BEFORE THE OIL AND GAS CONSERVATION COMMISSION

OF THE STATE OF COLORADO

IN THE MATTER OF THE APPLICATION OF )

DELTA PETROLEUM CORPORATION FOR AN )

ORDER ESTABLISHING NEW SETBACK RULES ) CAUSE NO. 318

FOR FORMATIONS LYING BELOW 2,500 FEET ) DOCKET NO.__________

INCLUDING THE NIOBRARA, “D” AND “J” SAND, )

AND PALEOZOIC-MISSISSIPIAN FORMATIONS )

IN WELLS LOCATED ON CERTAIN LANDS IN )

TOWNSHIP 3 SOUTH, RANGE 49 WEST, 6^TH P.M. )

WASHINGTON COUNTY, COLORADO )

APPLICATION

COMES NOW the Applicant, Delta Petroleum Corporation, by and through its attorneys, Gosse & Simpson, and respectfully petitions the Oil and Gas Conservation Commission of the State of Colorado (the “Commission”) for an order changing the existing well setback rules applicable to certain lands covering formations lying below 2,500 feet and in support of this application states and alleges as follows:

1. Applicant is a corporation duly authorized to conduct business in the State of Colorado.

2. Applicant owns an interest in and operates the oil and gas leasehold estate as to formations lying below 2,500 feet, including, but not limited to, the Niobrara, “D” and “J” Sand, and Paleozoic-Mississippian Formations underlying the following described lands (hereafter the “Subject Lands”):

Township 3 South, Range 49 West, 6th P.M.

Section 4: S/2;

Section 5: S/2;

Section 6: S/2;

Section 7: All;

Section 8: All;

Section 9: All;

Section 15: All;

Section 16: All;

Township 3 South, Range 49 West, 6th P.M. (Cont’d.)

Section 17: All;

Section 18: All;

Section 19: All;

Section 20: All;

Section 21: All;

Section 22: All;

Section 23: All;

Section 24: All;

Section 25: All;

Section 26: All;

Section 27: All;

Section 28: All;

Section 29: All;

Section 30: All;

Section 31: All;

Section 32: All;

Section 33: All;

Section 34: All;

Section 35: All;

Section 36: All;

Washington County, Colorado.

3. That Applicant or its predecessors have drilled, tested, completed and produced multiple wells into the “J” Sand Formation upon certain nearby lands.

4. That the Subject Lands currently have not been spaced and are subject to Commission Rule 318.a. well location rules which require that each permitted well location within the Subject Lands for wells drilled below 2,500 feet shall be located no closer than 600 feet from any lease line and not less than 1,200 feet from any producible or drilling well or wells unless authorized by order of the Commission upon hearing.

5. That Applicant requests that each permitted well location for each well within the Subject Lands (as limited by Paragraph 6, below) for wells drilled to formations below 2,500 feet should be allowed to be located no closer than 300 feet from the boundaries of any lease line and no closer than 600 feet from any producible or drilling well or wells without exception being granted by the Director of the Commission.

6. That such permitted well locations on the Subject Lands as described under Paragraph 5, above, shall comply with the existing Rule 318.a. setback requirements so as not to encroach on lands and wells lying outside the Captioned Lands but within Township 3 South, Ranges 48 and 50 West, and Township 4 South, Ranges 48, 49 and 50 West, offsetting and adjacent to the Subject Lands.

7. That such permitted well locations described under Paragraph 5, above, shall not result in the drilling of more than one (1) well site or multi-well site per forty (40) acre governmental quarter-quarter section unless the provisions of Commission Rule 508.a., et seq., and 503.c. concerning a local public forum and a proposed plan to address protection of the environment, public health, safety, and welfare are complied with by supplemental application or by exception being granted by the Director of the Commission.

8. That Interested Parties for purposes of this Application are as defined by the provisions of Section 318 of the Commission Regulations and are as described on Exhibit “1” attached hereto.

