   
Other Assets/Liabilities                                                   -         -          -          -   
Change in Working Capital                                                  0         -          0          -
--------  --------   --------   --------          
Cash from Operations                                                     11,790    14,839     15,850     16,802
--------  --------   --------   --------           
Maintenance CapEx                                                     (2,553)   (2,599)    (2,646)    (2,694) 
Internal Growth CapEx                                                      -         -          -          -
External Growth CapEx                                                 (5,000)  (10,000)   (10,000)   (10,000)  
--------  --------   --------   --------           
Cash from Investments                                                    (7,553)  (12,599)   (12,646)   (12,694)  
--------  --------   --------   --------            

Acquisition Borrowing                                                 (2,572)    1,583      3,415      3,700
Remaining Distributions to Repay Debt                                     (0)        0         (0)        (0)
Amortization of Mortgage Notes                                             -         -          -          -
Borrowing to Repay Existing Debt                                           -         -          -          -
Borrowings for Changes in WC                                              (0)        -         (0)         -
Borrowing to Pay Full MQD                                              5,184     2,980      2,766      2,507
Change in Equity                                                       7,572     8,417      6,585      6,300
Transaction/Deal Expenses                                               (225)     (450)      (450)      (450)
Distributions                                                        (14,421)  (15,220)   (15,970)   (16,614)
--------  --------   --------   --------            
Cash from Financing                                                      (4,462)   (2,690)    (3,654)    (4,558)
--------  --------   --------   --------            

Net Cash Flow                                                              (225)     (450)      (450)      (450)    
Initial Cash Balance                                                      1,115     1,115      1,115      1,115     
--------  --------   --------   --------             
Cash Available for Paydown on WC Revolver and Acq. Facility                 890       665        665        665

Minimum Cash Balance                                                      1,115     1,115      1,115      1,115

Borrowing/(Paydown) on WC Revolver and Acq. Facility                        225       450        450        450
--------  --------   --------   --------             

Net Change in Cash                                                            -         -          -          -
--------  --------   --------   --------              

Ending Cash Balance                                                      $1,115    $1,115     $1,115     $1,115
========  ========   ========   ========              

7 of 19

================================================================================
(in thousands except per share and per unit data)

Actual      Normalized                   Projected
----------------------------------------
1998         1998          1999       2000      2001    2002
--------   ----------     ---------  ---------  ------- ----------

STAR GAS STAND ALONE EBITDA CALCULATION          
(See Tab 3: Cases)
- ------------------------------------------------------------------------------------------------------------------------------------
Year 1        Year 2    Year 3   Year 4   Year 5
EBITDA GROWTH RATE                                                                9.7%         -1.5%     16.3%     6.0%     5.7%
- ------------------------------------------------------------------------------------------------------------------------------------

BASE EBITDA:   Timing
------
End      1998
Mid      1999
Mid      2000
Mid      2001
Mid      2002
Mid      2003
Mid      2004
Mid      2005
--------   --------       --------    --------  -------- -------- 
TOTAL EBITDA                                                     $18,906    $20,731        $20,415     $23,749   $25,182  $26,615
========   ========       ========    ========  ======== ======== 

PRO FROMA FULL-YEAR EBITDA FOR DEBT COVENENT ANALYSIS             18,906     20,731         20,772      24,463    25,896   27,329

STAR GAS STAND ALONE DEPRECIATION CALCULATION

EXISTING DEPRECIATION                                              $11,638    $12,079        $12,079     $12,079   $12,079  $12,079
1998 Normal    2,610     
MAINTENANCE CAPEX:                         1998        2,625       $     0    $     0        $   175     $   175   $   175  $   175
Annual Growth: 1.8%          1999        2,553                                      85         170       170      170
2000        2,599                                                  87       173      173
2001        2,646                                                            88      176
2002        2,694                                                                     90 

INTERNAL GROWTH CAPEX:                     1998            0             -          -              -           -         -        -
Annual Growth: 0.0%          1999            0                                       -           -         -        -
2000            0                                                   -         -        0
2001            0                                                                      -
2002            0                                                                       
2003            0
2004            0
2005            0    

EXTERNAL GROWTH CAPEX:                     1998        9,000             -          -            600         600       600      600
Annual Growth: 0.0%          1999        5,000                                     167         333       333      333
2000       10,000                                                 333       667      667
2001       10,000                                                           333      667
2002       10,000                                                                    333
2003       10,000
2004       10,000 
2005       10,000

--------   --------       --------    --------  -------- -------- 
TOTAL DEPRECIATION                                               $11,638    $12,079        $12,218     $12,886   $13,411  $13,852
========   ========       ========    ========  ======== ======== 

8 of 19

STAR GAS STAND ALONE DEBT SCHEDULE

(in thousands except per share and per unit data)

[CAPTION]

Actual    Normalized        Projected
----------------------
1998        1998       1999         2000
----------  ----------  ----------  ----------

8.04% 1st Mortgage Notes
Beginning Balance                                          $85,000     $85,000     $85,000     $85,000
Borrowing                                                      0           0           0           0
Amortization                                                   0           0           0           0
----------  ----------  ----------  ----------
Ending Balance                                             $85,000     $85,000     $85,000     $85,000

Interest Payment                              8.04%          6,834       6.834       6,834       6,834
Make-Whole Payment                                               0           0           0           0

