AMENDMENT NO. 1
                                      TO
                        REGISTRATION RIGHTS AGREEMENT
                                     AND
                               PROMISSORY NOTE

THIS AMENDMENT NO 1. TO REGISTRATION RIGHTS AGREEMENT AND PROMISSORY NOTE (this
"Amendment") is made and entered into as of December 4, 1998 by and between
COLORADO WYOMING RESERVE COMPANY a Wyoming corporation, having its principal
place of business in Grand Junction, Colorado (the "Company"), and JAMES E.
MOORE REVOCABLE TRUST U/D/T DATED JULY 28, 1994, a trust with the trustee and
beneficiary residing in Playa del Rey, California (the "Investor").

RECITALS:

A.   Contemporaneously with the execution and delivery hereof, the Investor is
extending repayment of its loan to the Company in the principal amount of
$120,000, as evidenced by that certain promissory note in favor of Investor
dated August 25, 1998 in the original principal sum of One Hundred Twenty
Thousand Dollars ($120,000.00) (the "Note"), until January 15, 1999 (the
"Extension") and purchasing from the Company, and the Company is selling to the
Investor, the December Warrants (as defined below).

B.   In connection with the Extension, the Investor and the Company desire to
amend that certain Registration Rights Agreement entered into between the
Company and the Investor as of August 25, 1998 (the "Registration Rights
Agreement") to extend the registration rights and obligations with respect to
the Common Stock (as defined in Section 1 of the Registration Rights Agreement)
underlying the December Warrants.

NOW, THEREFORE, it is agreed:

1.   The Registration Rights Agreement shall be amended as follows:

     a.    The following provisions shall be added to Section 1.1 of the
           Registration Rights Agreement:

           "December Warrant Agreement" shall mean that certain Warrant
     Agreement dated December 4, 1998 by and between the Company and the
     Investor and governing the December Warrants.

           "December Warrants" shall mean the Warrants issued by the Company
     pursuant to the December Warrant Agreement.

     b.    The following provisions of Section 1.1 of the Registration Rights
           Agreement shall amended and shall replace the corresponding
           provisions of Section 1.1 of the Registration Rights Agreement:

           "Registrable Securities" shall mean (i) shares of Common Stock now
     owned or hereafter acquired by the Investor from the Company, (ii) any
     shares of Common Stock issued or then issuable upon complete or partial
     exercise of the Warrants or the December

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     Warrants, and (iii) any shares of Common Stock issued as a dividend or
     other distribution with respect to or in exchange for or in replacement of
     the shares referenced in (i) and (ii) above, provided, however, that
     Registrable Securities shall not include any shares of Common Stock which
     have previously been registered or which have been sold to the public.

           "Warrant Agreement" shall mean that certain Warrant Agreement dated
     August 25, 1998 by and between the Company and the Investor and governing
     the Warrants.

           "Warrants" shall mean the Warrants issued by the Company pursuant to
     the Warrant Agreement.

     3.    The first sentence of Section 2.1 (a) of the Registration Rights
           Agreement shall be amended to read:

           If the Company shall receive from the Holders of at least 50% of the
     Registrable Securities at any time (the "Demand Date") not earlier than
     December 31, 1998, a written request that the Company effect any
     registration with respect to the resale of all or a part of the
     Registrable Securities then, if the Commission has not prior to the Demand
     Date declared effective a shelf registration statement pursuant to Rule
     415 with respect to all of the Registrable Securities (a "Shelf
     Registration Statement") which is effective as of the Demand Date, the
     Company will, as soon as practicable, use its best efforts to effect such
     registration (including, without limitation, filing post-effective
     amendments, appropriate qualifications under applicable blue sky or other
     state securities laws, and appropriate compliance with the Securities Act)
     and as would permit or facilitate the resale and distribution of all or
     such portion of such Registrable Securities as are specified in such
     request.

     4.    Article III of the Registration Rights Agreement shall be amended 
           and restated to read:

                                     III
                             TRANSFER OF SHARES

           If, at any time, the Holder sells or otherwise transfers the
     Warrants or the December Warrants, or if, after the expiration of the
     period provided in Section 2.11 hereof, the Holder sells or otherwise
     transfers shares of Common Stock, then, in connection therewith, the
     Holder shall also be deemed to automatically transfer or assign the rights
     to cause the Company to register the Registrable Securities so transferred
     under Section 2 hereof, provided that the Company is given written notice
     prior to or at the time of such transfer or assignment, stating the name
     and address of the transferee or assignee. The Company shall not be
     obligated to register securities of any such transferee or assignee unless
     such transferee or assignee performs the obligations of a Holder under
     this Agreement.

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2.   The second paragraph of the Note shall be amended to read as follows:

     The unpaid principal and accrued interest shall be payable in full on the
     earlier of (i) the receipt by the Borrower of any proceeds from public or
     private sale of any its capital stock or other securities or (ii) January
     15, 1999 (the "Due Date").

