<PAGE>   1
                                                                  EXHIBIT 10.25


                        THE HOUSTON EXPLORATION COMPANY
                             CHANGE OF CONTROL PLAN


1.       Purpose. The Houston Exploration Company Change of Control Plan (the
         "Plan") is hereby established effective as of October 26, 1999 (the
         "Effective Date"). The Plan sets forth the severance benefits and
         certain "stay on" bonuses provided by The Houston Exploration Company
         (the "Company", which term shall include any successor) for certain
         employees upon and following a Change of Control of the Company (as
         defined below).

2.       Definitions.

         "Annual Base Salary" means the Eligible Employee's annual base salary
         as in effect immediately prior to the effective date of the Change of
         Control.

         "Benefits" means the Severance Benefits, Stay-on Bonus and/or vesting
         in the Company stock options, as applicable.

         "Bonus Amount" means, with respect to an Eligible Employee, an amount
         equal to 125% of the Eligible Employee's annual target bonus
         percentage as in effect immediately prior to the Change of Control
         multiplied by the Eligible Employee's Annual Base Salary.

         "Cause" means:

                  (i)      the Eligible Employee's gross negligence in the
                           performance of the Eligible Employee's duties and
                           responsibilities;

                  (ii)     a material violation of any material Company policy,
                           including, without limitation, the theft,
                           embezzlement or misappropriation of Company funds
                           or property;

                  (iii)    the conviction of the Eligible Employee for a felony
                           involving moral turpitude; or

                  (iv)     the Eligible Employee's willful and continued
                           failure, after receipt of written notice from the
                           Company, to perform substantially the Eligible
                           Employee's duties and responsibilities (excluding
                           any such failure due to injury or illness).

<PAGE>   2

         "Change of Control" means:

                           (i) the acquisition by any individual, entity or
                  group (within the meaning of Section 13(d)(3) or 14(d)(2) of
                  the Securities Exchange Act of 1934, as amended) (a "Person")
                  of the beneficial ownership of 20 percent or more of either
                  (i) the then outstanding shares of common stock of the
                  Company (the "Outstanding Common Stock") or (ii) the combined
                  voting power of the then outstanding voting securities of the
                  Company entitled to vote generally in the election of
                  directors (the "Outstanding Voting Securities"), provided
                  that for purposes of this subsection (i), the following
                  acquisitions shall not constitute a Change of Control: (A)
                  any acquisition directly from the Company, (B) any
                  acquisition by the Company, (C) any acquisition by any
                  employee benefit plan (or related trust) sponsored or
                  maintained by the Company or any corporation controlled by
                  the Company, or (D) any acquisition by any corporation
                  pursuant to a transaction which complies with clauses (A),
                  (B) and (C) of subsection (iii) hereof; or

                           (ii) the individuals who, as of the Effective Date,
                  constitute the Board of Directors of the Company (the
                  "Incumbent Board") cease for any reason to constitute at
                  least a majority of the Board of Directors of the Company
                  (the "Board") provided that any individual becoming a
                  director subsequent to the Effective Date whose election, or
                  nomination for election by the Company's stockholders, was
                  approved by a vote of at least a majority of the directors
                  then comprising the Incumbent Board shall be considered as
                  though such individual was a member of the Incumbent Board,
                  but excluding, for this purpose, any such individual whose
                  initial assumption of office occurs as a result of an actual
                  or threatened election contest with respect to the election
                  or removal of directors or other actual or threatened
                  solicitation of proxies or consents by or on behalf of a
                  Person other than the Board; or

                           (iii) the consummation after the Effective Date of a
                  reorganization, merger or consolidation or other disposition
                  of all or substantially all of the assets of the Company (a
                  "Corporate Transaction") unless, in each case, following such
                  Corporate Transaction, (A) (1) all or substantially all of
                  the persons who were the beneficial owners of the Outstanding
                  Common Stock immediately prior to such Corporate Transaction
                  beneficially own, directly or indirectly, more than 60
                  percent of the then outstanding shares of common stock of the
                  corporation resulting from such Corporate Transaction, and
                  (2) all or substantially all of the persons who were the
                  beneficial owners of the Outstanding Voting Securities
                  immediately prior to such Corporate Transaction beneficially
                  own directly or indirectly, more than 60 percent of the
                  combined voting power of the then outstanding voting
                  securities entitled to vote generally in the election of
                  directors of the corporation resulting from such Corporate
                  Transaction (including, without limitation, a corporation
                  which as a result of such transaction owns the Company or all
                  or substantially all of the Company's assets either directly
                  or through one or more subsidiaries) in substantially the
                  same

