EXTENSION OF MANAGEMENT AGREEMENT This Extension of Management Agreement dated May 18, 1997 is between Hallwood Petroleum, Inc. ("HPI") and Hallwood Consolidated Resources Corporation ("HCRC"). Whereas, HPI and HCRC are parties to a Management...

                                         EXTENSION OF MANAGEMENT AGREEMENT

     This  Extension  of  Management  Agreement  dated May 18,  1997 is  between
Hallwood Petroleum, Inc. ("HPI") and Hallwood Consolidated Resources Corporation
("HCRC").

          Whereas,  HPI and HCRC are parties to a Management Agreement dated May
     18, 1992, and

         Whereas,  the Management Agreement provided that it may be extended for
successive one year terms by written agreement of the parties, and

          Whereas,  the parties desire to extend the Management  Agreement until
     May 18, 1998,

         Now,  therefore,  in consideration of the mutual  agreements  contained
herein, the parties agree that the term of the Management  Agreement is extended
to May 18, 1998.


                         HALLWOOD PETROLEUM, INC.



                        By______________________________
                                Xxxxxxx X. Xxxxxx
                                 Vice President

                         HALLWOOD CONSOLIDATED RESOURCES CORPORATION



                        By_______________________________
                               Xxxxxxx X. Xxxxxxxx
                                President