SUBSCRIPTION AGREEMENT
                               ----------------------

                                TIPPERARY CORPORATION
                               ---------------------


     This Subscription Agreement (this "Agreement") is made this 22nd day of
December 1998, by and between Tipperary Corporation, a Texas corporation (the
"Company"), whose principal place of business is 633 Seventeenth Street, Suite
1550, Denver, Colorado 80202, and Slough Estates USA Inc., a Delaware
corporation (the "Purchaser"), whose office is located at 33 West Monroe Street,
Suite 2000, Chicago, Illinois 60603.

     In consideration of the mutual promises and covenants herein contained, the
parties hereto agree as follows:

                                  I. STOCK PURCHASE

     1.1  STOCK PURCHASE.  Subject to the terms and conditions hereof and in
reliance upon the representations and warranties contained herein, the Company
hereby issues and sells to the Purchaser, and the Purchaser hereby purchases
from the Company, 2,000,000 shares (the "Shares") of common stock of the
Company, $.02 par value ("Common Stock"), for a purchase price of $2.00 per
Share, for an aggregate purchase price for the Shares of $4,000,000.

     1.2  PAYMENT FOR AND DELIVERY OF THE SHARES.  Concurrently herewith, (a)
the Purchaser hereby makes payment of the $4,000,000 total purchase price for
the Shares (the "Purchase Price") to the Company by wire transfer of immediately
available funds to such account or accounts as the Company has designated to the
Purchaser, and (b) on the date hereof, the Company shall deposit with Federal
Express for overnight delivery to the custodians of the Purchaser, or shall
otherwise deliver as the Purchaser may direct, a certificate for the Shares to
be purchased by the Purchaser, duly registered in the name of the Purchaser.

     1.3  RESTRICTIONS ON SHARES; SALES UNDER RULE 144.

     The Purchaser understands that:

     (a)  The offer and sale of the Shares has not been registered under the
Securities Act of 1933, as amended (the "Securities Act"), any state securities
laws or the laws of any foreign jurisdiction, but rather are being made
privately by the Company pursuant to the exemption from registration provided by
Section 4(2) of the Securities Act and applicable state law exemptions.

     (b)  All stock certificates evidencing the Shares shall bear a restrictive
legend in substantially the language set forth below.

     The shares represented by this Certificate have not been registered 
     under the Securities Act of 1933, as amended (the "Act"), and are
     "restricted securities" as that term is defined in Rule 144 under 
     the Act.  These shares may not be offered for sale, sold, or otherwise
     transferred except pursuant to an effective registration statement 
     under the Act or pursuant to an exemption from registration under the 
     Act, the availability of which is to be established to the satisfaction
     of the Company.


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     (c)  To facilitate sales by a holder of the Shares in transactions
qualifying under Rule 144 promulgated by the Securities and Exchange Commission
(the "Commission") under the Securities Act, if available, the Company agrees to
satisfy the current public information requirements of said Rule 144, for as
long as the Shares remain registered under the Securities Exchange Act of 1934,
as amended, and the rules and regulations of the Commission thereunder
(collectively the "Exchange Act"), and to provide said holder upon request with
such other information as such holder may require for compliance with the
provisions of said Rule 144.

                 II.  REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

     2.1  STATUS OF THE PURCHASER.  The Purchaser hereby represents, warrants
and agrees that it is an "Accredited Investor" as that term is defined in Rule
501(a) of Regulation D promulgated by the Commission under the Securities Act.

     2.2  INFORMATION PROVIDED RESPECTING THE COMPANY.  The Purchaser has been
supplied with information and materials concerning the Company and its
operations, structuring and financing, including but not limited to copies of
its Annual Report on Form 10-K for the fiscal year ended September 30, 1997, its
Forms 10-Q for the quarters ended December 31, 1997, March 31, 1998 and June 30,
1998, and its definitive proxy statement for the 1998 Annual Meeting of
Shareholders.  The Company has provided the Purchaser with the opportunity to
discuss with and ask questions of the Company's representatives concerning the
Company's business plan.  All information requested by the Purchaser from the
Company or its representatives concerning the business and financial condition
of the Company and the terms and conditions of this Agreement has been furnished
to the Purchaser's satisfaction.  The Purchaser has had the opportunity to ask
questions of and receive answers from management of the Company concerning the
terms and conditions of this Agreement, and to obtain from the Company any
additional information which the Company possesses or can acquire without
unreasonable effort or expense that is necessary to verify the accuracy of the
information provided to the Purchaser.