7.17% Pearl Notes
Beginning Balance                                               $0          $0     $11,000     $11,000
Borrowing                                                 11,000      11,000           0           0
Amortization                                                   0           0           0           0
----------  ----------  ----------  ----------
Ending Balance                                             $11,000     $11,000     $11,000     $11,000

Interest Payment                              7.17%            613         613         789         789
% of year Pearl Notes Outstanding                             77.7%       77.7%          0           0

7.25% WC Revolver
Beginning Balance                                              -           -        $4,770      $4,770  
Borrowing for Change in WC                                   -           -            (0)        -
Borrowing/(Payment)                                        4.770       4,770           0           0  
----------  ----------  ----------  ----------
Ending Balance                                               4,770       4,770       4,770       4,770

Effective Avg WC Balance                                     6,621       3,034       3,062       3,062
Interest Payment                              7.25%            480         220         222         222

7.25% Acquisition Facility
Beginning Balance                                              -           -        $9,000     $11,837  
External Acquisitions                                      9,000       9,000      (2,572)      1,583
External Acquisitions at Beginning of 1999                   -           -           -           -
Internal Acquisitions                                        -           -           -           -
Borrowing to Pay Full MQD                                    -           -         5,184       2,980
Borrowings to Repay Existing Debt                            -           -           -           -
Borrowings/(Payment)                                         -           -           225         450
Remaining Distributions to Repay Debt                        -           -            (0)          0
----------  ----------  ----------  ----------
Ending Balance                                               9,000       9,000      11,837      16,849

Interest Payment                              7.25%              0           0         755       1,040

TOTAL DEBT
Beginning Balance                                          $85,000     $85,000    $109,770    $112,607
Amortization of Mortgage Notes                               -           -           -           -
Borrowing for Pearl Notes                                 11,000      11,000         -           -
Borrowing for Changes in WC                                  -           -            (0)        -
Borrowing to Pay Full MQD                                    -           -         5,184       2,980
Acquisition Borrowing                                      9,000       9,000      (2,572)      1,583
Borrowing to Repay Existing Debt                             -           -           -           -
Remaining Distributions to Repay Debt                        -           -            (0)          0
Borrowing/(Payment) in WC Revolver and Acq. Facility       4,770       4,770         225         450
----------  ----------  ----------  ----------
Ending Balance                                            $109,770    $109,770    $112,607    $117,619
==========  ==========  ==========  ==========

INTEREST EXPENSE
Interest Expense                                            $7,927      $7,667      $8,600      $8,885
Bank Fee                                                       -           -           -           -
----------  ----------  ----------  ----------
Total Interest Payment                                    $7,927      $7,667      $8,600      $8,885
==========  ==========  ==========  ==========

Projected
----------------------
2001        2002
----------  ----------

8.04% 1st Mortgage Notes
Beginning Balance                                          $85,000     $85,000
Borrowing                                                      0           0
Amortization                                                   0           0
----------  ----------
Ending Balance                                              85,000      85,000

Interest Payment                              8.04%          6,834       6,834
Make-Whole Payment                                               0           0

7.17% Pearl Notes
Beginning Balance                                          $11,000     $11,000
Borrowing                                                      0           0
Amortization                                                   0           0
----------  ----------
Ending Balance                                              11,000      11,000

Interest Payment                              7.17%            789         789
% of year Pearl Notes Outstanding                                0           0

7.25% WC Revolver
Beginning Balance                                           $4,770      $4,770
Borrowing for Change in WC                                    (0)        -
Borrowing/(Payment)                                            0           0
----------  ----------
Ending Balance                                               4,770       4,770

Effective Avg WC Balance                                     3,062       3,062
Interest Payment                              7.25%            222         222

7.25% Acquisition Facility
Beginning Balance                                          $16,849     $23,480
External Acquisitions                                      3,415       3,700
External Acquisitions at Beginning of 1999                   -           -
Internal Acquisitions                                        -           -
Borrowing to Pay Full MQD                                  2,766       2,507       
Borrowings to Repay Existing Debt                            -           -
Borrowings/(Payment)                                         450         450
Remaining Distributions to Repay Debt                         (0)         (0)
----------  ----------
Ending Balance                                              23,480      30,137

Interest Payment                              7.25%          1,462       1,944

Total Debt
Beginning Balance                                         $117,619    $124,250
Amortization of Mortgage Notes                               -           -
Borrowing for Pearl Notes                                    -           -
Borrowing for Changes in WC                                   (0)         -
Borrowing to Pay Full MQD                                  2,766       2,507
Acquisition Borrowing                                      3,415       3,700
Borrowing to Repay Existing Debt                             -           -
Remaining Distributions to Repay Debt                         (0)         (0)
Borrowing/(Payment) in WC Revolver and Acq. Facility         450         450
----------  ----------
Ending Balance                                            $124,250    $130,907
==========  ==========

Interest Expense
Interest Expense                                            $9,307      $9,788
Bank Fee                                                       -           -
----------  ----------
Total Interest Payment                                    $9,307      $9,788
==========  ==========

9 of 19

- --------------------------------------------------------------------------------
STAR GAS STAND ALONE SCHEDULE OF ACTUAL DISTRIBUTIONS

(in thousands except per share and per unit data)

Actual     Normalized                        Projected
-----------------------------------------
Assumes Revised Target Distributions Structure                   1998         1998            1999       2000       2001      2002  
----------  ------------     ---------  ---------  ---------  --------

