Hallwood Energy Partners, L.P. and Hallwood Consolidated Resources Corporation Announce Meeting to Approve Consolidation.

DENVER--(BUSINESS WIRE)--April 30, 1999--

Hallwood Energy Partners, L.P. (AMEX:HEP and HEPC) and Hallwood Consolidated Resources Corporation (NASDAQ:HCRC) today announced the effectiveness of a Joint Proxy Statement/Prospectus for the consolidation of the two companies into the newly formed Hallwood Energy Corporation. The Joint Proxy Statement/Prospectus will be mailed by May 4, 1999, to the unitholders and stockholders of record as of April 14, 1999.

The consolidation must be approved by a majority of each class of the outstanding units of Hallwood Energy Partners and of the outstanding shares of stock of Hallwood Consolidated Resources. The special meetings of Hallwood Energy Partners and Hallwood Consolidated Resources will be held on May 25, 1999 in Dallas, Texas. Hallwood Consolidated Resources' special meeting is being held in lieu of its annual meeting. The consummation of the consolidation is also subject to a number of other conditions.

As a result of the consolidation, public holders of Class A Units of Hallwood Energy Partners will receive 0.7417 of a share of common stock of Hallwood Energy Corporation for each Class A Unit they now hold, and public holders of Class C Units will receive one share of redeemable preferred stock of Hallwood Energy Corporation for each Class C Units they now hold. Public stockholders of Hallwood Consolidated Resources will receive 1.5918 shares of common stock of Hallwood Energy Corporation for each share of stock they now hold. The Hallwood Group Incorporated will also contribute its energy interests to Hallwood Energy Corporation in exchange for additional shares of common stock of Hallwood Energy Corporation.

After the consolidation is complete, shares of Hallwood Energy Corporation will trade on the NASDAQ National Market System under the ticker symbols "HECO" for the common stock and "HECOP" for the preferred stock.

Hallwood Energy Partners is a public oil and gas master limited partnership headquartered in Denver, Colorado with properties primarily located in South Louisiana, the San Juan Basin in New Mexico and Colorado, West Texas, and the Rocky Mountain Region.

Hallwood Consolidated Resources is a public oil and gas company headquartered in Denver, Colorado with properties primarily located in the San Juan Basin in New Mexico and Colorado, West Texas, South Louisiana and Kansas.

This press release does not constitute an offer to sell or the solicitation of any offer to buy nor shall there be any sale of these securities in and state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state. A prospectus meeting the requirements of applicable securities laws may be obtained by contacting Investor Relations at 4582 S. Ulster Street Pkwy., Ste. 1700, Denver, Colorado 80237.