CERTIFICATE OF AMENDMENT
                                       OF
                      RESTATED CERTIFICATE OF INCORPORATION
                                       OF
                   HALLWOOD CONSOLIDATED RESOURCES CORPORATION



         Hallwood   Consolidated   Resources  Corporation  (the  "Corporation"),
organized  and existing  under and by virtue of the General  Corporation  Law of
Delaware (the "DGCL") does hereby certify:


     FIRST:  That  the  Board  of  Directors  of the  Corporation  duly  adopted
resolutions   setting  forth  an  amendment  to  the  Restated   Certificate  of
Incorporation of the Corporation (the  "Amendment"),  declaring the Amendment to
be advisable  and calling for the  submission  of the proposed  Amendment to the
stockholders  of the  Corporation  for  consideration  thereof.  The  resolution
setting forth the proposed Amendment is as follows:

         ARTICLE IV of the Restated  Certificate  of  Incorporation  of Hallwood
Consolidated Resources Corporation, a Delaware corporation, is hereby amended by
deleting  Section 1 in its entirety and  replacing it in its entirety to read as
follows:

         SECTION 1. The total  number of shares of all classes of stock that the
Corporation  shall  have  authority  to  issue  is  10,500,000,   consisting  of
10,000,000  shares of Common Stock,  par value $0.01 per share ("Common  Stock")
and 500,000  shares of Preferred  Stock,  par value $0.01 per share  ("Preferred
Stock").  The  consideration  for the issuance of the shares shall be paid to or
received by the  Corporation  in full before the  issuance and shall not be less
than the par value per share.  The  consideration  shall be as  permitted by the
laws of the State of Delaware in the absence of actual fraud in the transaction,
the  judgment of the Board of  Directors  as to the value of such  consideration
shall be conclusive.  Upon payment of such  consideration,  such shares shall be
deemed to be fully paid and nonassessable. In the case of a stock dividend, that
part of the surplus of the  Corporation  that is  transferred  to stated capital
upon  the  issuance  of  shares  as a  stock  dividend  shall  be  deemed  to be
consideration for such issuance.


         SECOND:  That  thereafter  pursuant  to a  resolution  of the  Board of
Directors,  a special  meeting of the  stockholders  of the Corporation was duly
called and held, upon notice in accordance with Section 222 of the DGCL at which
meeting the  necessary  number of shares as  required  by statute  were voted in
favor of the Amendment.


     THIRD:  That  the  Amendment  was  duly  adopted  in  accordance  with  the
provisions of Section 242 of the DGCL.


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     FOURTH:  That the Amendment shall be effective on the date this Certificate
of  Amendment  is filed and  accepted by the  Secretary of State of the State of
Delaware.


         IN WITNESS  WHEREOF,  the Corporation has caused this certificate to be
signed by William L.  Guzzetti,  its  President,  and  attested  by  Cathleen M.
Osborn, its Secretary, this 31st day of July 1997.


                                                     HALLWOOD CONSOLIDATED
                                                     RESOURCES CORPORATION



                                                     By:
                                                           William L. Guzzetti
                                                            President



ATTEST:
                  Cathleen M. Osborn
                  Secretary


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