Distributable Cash
- ------------------
Cash from Operations                                           $10,954      $13,039         $11,790    $14,839    $15,850   $16,802 
Maintenance CapEx                                            (2,625)      (2,610)         (2,553)    (2,599)    (2,646)   (2,694)
Other                                                             0            0               0          0          0         0
--------      -------         -------    -------    -------   ------- 
Total MLP Distributable Cash Flow                                8,329       10,429           9,237     12,240     13,204    14,108

Distributable Cash Flow/Unit                                   $  1.30      $  1.63         $  1.41    $  1.77    $  1.82   $  1.87

Average Units for Calculating Annual Distributions               
- --------------------------------------------------
Common Units                                                     3,859        3,859           4,028      4,384      4,718     5,005
Subordinated Units                                               2,396        2,396           2,396      2,396      2,396     2,396 
General Partner Interest Unit Equivalent                           128          128             131        138        145       151 
--------      -------         -------    -------    -------   ------- 
Total Units Outstanding                                          6,383        6,383           6,555      6,918      7,259     7,552 

Distribution Levels 
- -------------------
MQD                                                            $  2.20      $  2.20         $  2.20    $  2.20    $  2.20   $  2.20
First Target                                                   $  2.42      $  2.42         $  2.42    $  2.42    $  2.42   $  2.42
Second Target                                                  $  2.84      $  2.84         $  2.84    $  2.84    $  2.84   $  2.84
Third Target                                                   $  3.70      $  3.70         $  3.70    $  3.70    $  3.70   $  3.70

Indicated Cash Distribution                                    $  2.20      $  2.20         $  2.20    $  2.20    $  2.20   $  2.20

Distribution of MQD                               
- -------------------
Cash Available                                                   8,329       10,429           9,237     12,240     13,204    14,108
Cash Borrowed to Pay Full MQD                                    5,713        3,613           5,184      2,980      2,766     2,507
Allocation to:
Common Units                                                  8,490        8,490           8,861      9,644     10,379    11,011
Subordinated Units                                            5,271        5,271           5,271      5,271      5,271     5,271
General Partner Interest                                        281          281             288        304        319       332

First Target Distribution
- -------------------------
Cash Available                                                       0            0               0          0          0         0

Cash Required for Target Distribution                             0            0               0          0          0         0
Cash Required for Indicated Distribution                          0            0               0          0          0         0
Actual Cash Distributed                                           0            0               0          0          0         0
Allocation to:                                                                                                                    
Common Units                                                      0            0               0          0          0         0
Subordinated Units                                                0            0               0          0          0         0
General Partner Interest                                          0            0               0          0          0         0

Second Target Distribution                                                                                                        
- --------------------------                                                                                                        
Cash Available                                                       0            0               0          0          0         0

Cash Required for Target Distribution                             0            0               0          0          0         0
Cash Required for Indicated Distribution                          0            0               0          0          0         0
Actual Cash Distributed                                           0            0               0          0          0         0
Allocation to:                                                                                                                    
Common Units                                                      0            0               0          0          0         0
Subordinated Units                                                0            0               0          0          0         0
General Partner Interest                                          0            0               0          0          0         0
Incentive Distribution                                            0            0               0          0          0         0

Third Target Distribution                                                                                                         
- -------------------------                                                                                                         
Cash Available                                                       0            0               0          0          0         0

Cash Required for Target Distribution                             0            0               0          0          0         0
Cash Required for Indicated Distribution                          0            0               0          0          0         0
Actual Cash Distributed                                           0            0               0          0          0         0
Allocation to:                                                                                                                    
Common Units                                                      0            0               0          0          0         0
Subordinated Units                                                0            0               0          0          0         0
General Partner Interest                                          0            0               0          0          0         0
Incentive Distribution                                            0            0               0          0          0         0

- --------------------------------------------------------------------------------
STAR GAS STAND ALONE SCHEDULE OF ACTUAL DISTRIBUTIONS (CONT'D)

(in thousands except per share and per unit date)

Actual      Normalized                       Project
-----------------------------------------  
1998          1998            1999      2000       2001       2002 
---------   ------------      ---------  --------  ---------  ---------

Remaining Distribution
- ----------------------
Cash Available                              0            0               0          0         0          0
Allocation to:
Common Units                             0            0               0          0         0          0
Subordinated Units                       0            0               0          0         0          0
General Partner Interest                 0            0               0          0         0          0
Incentive Distribution                   0            0               0          0         0          0
Repay Indebtedness                      (0)           0               0         (0)        0          0 

Total Distributions
- -------------------
Common Units                            8,490        8,490           8,861      9,644    10,379     11,011  
Subordinated Units                      5,271        5,271           5,271      5,271     5,271      5,271  
General Partner Interest                  281          281             288        304       319        332  
Incentive Distribution                      0            0               0          0         0          0  
--------     --------        --------   --------   -------   -------- 
Total Distributions                $14,042      $14,042         $14,421    $15,220   $15,970    $16,614  
========     ========        ========   ========   =======   ======== 

Total Distributions Per Unit                                                                                
- ----------------------------                                                                                
Common Unit                           $  2.20      $  2.20         $  2.20    $  2.20   $  2.20    $  2.20  
Subordinated Unit                        2.20         2.20            2.20       2.20      2.20       2.20  
GP Unit                                  2.20         2.20            2.20       2.20      2.20       2.20  

11 of 19

================================================================================
(in thousands except per share and per units data)

PROJECTED     
ACTUAL      NORMALIZED  -----------------------------------------
1998          1998       1999      2000     2001       2002 
------      ----------  --------   ------   ------  ------------
PETRO EBITDA CALCULATION