9. Applicant believes that unless the Commission issues an order changing the setback requirements for wells drilled below 2,500 feet on the Subject Lands the oil and gas reserves of the Subject Lands will not be recovered.

10. Applicant contends that the Order requested herein is proper, will protect correlative rights, minimize the drilling of unnecessary wells, prevent the waste of oil and gas and insure proper and efficient development and promote conservation of the oil and gas resources in the State of Colorado.

WHEREFORE, Applicant prays that this matter be set for hearing in May, 2004, that notice of said hearing be given as required by law, and that following such hearing the Commission enter an order according to Applicant’s proposals set forth above, and for such other findings and orders as the Commission may deem proper or advisable.

Dated this day of April, 2004.

GOSSE & SIMPSON

______________________________

Harold E. Gosse, Reg. No. 8303

Attorney for Applicant

Address of Applicant’s Attorney:

Gosse & Simpson

475 Seventeenth Street, Suite 1350

Denver, Colorado 80202

Telephone: (303) 297-3466

Address of Applicant:

Delta Petroleum Corporation

475 Seventeenth Street, Suite 1400

Denver, CO 80202

Attn: Mr. Duke Harris, Landman

Telephone: (303) 293-9133

VERIFICATION

STATE OF COLORADO )

) ss.

CITY & COUNTY OF DENVER )

Lyell A. Coe, Land Manager of Delta Petroleum Corporation, upon oath deposes and says that he/she has read the foregoing Application and that the statements contained therein are true to the best of his/her knowledge, information and belief.

Delta Petroleum Corporation

By:__________________________________

Lyell A. Coe, its Land Manager

Subscribed and sworn to before me this day of April, 2004, by: Lyell A. Coe, Land Manager of Delta Petroleum Corporation.

Witness my hand and official seal. My commission expires:___________________

_______________________________________

Notary Public

EXHIBIT “1"

DELTA PETROLEUM CORPORATION

CAUSE NO. 318; DOCKET NO.__________

WASHINGTON COUNTY, COLORADO

INTERESTED PARTIES

Applicant/Owner:

Delta Petroleum Corporation

475 17^th Street, Suite 1400

Denver, CO 80202

Attn: Mr. Duke Harris, Landman

Interested Parties:

BAUCKE LARRY	39471 HWY 59	YUMA	CO	807590000
SWAN VALLEY LAND & LIVESTOCK INC	45785 CTY RD 16	COPE	CO	808120000
HICKERT JOHN J & LEOTA E	17978 CTY RD HH	AKRON	CO	807200000
HICKERT LAND CO	PO BOX H	AKRON	CO	807200000
HICKERT JOHN J JR & ROGER W	HENRY RT BOX 60	AKRON	CO	807200000
SMALL RAYMOND	BOX 72	AKRON	CO	807200000
HICKERT LAND CO INC	17978 CO RD HH	AKRON	CO	807200000
WEEKS STEVEN & RUTH	45785 CO RD 16	COPE	CO	808120000
SMELKER TERRI D	29555 HWY 24	STRATTON	CO	808360000
COLO STATE LAND BOARD	1313 SHERMAN ST ROOM 620	DENVER	CO	802030000
DAISY LANE FARM LLC	2538 E HWY 56	BERTHOUD	CO	805130000
THOMASON VERA L	9540 CO RD YY	COPE	CO	808120000
THOMASON VERA L LIFE ESTATE	600 W 10TH AVE	YUMA	CO	807590000
THOMASON WILLIAM W	9540 CO RD YY	COPE	CO	808120000
YAKUTAT LAND CORPORATION	3300 AIRPORT RD	BOULDER	CO	803010000
PAYNE LANNY D & TERRY R	2862 CO RD LL	FLAGLER	CO	808150000
CECIL JAMES	8500 CO RD AAA	COPE	CO	808120000

Local Governmental Designee:

Jan Huffaker

Washington County Assessor’s Office

150 Ash

Akron, CO 80720