CERTIFICATE OF CHANGE
                         IN NUMBER OF AUTHORIZED SHARES
                                 OF COMMON STOCK

         We, the undersigned,  Patrick J. Duncan, President and Virginia Cherry,
Assistant  Secretary,  of Pease Oil and Gas Company,  a Nevada  corporation,  do
hereby certify as follows:

         That the Board of  Directors  of said  corporation  at a  meeting  duly
convened and held effective as of the 17th day of November,  1998, in accordance
with N.R.S. ss. 78-207, adopted resolutions to decrease the number of authorized
shares of the corporation's  $0.10 par value common stock from 40,000,000 shares
to  4,000,000  shares and  correspondingly  decreasing  the number of issued and
outstanding shares of such class held by each common stockholder of record as of
the close of business on December 1, 1998 (the "Effective  Date"). The following
information  relates to the  reduction  in number of  authorized  shares and the
reverse stock split to be effected:

                  (a) and (b) The number of authorized  shares and the par value
         of each class and series of shares  before and after the change  hereby
         effected:
                                    Before Change      After Change
Common Stock, $0.10 Par Value         40,000,000         4,000,000
Preferred Stock, $0.01 Par Value       2,000,000         2,000,000

                  (c) The  number of shares of common  stock to be issued  after
         the change in exchange  for each issued  share of common stock prior to
         the change:
                                     Before Change                After Change
Each share                                1            one-tenth of one share(1)
All outstanding shares:               16,007,048                1,600,705(1)
-----------------
                  (1)      See item (d) below.

                  (d)      The provisions for the issuance of fractional shares
                 shall be as follows:
                           Fractional  shares  which would  otherwise be held by
                  any  stockholder  as a result of the reverse stock split shall
                  each be rounded up to the next highest  whole number of shares
                  and therefore no fractional shares shall be issued as a result
                  of the reverse stock split.

                  (e)   Approval of stockholders was not required.

                  (f) The  Effective  Date for the change  shall be the close of
                  business on December 1, 1998.

         The reverse stock split for outstanding $0.10 par value common stock of
the  corporation  does not  affect  the  number  nor the  rights  or  privileges
attributable to the corporation's outstanding or authorized preferred stock.

         Dated this 18th day of November, 1998.

                                               PEASE OIL AND GAS COMPANY


                                              By ______________________________
                                            Patrick J. Duncan, President


                                              By ______________________________
                                            Virginia Cherry, Assistant Secretary

STATE OF COLORADO )
                  ) ss.
COUNTY OF GRAND   )

         On November 18, 1998,  personally  appeared before me, a notary public,
Patrick  J.  Duncan,   President  and  Virginia  Cherry,   Assistant  Secretary,
respectively,  of Pease Oil and Gas Company, who acknowledged that they executed
the above  instrument  on behalf of Pease Oil and Gas Company and affirmed  that
the facts stated therein are true.

         My commission expires:

                                  ---------------------------------
                                  Notary Public