<PAGE>
 
          THIRD AMENDMENT TO FIRST RESTATED LOAN AGREEMENT (REVOLVER)

          THIS THIRD AMENDMENT TO FIRST RESTATED LOAN AGREEMENT (REVOLVER)
(herein called the "Amendment") made as of the 19th day of July, 1995, by and
among Western Gas Resources, Inc., a Delaware corporation ("Borrower"),
NationsBank of Texas, N.A., a national banking association, as Agent ("Agent"),
and NationsBank of Texas, N.A., Bank of Montreal, CIBC Inc., Societe Generale,
Southwest Agency, The First National Bank of Boston, Colorado National Bank,
Bank of America National Trust and Savings Association and Credit Lyonnais
Cayman Island Branch, (herein, collectively referred to as "Lenders").

                             W I T N E S S E T H:

          WHEREAS, Borrower, Agent and Lenders have entered into that certain
First Restated Loan Agreement (Revolver) dated as of September 2, 1994, as
amended by that certain First Amendment to First Restated Loan Agreement
(Revolver) dated as of December 2, 1994 and that certain Second Amendment to
First Restated Loan Agreement (Revolver) dated as of February 23, 1995 (as
amended to the date hereof, the "Original Agreement") for the purpose and
consideration therein expressed, whereby Lenders became obligated to make loans
to Borrower as therein provided; and

          WHEREAS, Borrower, Agent and Lenders desire to amend the Original
Agreement as expressly set forth herein;

          NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements contained herein and in the Original Agreement and in
consideration of the loans which may hereafter be made by Lenders to Borrower,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto do hereby agree as follows:

                                  ARTICLE I.

                          Definitions and References
                          --------------------------

          Section 1.1.  Terms Defined in the Original Agreement. Unless the
                        ---------------------------------------            
context otherwise requires or unless otherwise expressly defined herein, the
terms defined in the Original Agreement shall have the same meanings whenever
used in this Amendment.

                                     - 1 -
<PAGE>
 
          Section 1.2.  Other Defined Terms.  Unless the context otherwise
                        -------------------                               
requires, the following terms when used in this Amendment shall have the
meanings assigned to them in this Section 1.2.

                "Loan Agreement" shall mean the Original Agreement as amended
hereby.

                                  ARTICLE II.

                                  Amendments
                                  ----------
                                        
          Section 2.1.  Definitions.  The definition of "Debt Securities"
                        -----------                                      
contained in Section 1.1 of the Original Agreement is hereby amended in its
entirety to read as follows:

          "'Debt Securities' means collectively, (i) those senior notes dated
            ---------------                                                  
October 27, 1992, September 22, 1993, December 27, 1993 and October 27, 1994
issued by Borrower pursuant to that certain Master Shelf Agreement dated as of
December 19, 1991 between Borrower and the Prudential Insurance Company of
America (as amended and restated from time to time, the "Shelf Agreement") and
any additional notes issued pursuant to the Shelf Agreement (ii) the 7.65%
senior notes due April 30, 2003 in the aggregate principal amount of $50,000,000
issued by Borrower pursuant to various note purchase agreements among Borrower,
MIGC, MGTC, WGRS, WGRT and each member of the CIGNA Group, as amended and
restated from time to time and (iii) all other notes issued pursuant to note
purchase agreements among any Related Person and any member of the CIGNA Group,
Prudential Insurance Company of America, or any other institutional investor."

          Section 2.2.  Tangible Net Worth.
                        ------------------ 

          The definition of "Tangible Net Worth Minimum" contained in the last
sentence of Section 6.2(j) of the Original Agreement is hereby amended in its
entirety to read as follows:

          "As used in this subsection the term 'Tangible Net Worth Minimum'
          means the sum of (i) $345,000,000; plus (ii) fifty percent (50.0%) of
                                             ----
          Borrower's Consolidated cumulative net income earned after June 30,
          1995, if such figure is positive (zero percent, if negative); plus
                                                                        ----
          (iii) seventy-five percent (75.0%) of the cumulative net proceeds
          received by Borrower at any time after June 30, 1995 from the sale of
          any equity securities issued by Borrower or any of its Subsidiaries."