3.   The Company acknowledges that Investor has transferred 120,000 of the
     150,000 Warrants issued to Investor under the Warrant Agreement to certain
     transferees ("the Transferees") and that Investor has also transferred to
     the Transferees the registration rights applicable to such transferred
     Warrants. The Company and Investor agree that the registration rights
     conferred by the Registration Rights Agreement have been transferred in
     compliance with Section 3 of the Registration Rights Agreement and the
     Company waives any defect with respect to such transfer.

4.   The Company represents and warrants to Investor that (a) the execution,
     delivery and performance of this Amendment are within its powers, have been
     duly authorized and are not in contravention with any law, with the
     Company's charter or bylaws, or any undertaking to which it is a party or
     by which it is bound; (b) this Amendment is the legal, valid and binding
     obligation of the Company, enforceable against the Company in accordance
     with its terms; (c) after giving effect to the amendments herein contained
     and except as set forth in the last sentence of paragraph 5 of this
     Amendment, each of the representations and warrants of the Company in that
     certain Loan Agreement dated as of August 25, 1998 between the Company and
     Investor (the "Loan Agreement") are true and correct on and as of the date
     hereof with the same force and effect as if made on and as of the date
     hereof; and (d) except as set forth in the last sentence of paragraph 5 of
     this Amendment, no Event of Default (as defined in the Loan Agreement)
     exists or has occurred and is continuing as of the date hereof.

5.   Investor represents and warrants to the Company that each of the
     representations and warranties it made to the Company in Article VI of the
     Loan Agreement with respect to the Warrants and the Warrant Shares are true
     and correct on and as of the date hereof with the same force and effect as
     if made on and as of the date hereof with respect to the December Warrants
     and the shares of Common Stock underlying the December Warrants. The
     Investor acknowledges that it is aware that the Company has not complied
     with its filing requirements under the Securities Exchange Act of 1934 in
     that the Company has not, as of the date hereof, filed (a) its annual
     report on Form 10-KSB for the fiscal year ended June 30, 1998, or (b) its
     quarterly report on Form 10-QSB for the period ended September 30, 1998.

6.   The Company agrees to pay, and to indemnify and hold Investor harmless for
     the payment of, all costs and expenses arising in connection with this
     Amendment, including the reasonable fees of counsel to Investor in
     connection with preparing this Amendment and the related amendment.

7.   The Company acknowledges and agrees that Investor has fully performed all
     of its obligations under the Loan Agreement and all documents executed in
     connection therewith and all actions which have been taken by Investor have
     been reasonable and appropriate under the circumstances and within its
     rights under the Loan Agreement and the Note and in that certain "Mortgage,
     Deed of Trust, Security Agreement and Financing Statement" dated as of
     August 25, 1998 between the Company, as Borrower, and Investor, as Lender.

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8.   Except as expressly amended hereby, the Company agrees that the Note and
     the Registration Rights Agreement and all other documents and agreements
     executed by the Company in connection with the Loan Agreement in favor of
     Investor are ratified and confirmed and shall remain in full force and
     effect, enforceable against the Company in accordance with their respective
     terms, and that it has no set off, counterclaim or defense with respect to
     any of the foregoing.

9.   Terms used but not defined herein shall have the respective meanings
     ascribed thereto in the Loan Agreement or December Warrant Agreement, as
     the case may be.

10.  This Amendment may be signed in any number of counterparts with the same
     effect as if the signatures thereto and hereto were upon the same
     instrument.

11.  This Amendment shall be deemed to be a contract made under the laws of the
     State of Colorado and for all purposes shall be construed in accordance
     with the internal laws of said State, provided, however, that if, as a
     result of the Company's incorporation in the State of Wyoming, the laws of
     that State should govern a particular issue, the internal laws of the State
     of Wyoming shall govern that issue.

12.  All judicial proceedings arising out of or relating to this Amendment may
     be brought in any state or federal court of competent jurisdiction in the
     State of California, and by execution and delivery of this Agreement, the
     Company accepts for itself generally and unconditionally, the nonexclusive
     jurisdiction of the aforesaid courts and waives any defense of forum non
     convenience and irrevocably agrees to be bound by any judgment rendered
     thereby in connection with this Amendment.

IN WITNESS WHEREOF, the parties hereto have executed this AMENDMENT NO. 1 TO
REGISTRATION RIGHTS AGREEMENT AND PROMISSORY NOTE effective as of the day and
year first above written.

                              COLORADO WYOMING RESERVE COMPANY



                              By: /s/Kim M. Fuerst
                                 -------------------------------------------
                              Kim M. Fuerst
                              Title: President

                              JAMES E. MOORE REVOCABLE TRUST U/D/T
                              DATED JULY 28, 1994


                              By: /s/James E. Moore
                                 -------------------------------------------
                                  James E. Moore , Trustee


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