- ------------------------------------------------------------------------------------------------------------------------------------
YEAR 1     YEAR 2     YEAR 3    YEAR 4    YEAR 5
EBITDA GROWTH RATE
- ------------------------------------------------------------------------------------------------------------------------------------

Timing 
BASE  EBITDA:       ------    
Acquisitions:         End         1998        $0
Mid         1999    15,000 
Mid         2000    30,000
Mid         2001    30,000    
Mid         2002    30,000
Mid         2003    30,000  
Mid         2004    30,000
Mid         2005    30,000  
-------    -------     -------    -------    -------   ------- 
TOTAL EBITDA                                                   $34,929    $44,749     $43,475    $45,978    $48,375   $50,509
=======    =======     =======    =======    =======   ======= 

Pro Forma Full-Year EBITDA for Debt Covenent Analysis           34,929     44,749      45,011     49,049    $51,446    53,580

PETRO DEPRECIATION CALCULATION

Existing Depreciation                                               $28,946    $24,018     $24,018    $24,018    $24,018   $24,018

Maintenance CapEx:                     1998   $ 3,500                  -          -            233        233        233       233
Annual Growth:    2.0%        1999     3,641                                          121        243        243       243 
2000     3,714                                                     124        248       248 
2001     3,788                                                                126       253
2002     3,864                                                                          129
2003     3,941  
2004     4,020
2005     4,100

Internal Growth CapEx:                 1998   $     0                  -          -           -          -          -         -  
Annual Growth:    0.0%        1999         0                                         -          -          -         -   
2000         0                                                    -          -         -   
2001         0                                                               -         -
2002         0                                                                         -
2003         0
2004         0
2005         0

External Growth CapEx:                 1998   $     0               -          -                 0          0          0         0
Annual Growth:   0.0%         1999    15,000                                          595      1,190      1,190     1,190
2000    30,000                                                   1,190      2,381     2,381
2001    30,000                                                              1,190     2,381  
2002    30,000                                                                        1,190
2003    30,000 
2004    30,000 
2005    30,000  
-------    -------     -------    -------    -------   ------- 
Total Depreciation:                                               28,946    24,018      24,968     26,999     29,630     32,266  
=======    =======     =======    =======    =======   ======= 

12 of 19

________________________________________________________________________________
(in thousands except per share and per unit data)

STAR PRO FORMA INCOME STATEMENT 

ACTUAL     NORMALIZED                       PROJECTED
---------------------------------------------------
1998         1998         1999         2000         2001         2002
------------ ------------ ------------ ------------ ------------ ------------   

Combined EBITDA                              $     53,835 $     65,480 $     63,890 $     69,727 $     73,557 $     77,124
Consolidated Savings                                500          500          500          500          500          500
------------ ------------ ------------ ------------ ------------ ------------   
Pro Forma EBITDA                                   54,335       65,980       64,390       70,227       74,057       77,624
Depreciation and Amortization                    40,584       36,097       37,186       39,885       43,041       46,118
------------ ------------ ------------ ------------ ------------ ------------   
EBIT                                               13,751       29,883       27,204       30,342       31,016       31,506
Interest Expense                                (24,530)     (24,448)     (24,819)     (25,600)     (27,180)     (28,252)
Interest Income                                     -            -            -            -            -            -
Other Income                                        -            -            -            -            -            -

EBT                                               (10,779)       5,435        2,385        4,742        3,837        3,254
------------ ------------ ------------ ------------ ------------ ------------   
Current Income Taxes                               (525)        (525)        (525)        (625)        (675)        (725)
Deferred Income Taxes                               -            -            -            -            -            -
------------ ------------ ------------ ------------ ------------ ------------   

Net Income Available to Common                   ($11,304)$      4,910 $      1,860 $      4,117 $      3,162 $      2,529
============ ============ ============ ============ ============ ============
Pro Forma Full-Year EBITDA for Debt 
Covenant Analysis                                 54,335       65,980       66,283       74,012       77,842       81,409

STAR PRO FORMA UNITS OUTSTANDING

Common Units                                                                                              -            -
Beginning Balance                                             12,873       12,873       14,079       14,588       15,709
Issuance                                                       -            -            -            -            -
Issued to Meet Debt Covenant Ratio                             -          1,207          508        1,122        1,170
Issued to E                                                    -            -            -            -            -
Buyback                                                        -            -            -            -            -     
------------ ------------ ------------ ------------ ------------ ------------   
Ending Balance                                   12,873       12,873       14,079       14,588       15,709       16,879   
------------ ------------ ------------ ------------ ------------ ------------   
Average Common Units Outstanding                 12,873       12,873       13,476       14,333       15,148       16,294

Deferred Participation Units                                       -
Beginning Balance                                   -            -            909          909          909          909
DPUs Issued at Beginning of Year                  -            -            -            -            -            -
------------ ------------ ------------ ------------ ------------ ------------   
Ending Balance                                      -            -            909          909          909          909

SR Subordinated Units
Beginning Balance - Sr Sub Units                               2,491        2,491        2,491        2,491        2,491 
DPUs Issued                                                    -            -            -            -            - 
Sr Sub Issuance                                                -            -            -            -            - 
Sr. Sub to E                                                   -            -            -            -            - 
Sr Sub Converted to G.P. Interest                              -            -            -            -            -  
------------ ------------ ------------ ------------ ------------ ------------   
Ending Balance                                    2,491        2,491        2,491        2,491        2,491        2,491 
------------ ------------ ------------ ------------ ------------ ------------   
Average Sr Subordinated Units Outstanding         2,491        2,491        2,491        2,491        2,491        2,491