          Section 2.3.  Debt to Capitalization Ratio.
                        ---------------------------- 

          Section 6.2(m) of the Original Agreement is hereby amended in its
entirety to read as follows:

               "(m) Debt to Capitalization Ratio. Borrower's Debt to
                    ----------------------------
          Capitalization Ratio will, commencing June 30, 1995, never

                                    - 2 - 
<PAGE>
 
          be greater than (i) 0.60 to 1.0 at any time until and including
          October 31, 1996 and (ii) 0.55 to 1.0 at any time thereafter."

          Section 2.4.  EBITDA/Interest Ratio.
                        --------------------- 

          Section 6.2(p) of the Original Agreement is hereby amended in its
entirety to read as follows:

               "(p)  EBITDA/Interest Ratio. As of the end of each Fiscal
                     ---------------------
          Quarter, the ratio of Borrower's Consolidated EBITDA for the four
          immediately preceding consecutive Fiscal Quarters to Borrower's
          Consolidated Interest Charges for such period shall never, commencing
          June 30, 1995, be less than (i) 3.00 to 1.0 at any time until and
          including October 31, 1996, (ii) 3.25 to 1.0 at any time after October
          31, 1996 until and including October 31, 1997, and (iii) 3.75 to 1.0
          at any time after October 31, 1997. For purposes of this subsection,
          the term "Borrower's Consolidated EBITDA" means the sum of (I)
          Borrower's Consolidated earnings (or loss), after deduction of all
          expenses and other charges other than interest, income tax and that
          certain $2,000,000 restructuring charge in the second Fiscal Quarter
          of 1995 as a result of Borrower's general and administrative
          reductions plus (II) amounts deducted in the computation of such
          Consolidated earnings (or loss) for depreciation, amortization and
          other non-cash items. For purposes of this subsection the term
          "Borrower's Consolidated Interest Charges" means the aggregate amount
          of interest treated as an expense or capitalized on Borrower's
          consolidated financial statements.

                                  ARTICLE III.

                          Conditions of Effectiveness
                          ---------------------------

          Section 3.1.  Effective Date.  This Amendment shall become effective
                        --------------                                        
as of the date first above written when, and only when, Agent shall have
received, at Agent's office, (i) a counterpart of this Amendment executed and
delivered by Borrower and Majority Lenders (ii) an amendment fee equal to ten-
one hundredths of one percent (0.10%) of the Commitment (as of the date hereof)
of each Lender payable to Agent for the account of each Lender and (iii) each of
the following, each document (unless otherwise indicated) being dated the date
of receipt thereof by Agent, duly authorized, executed and delivered, and in
form and substance satisfactory to Agent:

               (a) a certificate of the Secretary of Borrower dated the date of
          this Amendment certifying that: (A) the resolutions adopted by the
          Board of Directors of Borrower attached as Exhibit 1 to the Omnibus
          Certificate of Borrower dated September 2, 1994 (the "Original
          Certificate") have not been amended or revoked, and continue in full
          force and effect, (B) the incumbency and authorization of the officers


                                    - 3 - 
<PAGE>
 
          of Borrower authorized to sign Loan Documents, with signature
          specimens of such officers, contained in the Original Certificate has
          not been amended and continues in full force and effect, (C) copies of
          the certified charter documents of Borrower (including by-laws),
          attached as Exhibits H and O to the Original Certificate have not been
          amended or revoked since the date of the Original Certificate, and
          continue in full force and effect, (D) no Default that has not been
          expressly waived by Lenders exists on and as of the date hereof and
          (E) all of the representations and warranties set forth in Article IV
          hereof and Article V of the Original Agreement are true and correct at
          and as of their respective times of effectiveness;

               (b) a favorable opinion from Messr. John Walter, Esq., counsel 
          for Borrower in a form acceptable to Lender; and

               (c) such supporting documents as Agent may reasonably request.