     2.3  SHARES ACQUIRED BY THE PURCHASER.

     The Purchaser represents, warrants and certifies to the Company as of the
date first above written that:

     (a)  The Purchaser is acquiring the Shares for the Purchaser's own account
and not for or on behalf of any other person;

     (b)  The Purchaser represents that the Shares have not been acquired with a
view towards distribution or for redistribution or with the current intent to
divide the Purchaser's participation with others;

     (c)  The Purchaser will only resell the Shares pursuant to registration
under the Securities Act and the laws of any applicable states or pursuant to an
available exemption from registration.  Prior to any proposed sale, assignment,
transfer or pledge of the Shares (other than transfers not involving a change in
beneficial ownership), unless there is in effect a registration statement under
the Securities Act covering the proposed transfer, the Purchaser shall give
written notice to the Company of its intention to effect such transfer, sale,
assignment or pledge.  The availability of an exemption from registration under
the Securities Act with respect to such transfer, sale, assignment or pledge
shall be 


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established to the reasonable satisfaction of the Company, including, as the
Company may request, the provision to the Company of an opinion of counsel that
such an exemption is available.

     2.4  INVESTMENT HEREIN IS CONSISTENT WITH THE PURCHASER'S INVESTMENT
PROGRAM.  The Purchaser further represents that the Purchaser is familiar with
the type of investment which the Shares constitute. The Purchaser believes that
the Shares subscribed for herein are Shares of the kind the Purchaser wishes to
acquire and that the nature of the Shares subscribed for and the amount of the
Purchaser's subscription is consistent with the overall investment program and
financial position of the Purchaser.  The Purchaser understands that Shares
purchased hereby have a high degree of risk, and the Purchaser may lose its
entire investment in the Shares.

     2.5  KNOWLEDGE AND EXPERIENCE.  The Purchaser has such knowledge and
experience in financial and business matters in general to evaluate the merits
and risks of the prospective investment and to make an informed investment
decision.

                 III.  REPRESENTATIONS AND WARRANTIES OF THE COMPANY

     As a material inducement to the Purchaser to enter into this Agreement and
purchase the Shares hereunder, the Company hereby represents and warrants that:

     3.1  ORGANIZATION, CORPORATE POWER, LICENSES.  The Company is a corporation
duly organized, validly existing and in good standing under the laws of Texas
and is qualified to do business in every jurisdiction in which its ownership of
property or conduct of business requires it to qualify, except to the extent
that the failure to so qualify would not have a material adverse effect on the
business or financial condition of the Company.  The Company possesses all
requisite corporate power and authority and all material licenses, permits and
authorizations necessary to own and operate its properties, to carry on its
businesses as now conducted and presently proposed to be conducted and to carry
out the transactions contemplated by this Agreement.  The copies of the
Company's Articles of Incorporation and Bylaws which have been furnished to
Purchaser's counsel reflect all amendments made thereto at any time prior to the
date of this Agreement and are correct and complete.

     3.2  CAPITAL STOCK AND RELATED MATTERS.

     (a)  As of the date hereof, the authorized capital stock of the Company
consists of 20,000,000 shares of $.02 par value Common Stock, of which
15,133,955 shares shall be issued and outstanding after the issuance of the
Shares hereunder, 10,000,000 shares of $1.00 par value Cumulative Preferred
Stock, none of which are issued, and 10,000,000 shares of $1.00 par value Non-
Cumulative Preferred Stock, none of which are issued.  There are 926,800 shares
of Common Stock reserved for issuance upon exercise of the stock options granted
by the Company and outstanding warrants of the Company.  As of the date hereof,
the Company has no outstanding stock or securities convertible or exchangeable
for any shares of its capital stock or containing any profit participation
features, nor any outstanding rights or options to subscribe for or to purchase
its capital stock or any stock or securities convertible into or exchangeable
for its capital stock or any stock appreciation rights or phantom stock plans,
except as set forth above.  As of the date hereof, the Company shall not be
subject to any obligation (contingent or otherwise) to repurchase or otherwise
acquire or retire any shares of its capital stock or any warrants, options or
other rights to acquire its capital stock.  As of the

