AMENDMENT NO. 2
                                      TO
                        REGISTRATION RIGHTS AGREEMENT
                                     AND
                               PROMISSORY NOTE

THIS AMENDMENT NO 2 TO REGISTRATION RIGHTS AGREEMENT AND PROMISSORY NOTE (this
"Amendment") is made and entered into as of December 30, 1998 by and between
COLORADO WYOMING RESERVE COMPANY a Wyoming corporation, having its principal
place of business in Grand Junction, Colorado (the "Company"), and JAMES E.
MOORE REVOCABLE TRUST U/D/T DATED JULY 28, 1994, a trust with the trustee and
beneficiary residing in Playa del Rey, California (the "Investor").

RECITALS:

A. Contemporaneously with the execution and delivery hereof, the Investor is
extending repayment of its loan to the Company in the principal amount of
$120,000, as evidenced by that certain promissory note in favor of Investor
dated August 25, 1998 in the original principal sum of One Hundred Twenty
Thousand Dollars ($120,000.00) (the "First Note"), until February 15, 1999 (the
"Extension"), loaning the Company an additional $10,000 as evidenced by that
certain promissory note in favor of Investor dated December 30, 1998 in the
original principal sum of Ten Thousand Dollars ($10,000.00) (the "Second Note")
and purchasing from the Company, and the Company is selling to the Investor, the
December 30th Warrants (as defined below).

B. In connection with the Extension and the Second Note, the Investor and the
Company desire to amend that certain Registration Rights Agreement entered into
between the Company and the Investor as of August 25, 1998 (the "Registration
Rights Agreement"), as amended by Amendment No 1 to Registration Rights
Agreement and Promissory Note dated as of December 4, 1998 (the "First
Amendment") to extend the registration rights and obligations with respect to
the Common Stock (as defined in Section 1 of the Registration Rights Agreement,
as amended by the First Amendment) underlying the December 30th Warrants.

NOW, THEREFORE, it is agreed:

1.    The Registration Rights Agreement as amended by the First Amendment
      (hereinafter collectively, the "Registration Rights Agreement") shall be
      amended as follows:

      a.    The following provisions shall be added to Section 1.1 of the
            Registration Rights Agreement:

            "December 30th Warrant Agreement" shall mean that certain Warrant
      Agreement dated December 30, 1998 by and between the Company and the
      Investor and governing the December 30th Warrants.

            "December 30th Warrants" shall mean the warrants issued by the
      Company pursuant to the December 30th Warrant Agreement.

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      b.    The following provisions of Section 1.1 of the Registration Rights
            Agreement shall amended and shall replace the corresponding
            provisions of Section 1.1 of the Registration Rights Agreement:

            "Registrable Securities" shall mean (i) shares of Common Stock now
      owned or hereafter acquired by the Investor from the Company, (ii) any
      shares of Common Stock issued or then issuable upon complete or partial
      exercise of the Warrants, the December Warrants and/or the December 30th
      Warrants, and (iii) any shares of Common Stock issued as a dividend or
      other distribution with respect to or in exchange for or in replacement of
      the shares referenced in (i) and (ii) above, provided, however, that
      Registrable Securities shall not include any shares of Common Stock which
      have previously been registered or which have been sold to the public.

      c. Article III of the Registration Rights Agreement shall be amended and
restated to read:

                                      III
                              TRANSFER OF SHARES

            If, at any time, the Holder sells or otherwise transfers the
      Warrants, the December Warrants or the December 30th Warrants, or if,
      after the expiration of the period provided in Section 2.11 hereof, the
      Holder sells or otherwise transfers shares of Common Stock, then, in
      connection therewith, the Holder shall also be deemed to automatically
      transfer or assign the rights to cause the Company to register the
      Registrable Securities so transferred under Section 2 hereof, provided
      that the Company is given written notice prior to or at the time of such
      transfer or assignment, stating the name and address of the transferee or
      assignee. The Company shall not be obligated to register securities of any
      such transferee or assignee unless such transferee or assignee performs
      the obligations of a Holder under this Agreement.

2.    The second paragraph of the First Note shall be amended to read as 
      follows:

      The unpaid principal and accrued interest shall be payable in full on the
      earlier of (i) the receipt by the Borrower of any proceeds from public or
      private sale of any its capital stock or other securities or (ii) February
      15, 1999 (the "Due Date").

