RECITALS

                      CORRECTION TO THE FIRST AMENDMENT TO
          THE THIRD AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT
                        OF HALLWOOD ENERGY PARTNERS, L.P.


     This  Correction  (this  "Correction")  to the First Amendment to the Third
Amended and Restated Limited Partnership  Agreement of Hallwood Energy Partners,
L.P.  (the  "Partnership"),  is  executed  by HEPGP  LTD.,  a  Colorado  limited
partnership, as General Partner of the Partnership (the "General Partner").


                                    RECITALS

     WHEREAS,  the First  Amendment to the Third  Amended and  Restated  Limited
Partnership Agreement (as heretofore corrected,  the "Partnership Agreement") of
the Partnership contained a typographical error;

     WHEREAS,  the General  Partner  deems it to be in the best  interest of the
Partnership to correct the First Amendment to the Partnership Agreement; and

     NOW, THEREFORE, in consideration of the foregoing the Partnership Agreement
is corrected as follows:

          I. Correction to the Partnership Agreement.

               Article I is  hereby  corrected  by  replacing  the term  "Excess
               Capital Account" with the term "Unpaid  Preference Amount" in the
               last sentence of the definition of Excess Capital  Account,  with
               the result that the definition of Excess Capital Account reads in
               its entirety as follows:

               "Excess Capital Account:  The excess of a unit=s positive Capital
               Account balance over the Unpaid Preference Amount attributable to
               such unit. The Unpaid  Preference Amount of each Class A Unit and
               Class B Subordinated Unit shall be zero."

          II.  Ratification. Except as specified hereinabove, all other terms of
               the Partnership  Agreement shall remain  unchanged and are hereby
               ratified and  confirmed.  All  references to "this  Agreement" or
               "the Agreement" appearing in the Partnership  Agreement,  and all
               references to the  Partnership  Agreement  appearing in any other
               document  or   instrument   shall  be  deemed  to  refer  to  the
               Partnership Agreement as corrected by this Correction.

     IN WITNESS  WHEREOF,  this Correction has been duly executed by the General
Partner on this the 3rd day of March,  1998, but effective as of the date of the
First Amendment to the Partnership Agreement.


                       By:    HEPGP LTD., a Colorado limited partnership,
                               its General Partner

                       By:    HALLWOOD GP, INC., a Delaware
                              corporation, its General Partner


                       By:    /s/ Xxxxxxxx X. Xxxxxx
                       Its:   Vice President