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date hereof, all of the outstanding shares of the Company's capital stock shall
be validly issued, fully paid and nonassessable.

     (b)  There are no statutory or contractual shareholders' preemptive rights
or rights of refusal with respect to the issuance of the Shares hereunder.  The
Company has not violated any applicable federal or state securities laws in
connection with the offer, sale or issuance of any of its capital stock, and the
offer, sale and issuance of the Shares hereunder do not require registration
under the Securities Act or any applicable state securities laws.  Except as set
forth on the Capitalization Schedule, there are no agreements among the
Company's shareholders with respect to the voting or transfer of the Company's
capital stock.

     3.3  AUTHORIZATION; NO BREACH.  The execution, delivery and performance of
this Agreement and the issuance of the Shares have been duly authorized by the
Company.  This Agreement constitutes a valid and binding obligation of the
Company, enforceable in accordance with its terms, subject to the effects of (i)
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or
other laws now or hereafter in effect relating to creditors' rights generally,
and (ii) general principles of equity.  The execution and delivery by the
Company of this Agreement, the offering sale and issuance of the Shares and the
fulfillment of and compliance with the respective terms hereof and thereof by
the Company, do not and shall not (i) conflict with or result in a breach of the
terms, conditions or provisions of, (ii) constitute a default under, (iii)
result in the creation of any lien, security interest, charge or encumbrance
upon the Company's capital stock or assets pursuant to, (iv) give any third
party the right to modify, terminate or accelerate any obligation under, (v)
result in a violation of, or (vi) require any authorization, consent, approval,
exemption or other action by or notice or declaration to, or filing with,
(except as to such action as has been taken or such notice, declaration or
filing which the Company has made), any court or administrative or governmental
body or agency pursuant to, the Articles of Incorporation or Bylaws of the
Company, or any law, statute, rule or regulation to which the Company is
subject, or any agreement, instrument, order, judgment or decree to which the
Company is subject.

     3.4  BROKERAGE.  There are no claims for brokerage commissions, finders'
fees or similar compensation in connection with the transactions contemplated by
this Agreement based on any arrangement or agreement entered into by the
Company.  The Company shall pay, and hold Purchaser harmless against, any
liability, loss or expense (including, without limitation, reasonable attorneys'
fees and out-of-pocket expenses) arising in connection with any such claim.

     3.5  GOVERNMENTAL CONSENT, ETC.  All permits, consents, approvals or
authorizations of, or declarations to or filings with, any governmental
authority required in connection with the execution, delivery and performance by
the Company of this Agreement, or the consummation by the Company of any other
transactions contemplated hereby or thereby, have been made, except as expressly
contemplated herein or in the exhibits hereto.

     3.6  DISCLOSURE.  Neither this Agreement nor any of the exhibits,
schedules, attachments, written statements, documents, certificates or other
items prepared or supplied to Purchaser by or on behalf of the Company with
respect to the transactions contemplated hereby contain any untrue statement of
a material fact or omit a material fact necessary to make each statement
contained herein and therein not misleading.  There is no fact which the Company
has not disclosed to Purchaser in writing and of which any of its officers,
directors or executive employees is aware and which has had or would reasonably
be expected to have a material adverse effect upon the financial condition, 

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operating results, assets, customer or supplier relations, employee relations or
business prospects of the Company.

