DELTA PETROLEUM CORP/CO
EXHIBIT 10.1 - CREDIT AGREEMENT
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>3
<FILENAME>ex10-1.txt
<DESCRIPTION>EXHIBIT 10.1 - CREDIT AGREEMENT
<TEXT>
EXHIBIT 10.1


                                TABLE OF CONTENTS

                                                              Page


1.      Definitions                                             1
2.      Commitments of the Bank                                 8
3.      Notes Evidencing Loans                                 11
4.      Collateral Security                                    14
5.      Borrowing Base                                         15
6.      Fees                                                   17
7.      Prepayments                                            17
8.      Representations and Warranties                         17
9.      Conditions of Lending                                  21
10.     Affirmative Covenants                                  24
11.     Negative Covenants                                     31
12.     Events of Default                                      35
13.     The Agent and the Banks                                37
14.     Exercise of Rights                                     42
15.     Notices                                                42
16.     Expenses                                               43
17.     Indemnity                                              43
18.     Governing Law                                          44
19.     Invalid Provisions                                     44
20.     Maximum Interest Rate                                  44
21.     Amendments                                             45
22.     Multiple Counterparts                                  45
23.     Conflict                                               45
24.     Survival                                               45
25.     Parties Bound                                          45
26.     Assignments and Participations                         45
27.     Choice of Forum: Consent to Service of Process and
          Jurisdiction                                         47
28.     Waiver of Jury Trial                                   47
29.     Other Agreements                                       48
30.     Financial Terms                                        48
31.     Fraudulent Conveyance Savings Clause                   48





















                                CREDIT AGREEMENT

     THIS CREDIT AGREEMENT (hereinafter referred to as the "Agreement")
executed as of the 31st day of May, 2002, by and among DELTA PETROLEUM
CORPORATION, a Colorado corporation, DELTA EXPLORATION COMPANY, INC., a
Colorado corporation, PIPER PETROLEUM COMPANY, a Colorado corporation
(collectively referred to herein as the "Borrowers" and each individually are
sometimes referred to herein as a "Borrower") and BANK OF OKLAHOMA, N.A., a
national banking association ("BOK"), and each of the financial institutions
which is a party hereto (as evidenced by the signature pages to this
Agreement) or which may from time to time become a party hereto pursuant to
the provisions of Section 26 hereof or any successor or assignee thereof
(hereinafter collectively referred to as "Banks", and individually, "Bank")
and BOK, as Agent ("Agent").

                              W I T N E S S E T H:

     WHEREAS, Borrowers desire to borrow and the Banks desire to extend to
Borrowers a reducing, revolving line of credit;

     NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties hereby agree as follows:

1.     Definitions.  When used herein the terms "Agent", "Agreement", "Bank",
"Banks", "BOK", and "Borrower", shall have the meanings indicated above.  When
used herein the following terms shall have the following meanings:

     "Advance or Advances" shall mean a loan or loans hereunder.

     "Affiliate" shall mean any Person which, directly or indirectly,
controls, is controlled by or is under common control with the relevant
Person.  For the purposes of this definition, "control" (including, with
correlative meanings, the terms "controlled by" and "under common control
with"), as used with respect to any Person, shall mean a member of the board
of directors, a general partner or an executive officer of such Person, or any
other Person with possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of such Person, through
the ownership (of record, as trustee, or by proxy) of voting shares,
partnership interests or voting rights, through a management contract or
otherwise.  Any Person owning or controlling directly or indirectly ten
percent or more of the voting shares, partnership interests or voting rights,
or other equity interest of another Person shall be deemed to be an Affiliate
of such Person.