Subordinated Units
Beginning Balance                                                431          431          431          431          431 
Issuance                                                       -            -            -            -            -  
Buyback                                                        -            -            -            -            -   
------------ ------------ ------------ ------------ ------------ ------------   
Ending Balance                                      431          431          431          431          431          431 
------------ ------------ ------------ ------------ ------------ ------------   
Average Subordinated Units Outstanding              431          431          431          431          431          431

GP Implied Units
Beginning Balance                                                322          322          322          322          322 
Issued in conjunction with DPUs                                -            -            -            -            -   
Issued to Meet Debt Covenant Ratio                             -            -            -            -            -   
Issued in conjunction with E Equity                            -            -            -            -            -   
Buyback                                                        -            -            -            -            -   
------------ ------------ ------------ ------------ ------------ ------------   
322          322          322          322          322          322
------------ ------------ ------------ ------------ ------------ ------------   

Average Implied GP Units Outstanding                322          322          322          322          322          322

Total Units Outstanding                            16,118       16,118       17,324       17,833       18,954       20,124
------------ ------------ ------------ ------------ ------------ ------------   
Average Total Units Outstanding                    16,118       16,118       16,721       17,578       18,393       19,539
============ ============ ============ ============ ============ ============

Pro Forma Heating Oil Units used for DPU Issue 
Calculation                                                                 10,166       10,660       11,134       11,987

13 of 19

================================================================================
(in thousands except per share and per unit data)

Actual                         Projected
-------------------------------------------------
STAR PRO FORMA BALANCE SHEET                                      1998         1999         2000         2001         2002
----------   ----------   ----------   ----------   ---------- 

ASSETS:
Cash                                                       $   14,882   $   14,882   $   14,882   $   14,882   $   14,882
Other Current Assets                                           80,877       78,697       86,699       91,950       96,840
----------   ----------   ----------   ----------   ---------- 
Total Current Assets                                          95,759       93,579      101,581      106,832      111,722

PP&E and Intangibles, Net                                     269,617      258,625      265,053      268,446      268,886
Other Assets                                                   12,796       12,796       12,796       12,796       12,796
----------   ----------   ----------   ----------   ----------  
Total Assets                                                 378,172      365,000      379,430      388,074      393,404
==========   ==========   ==========   ==========   ========== 

LIABILITIES:                                                   
Current Liabilities                                            90,453       88,273       96,275      101,526      106,416
8.25% Existing Credit Facility                                  4,770        4,770        4,770        4,770        4,770 
Total LT Debt                                                 275,635      267,232      296,048      311,368      325,636
Other Liabilities                                              10,726       10,726       10,726       10,726       10,726
----------   ----------   ----------   ----------   ----------  
Total Liabilities                                            381,584      371,001      407,819      428,390      447,548

Preferred Stock                                                         -            -            -            -            -
Common Shareholder's Equity                                        (3,412)      (6,001)     (28,389)     (40,316)     (54,144) 
----------   ----------   ----------   ----------   ----------   
Total Liabilities and Equity                              $  378,172   $  365,000   $  379,430   $  388,074   $  393,404
==========   ==========   ==========   ==========   ========== 
Check                             -            -            -           (0)          (0)

STAR PRO FORMA CASH FLOW STATEMENT                                          
Net Income                                                                  $    1,860   $    4,117   $    3,162   $    2,529 
Depreciation and Amortization                                               37,186       39,885       43,041       46,118
Deferred Taxes                                                                   -            -            -            - 
Other Assets/Liab                                                                -            -            -            - 
Change in Non-Cash Working Capital                                               -            -            -            -  
----------   ----------   ----------   ----------    
Cash from Operations                                                            39,046       44,002       46,202       48,647

Maintenance CapEx                                                           (6,194)      (6,313)      (6,434)      (6,558)
Internal Growth CapEx                                                            -            -            -            -   
External Growth CapEx                                                      (20,000)     (40,000)     (40,000)     (40,000) 
----------   ----------   ----------   ----------     
Cash from Investments                                                          (26,194)     (46,313)     (46,434)     (46,558)

Acquisition Borrowing                                                       20,000       40,000       40,000       40,000
Remaining Distributions to Repay Debt                                       (1,857)           -            -            -
Amortization of Existing Debt                                               (8,154)      (8,141)         (60)         (60)
Borrowing to Repay Existing Debt                                             6,054        8,141           60           60
Borrowing for Changes in WC                                                      -            -            -            -   
Change in Common Equity & GP Interest                                       26,546       11,184       24,680       25,732
Repayment of Preferred Stock                                                     -            -            -            -   
Distributions                                                              (30,994)     (37,689)     (39,768)     (42,089)
----------   ----------   ----------   ----------       
Cash from Financing                                                             11,594       13,495       24,912       23,643

Net Cash Flow                                                                   24,446       11,184       24,680       25,732
Initial Cash Balance                                                            14,882       14,882       14,882       14,882
----------   ----------   ----------   ----------      
Cash Available for Paydown on WC Revolver and Acq. Facility                     39,328       26,066       39,562       40,614

Minimum Cash Balance                                                            14,882       14,882       14,882       14,882

Borrowing/(Paydown) on WC Revolver and Acq. Facility                           (24,446)     (11,184)     (24,680)     (25,732)
----------   ----------   ----------   ----------      
Ending Cash Balance                                                             14,882       14,882       14,882       14,882