                    IV.  REGISTRATION RIGHTS UNDER SECURITIES ACT

     4.1  If the Company at any time proposes to register any issuance of its
securities under the Securities Act (other than a registration on Form S-8 in
connection with an employee stock purchase or option plan or on Form S-4 in
connection with mergers, acquisitions or exchange offerings), the Company will
at such time give prompt written notice to the Purchaser of its intention to do
so.  Upon the written request of the Purchaser, given within 30 days after
receipt of any such notice (which request shall state the intended method of
disposition of the Shares to be transferred by the Purchaser), the Company shall
use its best efforts to cause all of the Shares held by the Purchaser to be
registered under the Securities Act, all to the extent requisite to permit the
sale or other disposition (in accordance with the intended method thereof as
aforesaid) by the Purchaser of such Shares.  The rights granted pursuant to this
Section 4.1 shall not be effective with respect to the Purchaser in the case of
an underwritten public offering of securities of the Company by the Company
unless the Purchaser agrees to the terms and conditions, including underwriting
discounts and allowances, specified by the managing underwriter of such offering
with respect to such Shares.  The Company shall have the right to reduce the
number of Shares of the Purchaser to be included in a registration statement
pursuant to the exercise of the rights granted by this Section 4.1 if, and to
the extent that, the managing underwriter of such offering is of the good faith
opinion, supported by written reasons therefor that the inclusion of such Shares
would materially adversely affect the marketing of the securities of the Company
to be offered.

     4.2  If and whenever the Company is required by the provisions of this
Article IV to use its best efforts to effect the registration of any transfer of
Shares under the Securities Act, the Company will, as expeditiously as possible,

     (a)  prepare and file with the Commission a registration statement with
respect to such transfer and use its best efforts to cause such registration
statement to become and remain effective, but not for any period longer than
nine months;

     (b)  prepare and file with the Commission such amendments and supplements
to such registration statement and the prospectus used in connection therewith
as may be necessary to keep such registration statement effective, and to comply
with the provisions of the Securities Act with respect to the transfer of all
securities covered by such registration statement, including, without
limitation, taking all necessary actions whenever the Purchaser, with respect to
such Shares covered by such registration statement, shall desire to dispose of
the same;

     (c)  furnish to the Purchaser such number of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of the
Securities Act, and such other documents, as the Purchaser may reasonably
request in order to facilitate the disposition of the Shares owned by the
Purchaser and covered by such registration statement;

     (d)  use its best efforts to register or qualify the securities covered by
such registration statement under such other securities or blue sky laws of such
jurisdictions as the Purchaser shall request, and use its best efforts to do any
and all other acts and things which may be reasonably necessary to enable the
Purchaser to consummate the disposition in such jurisdiction of the Shares

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owned by the Purchaser and covered by such registration statement; provided
that, notwithstanding the foregoing, the Company shall not be required to
register in any jurisdiction as a broker or dealer of securities or to grant its
consent to service of process in any such jurisdiction solely on account of such
intended disposition by the Purchaser;

     (e)  furnish to the Purchaser a signed copy of an opinion of counsel for
the Company, in form and substance acceptable to the Purchaser, to the effect
that: (A) a registration statement covering such dispositions of Shares has been
filed with the Commission under the Securities Act and has been made effective
by order of the Commission, (B) such registration statement and the prospectus
contained therein and any amendments or supplements thereto comply as to form in
all material respects with the requirements of the Securities Act, and nothing
has come to such counsel's attention which would cause him to believe that the
registration statement or such prospectus, amendment or supplement, at the time
such registration statement or amendment became effective or such supplement was
filed with the Commission, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein (in the case of such prospectus, amendment or
supplement, in the light of the circumstances under which they were made) not
misleading (provided that such counsel need not render any opinion with respect
to the financial statements and other financial, engineering and statistical
data included therein), and (C) to the best of such counsel's knowledge, no stop
order has been issued by the Commission suspending the effectiveness of such
registration statement and no proceedings for the issuance of such a stop order
are threatened or contemplated;