                                  ARTICLE IV.

                        Representations and Warranties
                        ------------------------------

          Section 4.1.  Representations and Warranties of Borrower. In order to
                        ------------------------------------------             
induce each Lender to enter into this Amendment, Borrower represents and
warrants to each Lender that:

               (a) The representations and warranties contained in each
          subsection of Section 5.1 of the Original Agreement are true and
          correct at and as of the time of the effectiveness hereof.

               (b) Borrower is duly authorized to execute and deliver this
          Amendment and is and will continue to be duly authorized to borrow
          monies and to perform its obligations under the Loan Agreement.
          Borrower has duly taken all corporate action necessary to authorize
          the execution and delivery of this Amendment and to authorize the
          performance of the obligations of Borrower hereunder and thereunder.

               (c) The execution and delivery by Borrower of this Amendment, the
          performance by Borrower of its obligations hereunder and the
          consummation of the transactions contemplated hereby do not and will
          not conflict with any provision of law, statute, rule or regulation or
          of the articles of incorporation and bylaws of Borrower, or of any
          material agreement, judgment, license, order or permit applicable to
          or binding upon Borrower, or result in the creation of any lien,
          charge or encumbrance upon any assets or properties of Borrower.
          Except for those which have been obtained, no consent, approval,
          authorization or order of any court or governmental authority or third
          party is required in connection with the execution and delivery by

                                    - 4 - 
<PAGE>
 
          Borrower of this Amendment or to consummate the transactions
          contemplated hereby.

               (d) When duly executed and delivered, this Amendment and the Loan
          Agreement will be a legal and binding obligation of Borrower,
          enforceable in accordance with its terms, except as limited by
          bankruptcy, insolvency or similar laws of general application relating
          to the enforcement of creditors' rights and by equitable principles of
          general application.

               (e) The audited annual Consolidated financial statements of
          Borrower dated as of December 31, 1994 and the unaudited quarterly
          Consolidated financial statements of Borrower dated as of March 31,
          1995 fairly present Borrower's Consolidated financial position at such
          dates and the Consolidated results of Borrower's operations and
          changes in Borrower's Consolidated cash flow for the respective
          periods thereof. Copies of such financial statements have heretofore
          been delivered to each Lender. Since March 31, 1995, no material
          adverse change has occurred in the financial condition or businesses
          or in the Consolidated financial condition or businesses of Borrower.

                                   ARTICLE V.

                                 Miscellaneous
                                 -------------

          Section 5.1.  Ratification of Agreements.  The Original Agreement as
                        --------------------------                            
hereby amended and each other Loan Document affected hereby are ratified and
confirmed in all respects.  Any reference to the Loan Agreement in any Loan
Document shall be deemed to be a reference to the Original Agreement as hereby
amended.  The execution, delivery and effectiveness of this Amendment shall not,
except as expressly provided herein, operate as a waiver of any right, power or
remedy of Agent or Lenders under the Loan Agreement or any other Loan Document
nor constitute a waiver of any provision of the Loan Agreement or any other Loan
Document.

          Section 5.2.  Survival of Agreements.  All representations,
                        ----------------------                       
warranties, covenants and agreements of Borrower herein shall survive the
execution and delivery of this Amendment and the performance hereof, including
without limitation the making or granting of the Loans, and shall further
survive until all of the Obligations are paid in full.  All statements and
agreements contained in any certificate or instrument delivered by Borrower or
any Related Person hereunder or under the Loan Agreement to any Lender shall be
deemed to constitute representations and warranties by, and/or agreements and
covenants of, Borrower under this Amendment and under the Loan Agreement.

          Section 5.3.  Loan Documents.  This Amendment is a Loan Document, and
                        --------------                                         
all provisions in the Loan Agreement pertaining to Loan Documents apply hereto.