3.    The Company represents and warrants to Investor that (a) the execution, 
      delivery and performance of this Amendment are within its powers, have
      been duly authorized and are not in contravention with any law, with
      the Company's charter or bylaws, or any undertaking to which it is a
      party or by which it is bound; (b) this Amendment is the legal, valid
      and binding obligation of the Company, enforceable against the Company
      in accordance with its terms; (c) after giving effect to the
      amendments herein contained and in the First Amendment and except as
      set forth in the last sentence of paragraph 4 of this Amendment, each
      of the representations and warrants of the Company in that certain
      Loan Agreement dated as of August 25, 1998 between the Company and
      Investor (the "Loan Agreement") are true and correct on and as of the
      date hereof with the

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      same force and effect as if made on and as of the date hereof; and (d)
      except as set forth in the last sentence of paragraph 4 of this Amendment,
      no Event of Default (as defined in the Loan Agreement) exists or has
      occurred and is continuing as of the date hereof.

4.    Investor represents and warrants to the Company that each of the
      representations and warranties it made to the Company in Article VI of
      the Loan Agreement with respect to the Warrants and the Warrant Shares
      are true and correct on and as of the date hereof with the same force
      and effect as if made on and as of the date hereof with respect to the
      December 30th Warrants and the shares of Common Stock underlying the
      December Warrants. The Investor acknowledges that it is aware that the
      Company has not complied with its filing requirements under the
      Securities Exchange Act of 1934 in that the Company has not, as of the
      date hereof, filed its quarterly report on Form 10-QSB for the period
      ended September 30, 1998.

5.    The Company agrees to pay, and to indemnify and hold Investor harmless for
      the payment of, all costs and expenses arising in connection with this
      Amendment, including the reasonable fees of counsel to Investor in
      connection with preparing this Amendment and the related amendment.

6.    The Company acknowledges and agrees that Investor has fully performed all
      of its obligations under the Loan Agreement, the First Amendment and all
      documents executed in connection therewith and all actions which have been
      taken by Investor have been reasonable and appropriate under the
      circumstances and within its rights under the Loan Agreement and the First
      Note and in that certain "Mortgage, Deed of Trust, Security Agreement and
      Financing Statement" dated as of August 25, 1998 between the Company, as
      Borrower, and Investor, as Lender.

7.    Except as expressly amended hereby, the Company agrees that the First
      Note, the Second Note and the Registration Rights Agreement and all other
      documents and agreements executed by the Company in connection with the
      Loan Agreement and the Second Note in favor of Investor (including,
      without limitation, the First Amendment) are ratified and confirmed and
      shall remain in full force and effect, enforceable against the Company in
      accordance with their respective terms, and that it has no set off,
      counterclaim or defense with respect to any of the foregoing.

8.    Terms used but not defined herein shall have the respective meanings
      ascribed thereto in the Loan Agreement or December 30th Warrant Agreement,
      as the case may be.

9.    This Amendment may be signed in any number of counterparts with the same
      effect as if the signatures thereto and hereto were upon the same
      instrument.

10.   This Amendment shall be deemed to be a contract made under the laws of the
      State of Colorado and for all purposes shall be construed in accordance
      with the internal laws of said State, provided, however, that if, as a
      result of the Company's incorporation in the State of Wyoming, the laws of
      that State should govern a particular issue, the internal laws of the
      State of Wyoming shall govern that issue.

11.   All judicial proceedings arising out of or relating to this Amendment
      may be brought in any state

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      or federal court of competent jurisdiction in the State of California, and
      by execution and delivery of this Agreement, the Company accepts for
      itself generally and unconditionally, the nonexclusive jurisdiction of the
      aforesaid courts and waives any defense of forum non convenience and
      irrevocably agrees to be bound by any judgment rendered thereby in
      connection with this Amendment.

IN WITNESS WHEREOF, the parties hereto have executed this AMENDMENT NO. 2 TO
REGISTRATION RIGHTS AGREEMENT AND PROMISSORY NOTE effective as of the day and
year first above written.

                              COLORADO WYOMING RESERVE COMPANY



                              By:/s/Kim M. Fuerst
                                 -----------------------------
                              Kim M. Fuerst
                              Title: President

                              JAMES E. MOORE REVOCABLE TRUST U/D/T
                              DATED JULY 28, 1994


                              By:/s/James E. Moore
                                 -----------------------------
                                    James E. Moore, Trustee






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