HALLWOOD CONSOLIDATED RESOURCES CORPORATION


|X|      PLEASE MARK VOTES AS IN THIS EXAMPLE

                       FOR ANNUAL MEETING OF STOCKHOLDERS
                                  May 5, 1998

Proxy Solicited on Behalf of the Board of Directors

The undersigned  hereby appoints William L. Guzzetti and Cathleen M. Osborn, and
each of them, with full power of  substitution,  to act as attorneys and proxies
for the undersigned, to vote all shares of common stock of Hallwood Consolidated
Resources  Corporation  which the  undersigned is entitled to vote at the Annual
Meeting of  Stockholders,  to be held at The Four Seasons Hotel, 21 Avenue Road,
Toronto,  Ontario,  Canada,  on Tuesday,  May 5, 1998, at 9:30 a.m. (the "Annual
Meeting"),  and at any and  all  adjournments  or  postponements  thereof.  Said
proxies are herein specifically  authorized to vote in the election of Directors
and to vote said shares upon such other  matters as may properly come before the
Meeting or any adjournment or postponement  thereof,  as the above named proxies
shall determine.

Dated: _____________, 1998

- ----------------------------------      ----------------------------------
  Signature of Stockholder                 Signature of Stockholder

- ----------------------------------      ----------------------------------
  Print Name of Stockholder                Print Name of Stockholder

     1. The  election of all nominees  listed  below for a term  expiring at the
1999 Annual Meeting (except as marked to the contrary below).

For all Nominees     |_|

Withhold Authority To Vote For All Nominees |_|

         Anthony J. Gumbiner                         Jerry A. Lubliner
         Brian M. Troup                              Bill M. Van Meter
         William L. Guzzetti                         Hamilton P. Schrauff
         John R. Isaac, Jr.

INSTRUCTIONS:  To  withhold  your vote for any  individual  nominee,  insert the
nominee's name on the line provided below.

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     2. To transact such other  business as may properly come before the meeting
and all adjournments or postponements thereof.

         FOR      |_|              AGAINST  |_|               ABSTAIN  |_|

THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED, THIS
PROXY WILL BE VOTED FOR THE  ELECTION  OF THE NAMED  NOMINEES  AND FOR THE OTHER
PROPOSITIONS  STATED.  IF ANY OTHER BUSINESS IS PRESENTED AT THE ANNUAL MEETING,
THIS PROXY WILL BE VOTED AT THE DISCRETION OF THOSE NAMED IN THIS PROXY.

Please sign exactly as your name appears on the enclosed  card.  When signing as
attorney, executor,  administrator,  trustee, or guardian, please give your full
title.  Corporation  proxies should be signed in corporate name by an authorized
officer. If shares are held jointly, each holder should sign.

PLEASE  COMPLETE,  DATE,  SIGN AND MAIL  THIS  PROXY  PROMPTLY  IN THE  ENCLOSED
POSTAGE-PAID ENVELOPE.