Net Change in Cash                                                          $        0   $        0   $        0   $        0
==========   ==========   ==========   ==========      

14 of 19

- --------------------------------------------------------------------------------
(in thousands except per share and per unit data)

Actual     Normalized                     Projected
----------------------------------------------
STAR PRO FORMA DEBT SCHEDULE                  1998        1998        1999        2000        2001        2002
----------  ----------  ----------  ----------  ----------  ----------

8.04% 1st Mortgage Notes
Beginning Balance                          $85,000     $85,000      85,000     $85,000     $85,000     $85,000
Borrowing                                    -           -           -           -           -           -
Amortization                                 -           -           -           -           -           -
----------  ----------  ----------  ----------  ----------  ----------
Ending balance                              85,000      85,000      85,000      85,000      85,000      85,000

Interest Payment           8.04%             6,834       6,834       6,834       6,834       6,834       6,834

7.17% Pearl Notes
Beginning Balance                           11,000      11,000      11,000      11,000      11,000      11,000
Borrowing                                    -           -           -           -           -           -
Amortization                                 -           -           -           -           -           -
----------  ----------  ----------  ----------  ----------  ----------
Ending balance                              11,000      11,000      11,000      11,000      11,000      11,000

Interest Payment           7.17%               613         613         789         789         789         789
% of year Pearl Notes Outstanding             77.7%       77.7%

10.13% Sub Notes & Sr Notes
Beginning Balance                           50,000      50,000         -           -           -           -
Borrowing                                    -           -           -           -           -           -
Amortization                             (50,000)    (50,000)        -           -           -           -
----------  ----------  ----------  ----------  ----------  ----------
Ending balance                                 -           -           -           -           -           -

Interest Payment          10.13%               -           -           -           -           -           -

9.38% Sub Notes & Sr Notes
Beginning Balance                           75,000      75,000         -           -           -           -
Borrowing                                    -           -           -           -           -           -
Amortization                             (75,000)    (75,000)        -           -           -           -
----------  ----------  ----------  ----------  ----------  ----------
Ending balance                                 -           -           -           -           -           -

Interest Payment           9.38%               -           -           -           -           -           -

12.25% Sub Notes & Sr Notes
Beginning Balance                           81,250      81,250         -           -           -           -
Borrowing                                    -           -           -           -           -           -
Amortization                             (81,250)    (81,250)        -           -           -           -
----------  ----------  ----------  ----------  ----------  ----------
Ending balance                                 -           -           -           -           -           -

Interest Payment          12.25%               -           -           -           -           -           -

7.50% New Debt
Beginning Balance                              -           -        90,000      96,054     104,195     104,255
Borrowing                                 90,000      90,000       6,054       8,141          60          60
Amortization                                 -           -           -           -           -           -
----------  ----------  ----------  ----------  ----------  ----------
Ending balance                              90,000      90,000      96,054     104,195     104,255     104,315

Interest Payment           7.50%             6,750       6,750       6,977       7,509       7,817       7,821

Exchange of 11.96% Senior Notes
Beginning Balance                              -           -        60,000      60,000      60,000      60,000
Borrowing                                 60,000      60,000         -           -           -           -
Amortization                                 -           -           -           -           -           -
----------  ----------  ----------  ----------  ----------  ----------
Ending balance                              60,000      60,000      60,000      60,000      60,000      60,000

Interest Payment          10.90%             6,540       6,540       6,540       6,540       6,540       6,540

8.00% Acq. & Other Notes Pay
Beginning Balance                           16,507      16,507      14,435       8,381         240         180
Borrowing                                    -           -           -           -           -           -
Amortization                              (2,072)     (2,072)     (6,054)     (8,141)        (60)        (60)
----------  ----------  ----------  ----------  ----------  ----------
Ending balance                              14,435      14,435       8,381         240         180         120

Interest Payment           8.00%             1,238       1,238         913         345          17          12

15 of 19

====================================================================================================================================
(in thousands except per share and per unit data)

STAR PRO FORMA DEBT SCHEDULE (CONT'D)

ACTUAL    NORMALIZED                    PROJECTED                   
----------------------------------------------
1998        1998        1999        2000        2001        2002   
----------  ----------  ----------  ----------  ----------  ----------

Exchange of 14.10% Senior Notes                                                                                                    
Beginning Balance                                                  -           -       6,200       4,100       4,100       4,100 
Borrowing                                                    6,200       6,200           -           -           -           - 
Amortization                                                     -           -      (2,100)          -           -           - 
----------  ----------  ----------  ----------  ----------  ----------
Ending Balance                                                 6,200       6,200       4,100       4,100       4,100       4,100 
Interest Payment                           14.10%                874         874         578         578         578         578 

7.25% WC Revolver                                                                                                                   
Beginning Balance                                                  -           -       4,770       4,770       4,770       4,770 
Borrowing for Change in WC                                       -           -           -           -           -           - 
Borrowing to Pay Full MQD                                        -           -           -           -           -           - 
Borrowing/(Payment)                                          4,770       4,770           -           -           -           - 
----------  ----------  ----------  ----------  ----------  ----------
Ending Balance                                                 4,770       4,770       4,770       4,770       4,770       4,770 

Effective Avg WC Balance                                      10,179       9,044      11,338      11,338      11,338      11,338 
Interest Payment                            7.25%                738         656         822         822         822         822 

