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                                                                  EXHIBIT 10.14


                         FINANCIAL CONSULTING AGREEMENT


This Financial Consulting Agreement  ("Agreement"),  is made and entered into as
of December 31, 1996 by and between Hallwood  Petroleum,  Inc. ("HPI"),  and The
Hallwood Group Incorporated ("Consultant").

                                                     RECITALS

         HPI is engaged in numerous international activities and shall from time
to time require the financial  knowledge and expertise of the  Consultant or its
agents in regard to various transactions between Hallwood Energy Partners, L.P.,
a Delaware limited partnership (the  "Partnership"),  HEPGP  Ltd.("HEPGP"),  the
general partner of the Partnership, Hallwood Consolidated Resources Corporation,
a Delaware  corporation  ("HCRC"),  or their  affiliates,  and any third parties
(collectively, the "Energy Companies"); and

         The  Energy  Companies  desire  to  draw  upon  and  benefit  from  the
international financial knowledge and expertise of Consultant or its agents, the
Consultant  desires  to  consult  with the  Energy  Companies  and be  available
therefor,  and the  Consultant  is willing to undertake  and to perform  various
duties for HPI.

                                                     AGREEMENT

         In  consideration  of the  mutual  benefits  to be  derived  from  this
Agreement  and the covenants and  agreements  set forth herein,  the receipt and
sufficiency of which are acknowledged by the execution and delivery hereof,  the
parties agree as follows:

        i.  Appointment. HPI agrees to appoint the Consultant and the Consultant
agrees to accept such  appointment  and  undertakes to advise and consult with 
HPI upon the terms and conditions set forth in this Agreement.

         ii.      Duties of the Consultant.

                  2.1 General Duties.  The Consultant  shall furnish and perform
         international  consulting and advisory services to the Energy Companies
         to  enable  such  entities  to:  (i)  render  assistance  in  strategic
         planning;  and (ii) effect  acquisitions by the Energy Companies of oil
         and gas  interests  or  mergers  of the  Energy  Companies  with  other
         entities and shall  perform such services in or from Monaco or Antigua,
         or such other jurisdiction(s) as Consultant or its agents may, in their
         sole discretion, deem appropriate, and neither Consultant nor any agent
         of  Consultant  shall be  obligated  to provide any such  services,  or
         otherwise engage in any business of any nature

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         whatsoever,  in the United States or the United Kingdom. In particular,
         the Consultant's  duties and obligations  hereunder shall include:  (a)
         performing  such  duties at such  times and in such  manner as shall be
         mutually agreeable to HPI and the Consultant, although at all times the
         Consultant will retain control over how such services are performed and
         who the Consultant will hire to perform such services; (b) reporting to
         HPI and any other entity  designated by HPI, as needed,  to fulfill its
         obligations  regarding  the  rendition of  international  strategic and
         consulting   advice;   and  (c)  observing   and  complying   with  all
         resolutions, regulations and directions from time to time made or given
         by HPI as long as such  resolutions,  regulations and directions do not
         interfere with the manner in which Consultant performs its duties.

                  2.2  Relationship  of the Parties.  In performing its services
         under this Agreement, the Consultant shall be an independent contractor
         and,  as between HPI and the  Consultant,  neither HPI nor any other of
         the Energy Companies shall be responsible for  withholding,  collection
         or payment of income  taxes or for other  taxes of any nature on behalf
         of the Consultant or any agent of Consultant. Nothing contained in this
         Agreement shall make the Consultant the agent, employee, joint venturer
         or partner of the Energy  Companies or provide the Consultant  with the
         power  or  authority  to bind the  Energy  Companies  to any  contract,
         agreement or arrangement  with any individual or entity except with the
         prior written approval of such entities.