                                    - 5 - 
<PAGE>
 
          Section 5.4.  Governing Law.  This Amendment shall be governed by and
                        -------------                                          
construed in accordance with the laws of the State of Texas and any applicable
laws of the United States of America in all respects, including construction,
validity and performance.

          Section 5.5.  Counterparts.  This Amendment may be separately executed
                        ------------                                            
in counterparts and by the different parties hereto in separate counterparts,
each of which when so executed shall be deemed to constitute one and the same
Amendment.

                                    - 6 - 
<PAGE>
 
          IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed as of the date first written above by their duly authorized
officers.


                                 WESTERN GAS RESOURCES, INC.


                                 By:/S/ John C. Walter
                                    ------------------
                                    Name: John C. Walter
                                    Title:


                                 NATIONSBANK OF TEXAS, N.A., as 
                                 Agent, Issuing Bank and Lender


                                 By:/S/ Michele L. Jones
                                    --------------------
                                    Name: Michele L. Jones
                                    Title:


                                 BANK OF AMERICA NATIONAL TRUST 
                                 AND SAVINGS ASSOCIATION


                                 By:/S/ Gary M. Tauyuki
                                    ----------------------
                                    Name: Gary M.Tauyuki
                                    Title:

                                 BANK OF MONTREAL


                                 By:/S/ Michael P. Stuckey
                                    --------------------------
                                    Name: Michael P. Stuckey
                                    Title:

                                 THE FIRST NATIONAL BANK OF 
                                 BOSTON


                                 By:/S/ Michael Kane
                                    --------------------------
                                    Name: Michael Kane
                                    Title:

                                 CREDIT LYONNAIS CAYMAN ISLAND 
                                 BRANCH


                                 By:/S/ R.A. Touis
                                    --------------------------
                                    Name: R.A. Touis
                                    Title:


                                    - 7 - 
<PAGE>
 
                                 CIBC INC.


                                 By:/S/ Gary C. Gaskill
                                    --------------------------
                                    Name: Gary C. Gaskill
                                    Title:


                                 COLORADO NATIONAL BANK


                                 By:/S/ Monte E. Deckerd
                                    --------------------------
                                    Name: Monte E. Deckerd
                                    Title:

                                 SOCIETE GENERALE, SOUTHWEST 
                                 AGENCY


                                 By:/S/ Mark A. Cox
                                    --------------------------
                                    Name: Mark A. Cox
                                    Title:


                                    - 8 - 
<PAGE>
 
            CONFIRMATION, ACKNOWLEDGEMENT AND CONSENT OF GUARANTORS


          Each of the undersigned (collectively "Guarantors") hereby (i)
acknowledges and consents to the foregoing Third Amendment to First Restated
Loan Agreement (Revolver); (ii) confirms the Restated Guaranty dated as of
September 2, 1994 executed by such Guarantor in favor of Agent and the Lenders
pursuant to the Original Agreement; and (iii) agrees that each of such
Guarantor's obligations and covenants with respect to such Restated Guaranty
shall remain in full force and effect after the execution of such Amendment.

          William J. Krysiak, Vice President-Finance of Western Gas Resources
Oklahoma, Inc., Western Gas Resources Texas, Inc., Western Gas Resources
Storage, Inc., Mountain Gas Resources, Inc., MGTC, Inc. and MIGC, Inc., is
executing this Confirmation, Acknowledgment and Consent of Guarantors in his
capacity of officer of each such corporation.

          Dated as of the 19th day of July, 1995.

                                          WESTERN GAS RESOURCES OKLAHOMA, INC.
                                          WESTERN GAS RESOURCES TEXAS, INC.
                                          WESTERN GAS RESOURCES STORAGE, INC.
                                          MOUNTAIN GAS RESOURCES, INC.
                                          MGTC, INC.
                                          MIGC, INC.



                                          By:/S/ William J. Krysiak
                                             -------------------------------
                                             William J. Krysiak,
                                             Vice President-Finance
                                    - 9 -