     (f)  furnish to the Purchaser a blue sky survey in the form and of the
substance customarily prepared by counsel for the Company and accepted by
sellers of securities in similar offerings, discussing and describing the
application provisions of the securities or blue sky laws of each state or
jurisdiction in which the Company shall be required, pursuant to Section 4.2(d),
to register or quality such intended dispositions of such Shares, or, in the
event counsel for the underwriters in such offering shall be preparing a blue
sky survey, cause such counsel to furnish such survey to, and to allow reliance
thereon by, the Purchaser;

     (g)  otherwise use its best efforts to comply with all applicable rules and
regulations of the Commission under the Securities Act and the Exchange Act,
insofar as they relate to such registration and such registration statement; and

     (g)  use its best efforts to list such Shares on any securities exchange on
which any securities of the Company are then listed or to admit such Shares for
trading in any national market system in which any securities of the Company are
then admitted for trading, if the listing or admission of such securities is
then permitted under the rules of such exchange or system.

     4.3  With respect to the registration by the Company of transfers of Shares
under the Securities Act pursuant to Section 4.1, the Company shall pay all
expenses incurred by it in complying with this Article IV (including, without
limitation, all registration and filing fees, printing expenses, blue sky fees
and expenses, costs and expenses of audits, and reasonable fees and
disbursements of counsel for the Company and special counsel designated by the
Purchaser, but specifically excluding any underwriting discounts and allowances
that are allocable to the Shares being sold by, and which shall be paid by, the
Purchaser; provided, however, that if any registration statement filed with the
Commission by the Company under Section 4.1 shall not be declared effective by
the Commission, such attempted registration shall not constitute a registration
under this Section 4.3.

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     4.4  It shall be a condition precedent to the obligations of the Company to
take any action pursuant to this Article IV that the Purchaser shall furnish to
the Company such written information regarding the securities held by the
Purchaser as the Company shall reasonably request and as shall be required in
connection with the action to be taken by the Company.

     4.5  (a)  in the event of any registration of any transfer of Shares under
the Securities Act pursuant to this Article IV, the Company will indemnify and
hold harmless the Purchaser, each of its officers, directors and partners, and
each other person, if any, who controls the Purchaser within the meaning of the
Securities Act, and each underwriter, if any, who participates in the offering
of such securities, against any losses, claims, damages or liabilities (or
actions in respect thereof, joint or several, to which the Purchaser and each
officer, director or partner, controlling person or underwriter may become
subject under the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof arise out of or are based
upon any untrue statement or alleged untrue statement of any material fact
contained, on the effective date thereof, in any registration statement under
which such transfer of securities was registered under the Securities Act, any
preliminary prospectus or final prospectus contained therein, or any amendment
or supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, or any violation by the
Company of the Securities Act, and will reimburse the Purchaser and each of its
officers, directors and partners, and each such controlling person or
underwriter, for any legal or any other expenses reasonably incurred by the
Purchaser or its officers, directors and partners or controlling persons or by
each such underwriter, in connection with investigating or defending any such
loss, claim, damage, liability or action; provided, however, that the Company
will not be liable in any such case to the extent that any such loss, claim,
damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in such
registration statement, preliminary prospectus or prospectus or such amendment
or supplement in reliance upon and in conformity with written information
furnished to the Company through an instrument duly executed by the Purchaser
specifically for use in the preparation thereof.  In the event of any
registration by the Company or any transfer of securities under the Securities
Act pursuant to this Article IV, the Purchaser will indemnify and hold harmless
the Company, each other person, if any, who controls the Company within the
meaning of the Securities Act and each officer and director of the Company to
the same extent that the Company agrees to indemnity it, but only with respect
to the written information relating to the Purchaser furnished to the Company by
the Purchaser.