7.25% Acquisition Facility                                                                                                         
Beginning Balance                                                  -           -       9,000       2,697      31,513      46,833 
External Acquisitions                                        9,000       9,000      20,000      40,000      40,000      40,000 
External Acquisitions at Beginning of 1999                       -           -           -           -           -           - 
Internal Growth CapEx                                            -           -           -           -           -           - 
Payment                                                          -           -     (24,446)    (11,184)    (24,680)    (25,732)
Remaining Distributions to Repay Debt                            -           -      (1,857)          -           -           - 
----------  ----------  ----------  ----------  ----------  ----------
Ending Balance                                                 9,000       9,000       2,697      31,513      46,833      61,101 

Interest Payment                            7.25%          $       0   $       0    $    424    $  1,240    $  2,840    $  3,913 

TOTAL PRO FROMA DEBT                                                                                                               
Beginning Balance                                          $ 318,757   $ 318,757    $280,405    $272,002    $300,818    $316,138 
Amortization of Existing Debt                             (208,322)   (208,322)     (8,154)     (8,141)        (60)        (60)
Exchange of Notes                                           66,200      66,200           -           -           -           - 
Borrowing for Changes in WC                                      -           -           -           -           -           - 
Acquisition Borrowing                                        9,000       9,000      20,000      40,000      40,000      40,000 
Borrowing to Pay Full MQD                                        -           -           -           -           -           - 
Borrowing to Repay Existing Debt                            90,000      90,000       6,054       8,141          60          60 
Remaining Distributions to Repay Debt                            -           -      (1,857)          -           -           - 
Borrowing/(Payment) on WC Revolver and Acq. Facility         4,770       4,770     (24,446)    (11,184)    (24,680)    (25,732)
----------  ----------  ----------  ----------  ----------  ----------
Ending Balance                                               280,405     280,405     272,002     300,818     316,138     330,406 

PREFERRED STOCK                                                                                                                    
Beginning Balance                                             34,167      34,167           -           -           -           - 
Repayment                                                  (34,167)    (34,167)          -           -           -           - 
----------  ----------  ----------  ----------  ----------  ----------
Ending Balance                                                     -           -           -           -           -           - 

Dividend Payment                           14.33%                  -           -           -           -           -           - 

Interest Expense/Dividends                                    23,587      23,505      23,876      24,657      26,237      27,309 
Chase Fees                                                       943         943         943         943         943         943 
----------  ----------  ----------  ----------  ----------  ----------
Total Interest Payment/Dividends                         $  24,530   $  24,448    $ 24,819    $ 25,600    $ 27,180    $ 28,252 
==========  ==========  ==========  ==========  ==========  ==========

16 of 19

================================================================================================================================
(In Thousands Except Per Share And Per Unit Data)

STAR PRO FORMA DISTRIBUTION SCHEDULE OF ACTUAL DISTRIBUTIONS

Actual    Normalized                  Projected
----------------------------------------
1998        1998         1999      2000       2001       2002
--------   ----------    --------  --------   --------   --------  

Distributable Cash
- ------------------
Cash from Operations (excl chg in WC)                        29,280       41,007     $39,046   $44,002    $46,202    $48,647
Maintenance CapEx                                         (6,125)      (6,125)     (6,194)   (6,313)    (6,434)    (6,558)
Other                                                          -            -           -         -          -          -
--------   ----------    --------  --------   --------   --------   
Total MLP Distributable Cash Flow                            23,155       34,882      32,852    37,689     39,768     42,089

Distributable Cash Flow / Unit                             $   1.44    $    2.16    $   1.96  $   2.14    $  2.16   $   2.15  
Distributable Cash Flow / Unit Pro Forma for DPU
Conversion         

Average Units for Calculating Annual Distributions
- --------------------------------------------------
Common Units                                                 12,873       12,873      13,476    14,333     15,148     16,294
SR Subordinated Units                                         2,491        2,491       2,491     2,491      2,491      2,491
Subordinated Units                                              431          431         431       431        431        431
General Partner Interest Unit Equivalent                        322          322         322       322        322        322
--------   ----------    --------  --------   --------   --------   
Total Units Outstanding                                      16,118       16,118      16,721    17,578     18,393     19,539

Distribution Levels                                        $   2.30   $     2.30    $   2.30  $   2.30   $   2.30   $   2.30 
- -------------------                                                                                                    
MQD                                                        $   2.30   $     2.30    $   2.30  $   2.30   $   2.30   $   2.30  
First Target                                               $   2.42   $     2.42    $   2.42  $   2.42   $   2.42   $   2.42
Second Target                                              $   2.84   $     2.84    $   2.84  $   2.84   $   2.84   $   2.84
Third Target                                               $   3.70   $     3.70    $   3.70  $   3.70   $   3.70   $   3.70

Indicated Cash Distribution                                $   2.30   $     2.30    $   2.30  $   2.30   $   2.30   $   2.30  

Distribution of MQD    
- -------------------
Cash Available                                               23,155       34,882      32,852    37,689     39,768     42,089
Allocation to:
Common Units                                              23,155       29,607      30,994    32,967     34,841     37,477
SR Subordinated Units                                          0        5,276           0     4,722      4,927      4,613
Subordinated Units                                             0            0           0         0          0          0
General Partner Interest                                       0            0           0         0          0          0