                                      -2-

<PAGE>   3

                  proportions as their ownership of the Outstanding Common
                  Stock Corporate Transaction, as the case may be, (B) no
                  Person (excluding (1) any corporation resulting from such
                  Corporation Transaction or any employee benefit plan (or
                  related trust) of the Company or such corporation resulting
                  from such Corporate Transaction and (2) any Person approved
                  by the Incumbent Board) beneficially owns, directly or
                  indirectly, 20 percent or more of the then outstanding shares
                  of common stock of the corporation resulting from such
                  Corporate Transaction or the combined voting power of the
                  then outstanding voting securities of such corporation except
                  to the extent that such ownership existed prior to such
                  Corporate Transaction and (C) at least a majority of the
                  members of the board of directors of the corporation
                  resulting from such Corporate Transaction were members of the
                  Incumbent Board at the time of the execution of the initial
                  agreement or of the action of the Board providing for such
                  Corporation Transaction.

         "Eligible Employee" means an individual who on the date of the Change
         of Control is an employee of the Company.

         "Good Reason" means, without the Eligible Employee's written consent,
         (i) a significant adverse change in the Eligible Employee's
         authorities, duties, or responsibilities as in effect immediately
         prior to the date of the Change of Control, (ii) a reduction in the
         Eligible Employee's Annual Base Salary when compared with the same as
         in effect immediately prior to the date of the Change of Control, or
         (iii) the assignment of the Eligible Employee to a place of work that
         is more than 30 miles from the Eligible Employee's place of work
         immediately prior to the date of the Change of Control, excluding
         temporary assignments that are reasonably consistent with past
         practices of the Company.

         "Monthly Base Salary" means 1/12th of the Eligible Employee's Annual
         Base Salary.

         "Period of Severance" means the number of whole and fractional months
         equal to the quotient of (i) the sum of the amounts payable to the
         Eligible Employee pursuant to paragraph (a) of Attachment B, divided
         by (ii) the Eligible Employee's Monthly Base Salary.

         "Qualified Termination" means the Eligible Employee's employment with
         the Company is terminated on or within 12 months following the date of
         the Change of Control (a) for any reason other than: (i) death or a
         disability entitling the Eligible Employee to benefits under the
         Company's long term disability plan, (ii) a voluntarily termination by
         the Eligible Employee (excluding for a Good Reason), or (iii) by the
         Company for Cause; or (b) by the Eligible Employee for a Good Reason
         within 30 days after the date on which such Good Reason event occurs.

         "Release and Waiver" means a release and waiver of the Eligible
         Employee's employment related claims against the Company substantially
         in the form of such release adopted by the Company prior to the date
         of the Change of Control.

                                      -3-

<PAGE>   4

         "Severance Benefits" means the benefits provided in Attachment B
         hereto.

         "Stay-on Bonus" means the payment of the cash bonus amount as provided
         in Attachment A hereto.

         "Year of Service" means an Eligible Employee's full and fractional
         years of continuous employment with the Company, its predecessors and
         any affiliates, including any "contract employee" service, as of the
         Eligible Employee's date of termination of employment.

3.       Eligibility for Benefits. Subject to the provisions of Section 4
         below, each Eligible Employee who (i) incurs a Qualified Termination
         shall be eligible to receive Severance Benefits and (ii) is an
         Eligible Employee on the date of the Change of Control (x) shall be
         entitled to receive a Stay-on Bonus and (y) automatically shall be
         100% vested immediately prior to the Change in Control in all Company
         stock options granted to such person. For purposes of the Plan,
         employment with the Company shall also include employment with any
         affiliate of the Company.

4.       Benefit Limitations.

         (a)      Notwithstanding any provision in this Plan to the
                  contrary, it is an express condition precedent to an Eligible
                  Employee's entitlement to receive Severance Benefits that
                  such Eligible Employee execute, and not revoke, a Release and
                  Waiver. Each Eligible Employee shall be afforded not less
                  than 45 days to consider such Release and Waiver. In
                  addition, each Eligible Employee who executes any such
                  Release and Waiver shall have seven days following the
                  execution of the Release and Waiver to revoke the same by
                  delivering written notice of revocation to the Company's
                  designee at the Company's executive offices or such other
                  address as may be designated by the Company in writing. Any
                  such Release and Waiver which has not been revoked in the
                  time and manner prescribed above shall be effective as of the
                  eighth day following its execution.