     (b)  Each indemnified party shall, as promptly as practicable upon receipt
of notice of the commencement of any action against such indemnified party or
its officers, directors or partners, or any controlling person of such
indemnified party, in respect of which indemnity may be sought from an
indemnifying party on account of the indemnity agreement contained in Section
4.5(a), notify the indemnifying party in writing of the commencement thereof. 
The omission of such indemnified party to so notify the indemnifying party of
any such action shall not relieve the indemnifying party from any liability
which it may have on account of the indemnity agreement contained in Section
4.5(a) to the extent that the failure to receive such notice within a reasonable
period of time shall not have caused harm, loss or damage to the indemnifying
party, provided that, conversely, if such failure to receive notice shall have
caused any harm, loss or damage to the indemnifying party, such failure shall
constitute a defense to any liability which such indemnifying party may have on
account of such agreement to the extent of the harm, loss or damage so caused. 
In case any such action shall be brought against any indemnified party, its
officers, directors and partners, or any such controlling person, and such
indemnified party shall notify the indemnifying party of the commencement
thereof,

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the indemnifying party shall be entitled to participate in (and, to the extent
that the indemnifying party shall wish, to direct) the defense thereof at the
indemnifying party's own expense, in which event the defense shall be conducted
by recognized counsel chosen by the indemnifying party and approved by the
indemnified party (whose approval shall not unreasonably be withheld) and the
indemnified party may participate in such defense at its own expense (unless it
is advised by counsel that actual or potential differing interests or defenses
exist or may exist, in which case such expenses shall be paid by the
indemnifying party, provided that the indemnifying party shall not be required
to pay the expenses for more than one counsel for all such indemnified parties).

                                  V.  MISCELLANEOUS

     5.1  GOVERNING LAW.  The provisions hereof will be construed in accordance
with the laws of the State of Texas.  The Company and the Purchaser hereby
submit to the jurisdiction of the state and federal courts located in Denver,
Colorado or Chicago, Illinois.

     5.2  INDEMNIFICATION.  The Purchaser agrees to indemnify and hold harmless
the Company and its officers, directors and persons who control the Company,
from and against all damages, losses, costs and expenses (including reasonable
attorneys' fees) which they may incur by reason of the failure of the Purchaser
to fulfill any of the terms or conditions of this Agreement, or by reason of any
breach of the representations and warranties made by the Purchaser in this
Agreement or in any document provided by it to the Company.  The Company agrees
to indemnify and hold harmless the Purchaser and its officers, directors and
persons who control the Purchaser, from and against all damages, losses, costs
and expenses (including reasonable attorneys' fees) which they may incur by
reason of the failure of the Company to fulfill any of the terms or conditions
of this Agreement, or by reason of any breach of the representations and
warranties made by the Company in this Agreement or in any document provided by
it to the Purchaser.

     5.3  ENTIRE AGREEMENT; AMENDMENT.  This Agreement constitutes the entire
understanding of the parties hereto and supersedes all prior agreements or
understandings with respect to the subject matter hereof.  This Agreement may
not be amended or modified except by an instrument in writing signed by the
party against whom enforcement is sought.

     5.4  ASSIGNMENT AND SUCCESSION; BENEFIT.  This Agreement may not be
assigned by any party without the prior written consent of the other parties,
but shall be binding upon and inure to the benefit of the parties hereto and
their respective successors and assigns.

     5.5  SEVERABILITY.  The invalidity or unenforceability of any particular
provisions of this Agreement shall not affect the other provisions hereof, and
this Agreement shall be construed in all respects as if such invalid or
unenforceable provisions were omitted.

     5.6  HEADINGS.  The section headings contained herein are for convenience
only and are not intended to define or limit the contents of such sections.

     5.7  NEUTRAL INTERPRETATION.  This Agreement constitutes the product of the
negotiation of the parties hereto, and the enforcement hereof shall be
interpreted in a neutral manner, and not more strongly for or against any party
based upon the source of the draftsmanship hereof.

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     5.8  COUNTERPARTS.  This Agreement may be executed in counterparts, which
shall be deemed to constitute one and the same instrument.

     IN WITNESS WHEREOF, the parties have executed this Agreement the day and
year first above written.



TIPPERARY CORPORATION                        SLOUGH ESTATES USA INC.



By:  /s/ David L. Bradshaw                   By:  Randall W. Rohner
     --------------------------------             -----------------------------
     David L. Bradshaw, President and             Randall W. Rohner, Vice
     Chief Executive Officer                      President and Chief Financial
                                                  Officer

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