         iii. Nondisclosure and Confidentiality. The Consultant understands that
it has  developed  and been  exposed  to, or may develop or be exposed to highly
confidential information and trade secrets of HPI and the other Energy Companies
and,  including,  without  limitation,   geological  and  geophysical  data  and
analysis,  discoveries,  well logs,  drilling  techniques,  drilling  locations,
drilling  results,  land  acquisitions,  technical  studies,  future  plans  and
strategies (collectively,  "Confidential Information"),  and that maintenance by
HPI and the other Energy Companies of their proprietary Confidential Information
to  the  fullest  extent  possible  is  extremely  important.  Accordingly,  the
Consultant  covenants  that,  (a) except with the prior  written  consent of the
Partnership, it shall at all times keep confidential and not divulge, furnish or
make  accessible  to anyone  (except  HEPGP's  or the  Partnership's  authorized
representatives),  any confidential information to which the Consultant has been
or  shall  become  privy  relating  to  the  business  of the  Partnership,  the
Partnership  or any of its  affiliates  and,  (b) except with the prior  written
consent  of HCRC,  it shall at all  times  keep  confidential  and not  divulge,
furnish or make accessible to anyone (except HCRC's authorized representatives),
any  confidential  information  to which the Consultant has been or shall become
privy relating to the business of HCRC or any of its affiliates.  The provisions
of this Section 3 shall not apply to any  information to the extent (i) it is or
shall become  generally known to the public or the trade (without the commission
of a  tortious  act),  (ii) it is or shall  become  available  in trade or other
publications,  (iii)  the  Consultant  is  required  by  law  to  disclose  such
information  to any  person,  or  (iv)  that  agents  of  Consultant  need  such
information to assist  Consultant with the performance of its duties  hereunder.
With respect to clause (iv), however,  Consultant agrees to indemnify the Energy
Companies to the extent any agent of Consultant violates any provision contained
in this Section 3. Upon termination of the

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Consultant's  appointment  for any reason,  or if earlier  required by HPI,  the
Consultant  agrees  to  return  to HPI all  copies  of any  documents  or  items
previously  provided to Consultant and/or its agents containing any Confidential
Information.

         4. Certain  Payments.  The Consultant  acknowledges that it is aware of
the  provision  of United  States law  relating  to  prohibitions  of any person
representing  a United  States  company  from,  directly or  indirectly,  giving
anything of value to any foreign  official to influence the foreign  official in
directing or agreeing to do business  with the United  States firm. In addition,
the Consultant  acknowledges that it has read the Statement of Company Policy of
HPI regarding  payment of gifts to foreign  officials that has  previously  been
supplied to the Consultant.  The Consultant  hereby  undertakes to abide by such
laws  and  policy  and  will not use any part of the  amounts  paid  under  this
Agreement or any payments that are prohibited under such laws or policy.

         5 Term.  The  services of the  Consultant  under this  Agreement  shall
commence on the date of execution of this  Agreement (the  "Commencement  Date")
and shall continue  thereafter until June 30, 2000, unless earlier terminated as
provided in this Agreement (the "Term"); provided,  however, that this Agreement
shall  automatically  renew for  successive  additional  three (3) year  periods
(each, a "Renewal Term") commencing on the expiration of the Term or any Renewal
Term, as the case may be, on the same terms and conditions  provided for in this
Agreement,  except as may  otherwise  be agreed upon in writing by the  parties,
until this Agreement is terminated  pursuant to its terms. Either party may give
written notice to the other of its election not to renew this  Agreement,  which
written  election must be given not less than 30 days prior to the expiration of
the Term or any Renewal Term, as the case may be.

         6        Compensation.

         A. As compensation for services  rendered by the Consultant  hereunder,
HPI shall pay to the  Consultant  an annual fee of Five Hundred  Fifty  Thousand
Dollars ($550,000), due and payable in installments of Forty Five Thousand Eight
Hundred  Thirty  Three  Dollars and Thirty  Three Cents on the first day of each
month.

         B. The amounts paid  pursuant to paragraph A of this section shall be a
nonrefundable advance against any fees, commissions or other payments payable to
Consultant in the future for services  rendered by Consultant in connection with
any transactions between the HPI and any third party.

         C. HPI and the Consultant hereby acknowledge and agree that all amounts
payable  pursuant to paragraph A of this section are to be paid as a retainer to
secure,  for the benefit of the  Hallwood  Companies,  the  availability  of the
Consultant to perform the services  referred to in Section 2 of this  Agreement.
Consequently,  all  amounts  so payable  shall be so  payable,  without  offset,
withholding  or any  deduction  of any  nature  whatsoever,  whether  or not any
services are  performed  at any time,  except as provided in paragraph B of this
section.