         (b)      If an Eligible Employee is entitled to receive similar
                  severance benefits under another severance plan, program or
                  policy of the Company or an affiliate, the Severance Benefits
                  under this Plan shall be reduced by the similar severance
                  benefits provided to the Eligible Employee under such other
                  plan, program or policy.

5.       Administration of the Plan.

         (a)      The Plan Administrator shall be the Company. The duties of
                  the Company shall be performed by the individual who,
                  immediately prior to the Change of Control, is the Vice
                  President-Chief Accounting Officer of the Company (the
                  "VP-CAO"), without regards to whether his employment
                  terminates on or following the Change of Control. In the
                  event of the death or incapacity of the VP-CAO, these duties
                  shall

                                      -4-

<PAGE>   5

                  be performed by any officer of the Company. The VP-CAO shall
                  have the authority to control and manage the operation and
                  administration of the Plan. The Company shall fully indemnify
                  the VP-CAO against any and all liabilities arising by reason
                  of any act or failure to act made in good faith pursuant to
                  the provisions of the Plan, including expenses reasonably
                  incurred in the defense of any claim relating thereto.

         (b)      Subject to the terms of the Plan, the VP-CAO may from time to
                  time adopt such procedures, rules and regulations as it deems
                  appropriate for the administration of the Plan. In this
                  regard, the VP-CAO shall have such powers as may be necessary
                  to discharge its duties under the Plan, including the power:

                  (i)      to administer, interpret and construe the Plan and
                           to determine all questions with regard to
                           employment, eligibility, Benefits and other matters
                           for the purpose of administering the Plan, provided
                           that all such actions shall be applied in a
                           nondiscriminatory manner;

                  (ii)     to prescribe procedures to be followed and the forms
                           to be executed by Eligible Employees filing
                           application for Benefits under the Plan;

                  (iii)    to appoint or employ individuals to assist in the
                           administration of the Plan and any other agents it
                           deems advisable, including legal counsel, who may be
                           the legal counsel to the Company on other matters;
                           and

                  (iv)     to delegate to others any administrative or
                           ministerial duties as it may deem necessary or
                           appropriate for the administration of the Plan.

         (c)      Each Eligible Employee who claims Severance Benefits
                  under the Plan shall be required to apply therefor on the
                  form designated and provided by the Company. If any
                  application for a Severance Benefit is denied, the Company
                  shall notify the claimant within a reasonable time of such
                  denial setting forth the specific reasons therefor, and
                  afford such claimant a reasonable opportunity for a full and
                  fair review of the decision denying his claim. Notice of such
                  denial shall set forth, in addition to the specific reasons
                  for the denial, the following: (i) reference to pertinent
                  provisions of the Plan; (ii) such additional information as
                  may be relevant to denial of the claim; (iii) an explanation
                  of the claims review procedure; (iv) advice that such
                  claimant may request the opportunity to review pertinent Plan
                  documents and submit a statement of issues and comments. The
                  claimant will have 60 days to request a review of the denial
                  by the Company, which will provide a full and fair review.
                  The request shall be in writing. The claimant may review
                  pertinent Plan documents and submit comments in writing. The
                  Company shall render a decision within 60 days after
                  claimant's request for review (which may be extended to 120
                  days if circumstances so require) and shall advise claimant
                  in writing of its decision on such review specifying its
                  reasons and identifying appropriate provisions of the Plan.

                                      -5-

<PAGE>   6

         (d)      Notwithstanding anything herein to the contrary, the
                  Eligible Employee may (but shall not be required) to elect
                  that his or her claim for Severance Benefits be settled by
                  arbitration in the city in which the Eligible Employee
                  resides at such time in accordance with the rules of the
                  American Arbitration Association then in effect. Judgment may
                  be entered on the arbitrator's award in any court having
                  jurisdiction. All reasonable legal fees and costs incurred by
                  the Eligible Employee in connection with the resolution of
                  any claim shall be paid by the Company unless the arbitrator
                  finds the Eligible Employee brought the claim in bad faith.

         (e)      When it is determined that an Eligible Employee entitled to
                  Severance Benefits is legally incompetent, Severance Benefits
                  may be paid or provided to the spouse, legal guardian or
                  custodian of such person and such payment shall constitute a
                  complete discharge of all liability of the Company and the
                  Plan with respect to such payment.

7.       Amendment and Termination of the Plan.

         The Company, by action of the Board, reserves the right, at any time
         and from time to time, to amend in whole or in part any or all
         provisions of the Plan; provided, however, no such termination of the
         Plan or any amendment (or any part thereof) shall be effective with
         respect to an Eligible Employee that either (i) on or within six
         months prior to the Change of Control or (ii) 12 months after the
         Change of Control would reduce the Benefits such Eligible Employee
         would have received under the Plan but for such termination or
         amendment of the Plan.

