Exchange Agreement - Presidio Oil Co., Presidio Exploration Inc., Presidio West Virginia, Palisade Oil Inc. and Tom Brown Inc.


                                THIRD AMENDMENT
                                       TO
                               EXCHANGE AGREEMENT


         This Third Amendment to Exchange Agreement dated as of November 20,
1996, (the 'Third Amendment') is entered into by and among Presidio Oil
Company, a Delaware corporation, Presidio Exploration, Inc., a Colorado
corporation, Presidio West Virginia, a Delaware corporation, Palisade Oil,
Inc., a Colorado corporation, and Tom Brown, Inc., a Delaware corporation.

                                   RECITALS:

         A.      The parties hereto have previously entered into that certain
Exchange Agreement dated August 5, 1996, which was subsequently amended by a
First Amendment to Exchange Agreement dated as of August 20, 1996 and by a
Second Amendment to Exchange Agreement dated as of September 5, 1996 (as so
amended, the 'Exchange Agreement').

         B.      The parties hereto desire to amend certain provisions of the
Exchange Agreement as provided in this Third Amendment.

         Now, therefore, for and in consideration of the mutual covenants and
agreements set forth in this Third Amendment and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto hereby agree as follows:

         1.      Amendments to Article I.

                 (a)      The definition of the term 'Aggregate Consideration'
                 as it appears in Article I of the Exchange Agreement is hereby
                 deleted in its entirety and is hereby replaced with the
                 following:

                          'Aggregate Consideration' means $193,100,000.'

                 (b)      The definition of the term 'Cash Consideration' as it
                 appears in Article I of the Exchange Agreement is hereby
                 deleted in its entirety and is hereby replaced with the
                 following:

                          'Cash Consideration' means a cash payment in an
                 amount equal to the sum of (a) the Presidio Common Stock Cash
                 Consideration, plus (b) the excess of (I) the sum of (x)
                 $104,413,000, plus (y) the amount of accrued and unpaid
                 interest on the Bank Obligations allowed by an order of the
                 Bankruptcy Court, over (ii) all amounts, if any, paid by a
                 Presidio Party in respect of the Bank Obligations (other than
                 interest





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                 paid in respect thereof) or the Senior Secured Notes from the
                 date of this Agreement through and including the Closing.'

                 (c)      The definition of the term 'Exchange Common Stock' as
                 it appears in Article I of the Exchange Agreement is hereby
                 deleted in its entirety and is hereby replaced with the
                 following:

                          'Exchange Common Stock' means 5,348,485 shares of Tom
                 Brown Common Stock (or other securities as may be required
                 under Section 3.2), less the number of shares of Tom Brown
                 Common Stock distributable to Tom Brown under the Plan of
                 Reorganization in respect of its ownership of Senior Gas
                 Indexed Notes or any other Presidio Securities it may acquire
                 hereafter.'

         2.      Amendment to Section 4.4.  Section 4.4 of the Exchange
Agreement is hereby deleted in its entirety and is hereby replaced with the
following:

                          '4.4  Tom Brown to Vote for Plan of Reorganization.
                 Tom Brown shall vote, or shall cause to be voted, all Presidio
                 Securities beneficially owned by Tom Brown or any Affiliate
                 thereof in favor of the Plan of Reorganization and in such
                 manner as may be necessary to grant the release contemplated
                 by Section 10.07 of the Plan of Reorganization.'

         3.      Amendments to Section 9.1(c).  Clause (vii) of Section 9.1(C)
of the Exchange Agreement is hereby deleted in its entirety and is hereby
replaced with the following:

                          '(vii)  the Confirmation Order, in form and substance
                 reasonably acceptable to Tom Brown and confirming the Plan of
                 Reorganization, shall not have been entered by the Bankruptcy
                 Court on or before December 12, 1996 or the Confirmation Order
                 shall not have become a Final Order on or before January 9,
                 1997; provided, that Tom Brown shall not be entitled to
                 terminate this Agreement pursuant to this clause (vii) unless
                 Tom Brown has given Presidio prior written notice of its
                 intention to terminate this Agreement pursuant to this clause
                 (vii) within thirty (30) days after the above applicable
                 described date; or'

         4.      Plan and Disclosure Statement.  The parties hereby consent to
the amendment and supplement to the Plan of Reorganization and the Disclosure
Statement as respectively set forth in Exhibits A  and B hereto.

         5.      Definitions.  Defined terms used herein but which are not
expressly defined herein, shall have the meaning given such terms in the
Exchange Agreement as amended hereby.

         6.      Amendment.  This Third Amendment constitutes an amendment to
the Exchange Agreement pursuant to Section 10.7 of the Exchange Agreement.
Except as expressly amended by this Third Amendment, each and every provision
of the Exchange Agreement remains in full force and effect in accordance with
the terms thereof and, by reference, the terms and provisions of the Exchange
Agreement are incorporated herein and made a part hereof.





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         7.      Effective Date.  The terms and provisions of this Third
Amendment shall be effective as of the date stated in the initial paragraph
hereof.





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         IN WITNESS WHEREOF, this Third Amendment has been signed by each of
the parties hereto, all as of the date stated in the initial paragraph hereof.


                               PRESIDIO OIL COMPANY
                               
                               By:      /s/ Robert L. Smith                  
                                  ---------------------------------------------
                               Name:        Robert L. Smith                    
                                    -------------------------------------------
                               Title:   President and Chief Operating Officer  
                                     ------------------------------------------
                               
                               
                               PRESIDIO EXPLORATION, INC.
                               
                               By:      /s/ Robert L. Smith                  
                                  ---------------------------------------------
                               Name:        Robert L. Smith                    
                                    -------------------------------------------
                               Title:   President and Chief Operating Officer  
                                     ------------------------------------------


                               PRESIDIO WEST VIRGINIA, INC.
                               
                               By:      /s/ Robert L. Smith                  
                                  ---------------------------------------------
                               Name:        Robert L. Smith                    
                                    -------------------------------------------
                               Title:   President and Chief Operating Officer  
                                     ------------------------------------------

                               
                               PALISADE OIL, INC.
                               
                               By:      /s/ Robert L. Smith                  
                                  ---------------------------------------------
                               Name:        Robert L. Smith                    
                                    -------------------------------------------
                               Title:   President and Chief Operating Officer  
                                     ------------------------------------------
                               

                               TOM BROWN, INC.
                               
                               By:      /s/ W. R. Granberry                  
                                  ---------------------------------------------
                               Name:        W. R. Granberry                    
                                    -------------------------------------------
                               Title:   President                              
                                     ------------------------------------------
                                 




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