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         D.       HPI shall reimburse Consultant for all reasonable and ordinary
out-of-pocket business expenses Consultant reasonably incurs in the performance
of its duties under this Agreement.


         7.  Termination.  Either party may terminate this Agreement at any time
upon the  following  events:  (i) any act of dishonesty on the part of one party
resulting  or intended  to result  directly or  indirectly  in personal  gain or
benefit at the expense of the other  party or material  damage of or to property
of the other party;  (ii) any act of fraud,  misappropriation,  embezzlement  or
willful  misconduct  by either  party or (iii) the willful  breach or  repeated,
habitual  neglect by either  party of its duties  under this  Agreement.  In all
other events,  this  Agreement may not be terminated at the will of either party
until the projects assigned under this Agreement have been completed.

         8.  Assignment.  Neither  party  hereto may  assign,  without the other
party's  prior  written  consent,  this  Agreement,  or any right or  obligation
hereunder,  and any and all assignments without such prior written consent shall
be null and void,  except that with the consent of Hallwood Group the Consultant
may designate agents to perform its obligations under this Agreement.

         9.       Miscellaneous.

         (i) Notices. Any notice to be given hereunder is to be given in writing
by either party to the other and  delivered  or sent by prepaid  airmail post or
facsimile  transmission  addressed  to the  address of the  addresses  set forth
opposite each party's name below or such other address as may be notified by one
party to the  other  for such  purposes  and shall be deemed to be served in the
case of  airmail  post three days  after  posting  and in the case of  facsimile
transmission immediately upon successful transmission.

         (ii)  Headings;  Pronouns.  The  headings  of the  paragraphs  of  this
Agreement are for convenience of reference only and are not to be considered and
construed in this Agreement. When the context so requires in this Agreement, the
masculine  gender  includes  the feminine  and neuter,  and the singular  number
includes the plural, and vice versa.

         (iii) Severability. Whenever possible, each provision of this Agreement
will be interpreted in such manner as to be effective and valid under applicable
law, but if any  provision of this  agreement is held to be invalid,  illegal or
unenforceable   in  any  respect  under  any  applicable  law  or  rule  in  any
jurisdiction,  such invalidity,  illegality or unenforceability  will not affect
any  other  provision  or any other  jurisdiction,  but this  agreement  will be
reformed,  construed  and  enforced  in such  jurisdiction  as if such  invalid,
illegal or unenforceable provisions had never been contained herein.



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         (iv)     Governing Law; Venue.  This Agreement shall be governed by and
construed in accordance with the laws of Texas and the parties agree to submit 
themselves to the jurisdiction of Texas.

         (v)      Counterparts.  This Agreement may be executed in multiple 
counterparts, all of which shall be deemed originals, but which counterparts 
shall constitute one and the same instrument.

         (vi) Binding  Agreement.  This Agreement  shall inure to the benefit of
and be binding  upon the parties and their  respective  successors  and assigns.
Whenever a reference to any party is made herein, such reference shall be deemed
to  include  a  reference  to  the  heirs,  executors,   legal  representatives,
successors and assigns of such party.

         (vii) Entire  Agreement.  This Agreement  contains the entire agreement
between  the parties  hereto  with  respect to the  subject  matter  hereof.  No
variations,  modifications  or changes herein or hereof shall be binded upon any
party  unless  set forth in a  document  duly  executed  by or on behalf of such
party.

         (viii)  Amendments.  This  Agreement  may  not  be  modified,  altered,
amended,  waived or terminated  orally,  unless in writing signed by the parties
hereto.

                                               *    *    *    *    *

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

                                                     CONSULTANT:

Address:                                        THE HALLWOOD GROUP INCORPORATED
3710 Rawlins
Suite 1500
Dallas, Texas 75219                            By:      /s/Melvin J. Melle
                                                Melvin J. Melle, Vice President


                                                 HPI:

Address:                                         HALLWOOD PETROLEUM, INC.
4582 S. Ulster Street Parkway
Suite 1700
Denver, Colorado 80237                          By:      /s/William L. Guzzetti
                                                  William L. Guzzetti, President


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