8.       General

         (a)      Except to the extent preempted by applicable federal law,
                  this Plan shall be governed by the laws of the State of
                  Texas.

         (b)      The Plan is intended to conform with, and be administered in
                  conformance with, all applicable requirements of the Employee
                  Retirement Income Security Act of 1974, as amended. Should
                  any provision herein be inconsistent with any such a
                  requirement, the Company shall construe such provision in a
                  manner that is consistent with such requirement, but also is
                  as nearly consistent as is practical with the original
                  intention of such provision.

         (c)      This Plan does not constitute a contract or guarantee of
                  employment to any Eligible Employee.

         (d)      Benefits may not be assigned or alienated by an Eligible
                  Employee other than by will or the laws of descent and
                  distribution.

                                      -6-

<PAGE>   7

         (e)      The Company shall be entitled to withhold from all payments
                  or other compensation due an Eligible Employee all taxes
                  required by applicable law to be withheld by the Company with
                  respect to the Benefits.


                                  THE HOUSTON EXPLORATION COMPANY


                                  By:
                                  Name:  James G. Floyd
                                  Title: President and Chief Executive Officer


                                      -7-

<PAGE>   8

                                  ATTACHMENT A
                                 STAY-ON BONUS


         (a)      On or as soon as reasonably practical following the date of
                  the Change of Control, the Company shall pay to each Eligible
                  Employee a lump sum amount in cash equal to 50% of the
                  Eligible Employee's Bonus Amount, less any taxes required to
                  be withheld therefrom by the Company.

         (b)      On or as soon as reasonably practical following the earlier
                  of (i) 60 days after the date of the Change of Control or
                  (ii) the Eligible Employee's termination of employment (for
                  any reason), the Company shall pay to each Eligible Employee
                  a lump sum amount in cash equal to 50% of the Eligible
                  Employee's Bonus Amount, less any taxes required to be
                  withheld therefrom by the Company.

         (c)      The Stay-On Bonus payable to an Eligible Employee as provided
                  in paragraphs (a) and (b) above shall be in addition to the
                  regular performance bonus payable to the Eligible Employee
                  for 1999, which if earned, will be paid in early 2000 in
                  accordance with past Company practices.


                                      -i-

<PAGE>   9

                                  ATTACHMENT B
                               SEVERANCE BENEFITS


         (a)      On or as soon as reasonable practical following an Eligible
                  Employee's Qualified Termination, but excluding any Eligible
                  Employee who has a written employment agreement with the
                  Company on the date of the Change of Control, the Company
                  shall pay such Eligible Employee a lump sum amount in cash
                  equal to the sum of:

                  (i)      his or her Monthly Base Salary multiplied by 3,

                  (ii)     1/2 of his or her Monthly Base Salary multiplied by
                           the Eligible Employee's Years of Service, and

                  (iii)    1/2 of her or her Monthly Base Salary multiplied by
                           each full and partial $10,000 increment of the
                           Eligible Employee's Annual Base Salary;

                  provided, however, the sum of (i), (ii) and (iii) may not
                  exceed the Eligible Employee's Annual Base Salary.

         (b)      Each Eligible Employee, but excluding any Eligible
                  Employee who has a written employment agreement with the
                  Company on the date of the Change of Control, will continue
                  to be provided, without charge, during his or her Period of
                  Severance continued coverage under the Company's group health
                  (medical, dental and vision), life insurance, and long-term
                  disability plan(s) in which he or she participated on the
                  date his or her employment terminates (or in any successor
                  plan(s) thereto); provided, however, the continuation of
                  coverage under the Company's group health plan(s) without
                  charge (i) shall be conditioned on the Eligible Employee
                  timely electing following his or her termination of
                  employment continuation of coverage benefits under such group
                  health plan(s) pursuant to the Consolidated Omnibus Budget
                  Reconciliation Act of 1985 ("COBRA") and (ii) shall terminate
                  upon the end of the Eligible Employee's COBRA continuation
                  period if that period ends prior to the termination of his or
                  her Period of Severance.

                                      -ii-

<PAGE>   10

                                  ATTACHMENT C
                            VESTING OF STOCK OPTIONS

                  Immediately prior to the Change of Control, all Company stock
options of each Eligible Employee automatically shall become 100% vested
(exercisable). This Attachment C shall constitute an amendment to each Company
stock option plan.

                                     -iii-