First Target Distribution
- -------------------------
Cash Available                                                    0            0       1,857         0          0          0
Cash Required for Target Distribution                          0            0       2,008         0          0          0
Cash Required for Indicated Distribution                       0            0           0         0          0          0
Actual Cash Distributed                                        0            0           0         0          0          0
Allocation to:    
Common Units                                                   0            0           0         0          0          0 
SR Subordinated Units                                          0            0           0         0          0          0 
Subordinated Units                                             0            0           0         0          0          0 
General Partner Interest                                       0            0           0         0          0          0 

Total Distributors to:
Common Units                                            0            0           0         0          0          0 
Sr. Subordinated Units                                  0            0           0         0          0          0 
Subordinated Units                                      0            0           0         0          0          0 
General Partner Interest                                0            0           0         0          0          0 

17 of 19

================================================================================================================================
(in thousands except per share and per unit data)

STAR PRO FORMA SCHEDULE OF ACTUAL             
DISTRIBUTIONS (CONT'D)

Actual    Normalized                  Projected
----------------------------------------
1998        1998         1999      2000       2001       2002
--------   ----------    --------  --------   --------   --------  

Second Target Distribution
- --------------------------
Cash Available                                                    0            0           0         0          0          0 
Cash Required for Target Distribution                          0            0           0         0          0          0  
Cash Required for Indicated Distribution                       0            0           0         0          0          0  
Actual Cash Distributed                                        0            0           0         0          0          0  

Allocation to:                                                                                                                 
Common Units                                                   0            0           0         0          0          0 
Sr. Subordinated Units                                         0            0           0         0          0          0   
Subordinated Units                                             0            0           0         0          0          0   
General Partner Interest                                       0            0           0         0          0          0   
Incentive Right                                                0            0           0         0          0          0   
Incentive Right to GP Interest                            0            0           0         0          0          0   
Incentive Right to Sub Units                              0            0           0         0          0          0   
Incentive Right to Sr. Sub Units                          0            0           0         0          0          0    

Total Distributions to:
Common Units                                              0            0           0         0          0          0    
Sr. Subordinated Units                                    0            0           0         0          0          0    
Subordinated Units                                        0            0           0         0          0          0    
General Partner Interest                                  0            0           0         0          0          0    

Third Target Distribution
- -------------------------
Cash Available:

Cash Required for Target Distribution                          0            0           0         0          0          0
Cash Required for Indicated Distribution                       0            0           0         0          0          0
Actual Cash Distributed                                        0            0           0         0          0          0

Allocation to:
Common Units
Sr. Subordinated Units                                         0            0           0         0          0          0    
Subordinated Units                                             0            0           0         0          0          0    
General Partner Interest                                       0            0           0         0          0          0    
Incentive Right                                                0            0           0         0          0          0     
Incentive Right to GP Interest                            0            0           0         0          0          0   
Incentive Right to Sub Units                              0            0           0         0          0          0   
Incentive Right to Sr. Sub Units                          0            0           0         0          0          0     

Total Distributions to:
Common Units                                                   0            0           0         0          0          0     
Sr. Subordinated Units                                         0            0           0         0          0          0   
Subordinated Units                                             0            0           0         0          0          0   
General Partner Interest                                       0            0           0         0          0          0       

Remaining Distribution
- ---------------------- 
Cash Available                                                    0            0           0         0          0          0      

Cash Required for Indicated Distribution                       0            0           0         0          0          0      
Actual Cash Distributed                                        0            0           0         0          0          0      

Allocation to:
Common Units                                                   0            0           0         0          0          0     
Sr. Subordinated Units                                         0            0           0         0          0          0   
Subordinated Units                                             0            0           0         0          0          0   
General Partner Interest                                       0            0           0         0          0          0
Incentive Right         
Incentive Right to GP Interest                            0            0           0         0          0          0   
Incentive Right to Sub Units                              0            0           0         0          0          0   
Incentive Right to Sr. Sub Units                          0            0           0         0          0          0        
Repay Indebtedness                                             0            0       1,857         0          0          0

Total Distributions to:
Common Units                                              0            0           0         0          0          0     
Sr. Subordinated Units                                    0            0           0         0          0          0   
Subordinated Units                                        0            0           0         0          0          0   
General Partner Interest                                  0            0           0         0          0          0 

18 of 19

================================================================================
STAR GAS PRO FORMA SCHEDULE OF ACTUAL DISTRIBUTION (CONT'D)

(in thousands except per share and per unit data)

ACTUAL           NORMALIZED                             PROJECTED
----------------------------------------------------------
1998               1998           1999            2000           2001           2002
----------       ------------   -------------    -----------    -----------    -----------

Total Distributions
- -------------------
Common Units                               $ 23,155           $ 29,607     $ 30,994         $ 32,967       $  34,841      $  37,477
Sr. Subordinated Units                            0              5,276            0            4,722           4,927          4,613
Subordinated Units                                0                  0            0                0               0              0
General Partner Interest                          0                  0            0                0               0              0
----------         ----------   ----------       ----------      ----------     ---------- 
Total Distributions                   $ 23,155           $ 34,882     $ 30,994         $ 37,689       $  39,768      $  42,089
==========         ==========   ==========       ==========      ==========     ==========

14,042             14,042       14,421           15,220          15,970         16,614

Total Distributions Per Unit
- ----------------------------
Common Units                               $   1.80           $   2.30     $   2.30         $   2.30       $    2.30      $    2.30
Sr. Subordinated Units                         0.00               2.12         0.00             1.90            1.98           1.85
Subordinated  & GP Units                       0.00               0.00         0.00             0.00            0.00           0.00

19 of 19