     "Applicable Margin" means the number of Basis Points per annum set forth
below, determined as a function of the Applicable Borrowing Base Usage Ratio:

          APPLICABLE BORROWING     INTEREST RATE
            BASE USAGE RATIO           MARGIN          NON-USE FEE
          --------------------     -------------     --------------

              -<  90%                 + .50%         50   Basis Points
            -< 30% but < 90%              0%         37.5 Basis Points
                < 30%                 - .50%         25   Basis Points

     "Applicable Borrowing Base Usage" shall mean the ratio of the Total
Outstandings to the immediately preceding Borrowing Base determined as set
forth in Section 5 below.  For the purposes of this definition, the term Total
Outstandings shall mean the average of the Total Outstandings for the
immediately preceding thirty (30) days prior to the Determination Date (as
such term is defined in Section 5 below).

     "Assignment and Acceptance" shall mean a document substantially in the
form of Exhibit "D" hereto.

     "Basis Point" shall mean one one-hundredth of one percent (0.01%).

     "Borrowing Base"  shall mean the value assigned by the Banks from time to
time to the Oil and Gas Properties pursuant to Section 5 hereof.  As of the
date of closing hereof, the Borrowing Base shall be $20,000,000.00.

     "Borrowing Date" shall mean the date elected by Borrowers pursuant to
Section 2(b) hereof for an Advance on the Revolving Loan.

     "Business Day"  shall mean the normal banking hours during any day (other
than Saturdays or Sundays) that banks are legally open for business in
Oklahoma City, Oklahoma.

     "Change of Management" shall occur if there is any material change in the
management personnel of Borrower.  A material change shall be deemed to have
occurred if Roger Parker ever ceases to hold a key, as determined by Banks,
management position with the Borrowers.

     "Commitment Fee" shall mean that certain fee payable by Borrowers to the
Agent for the ratable benefit of the Banks for maintaining funds available for
Borrowers in the amount of $200,000 based on the amount of one percent (1%) of
the Revolving Commitment.

     "Contested in Good Faith" shall mean a matter (a) which is being
contested in good faith by or on behalf of any Person, by appropriate and
lawful proceedings diligently conducted, satisfactory to the Agent, and for
which a reserve has been established in an amount determined in accordance
with GAAP, (b) in which foreclosure, distraint, sale,  forfeiture,  levy,
execution or other similar proceedings have not been initiated or have been
stayed and continue to be stayed, and (c) in which a good faith contest will
not materially detract from the value of the Collateral (set forth herein in
Section 4), materially jeopardize the rights of the Banks or the Borrowers
with respect thereto, materially interfere with the operation by the Borrowers
of its business, or otherwise have a Material Adverse Effect.

     "Current Assets" shall mean the total of the Borrowers' consolidated
current assets determined in accordance with GAAP.

     "Current Liabilities" shall mean the total of Borrowers' consolidated
current obligations as determined in accordance with GAAP.

     "Debt" shall mean, with respect to any Person, all obligations and
liabilities of such Person to any other Person including, without limitation,
all debts, claims, overdrafts, contingent liabilities and indebtedness
heretofore, now and/or from time to time hereafter owing, due or payable,
however, evidenced, created, incurred, acquired or owing and however arising,
whether under written or oral agreement, operation of law or otherwise as
shown in Borrowers' Financial Statements..

     "Debt Service Coverage Ratio" shall mean the quotient obtained by
dividing (i) a numerator consisting of (a) the annualized sum of the
Borrowers' consolidated net income for the fiscal quarter then ended, as
defined by GAAP, minus (b) the annualized sum of cash dividends or
distributions, as the case may be, declared or paid by Borrowers during the
fiscal quarter then ended, plus (c) the annualized sum for the fiscal quarter
then ended of Borrowers' depletion expense, depreciation expense, deferred
income tax expense, un-capitalized intangible drilling expense, un-capitalized
intangible material expense, un-capitalized discretionary non-recurring
reworking expense, amortization expense, and lease impairment expense plus the
annual projected interest expense for the Revolving Commitment (determined as
of the last day of the fiscal quarter then ended), by (ii) a denominator
consisting of (a) sixteen point sixty six percent (16.66%) of the Revolving
Commitment as of the last day of the fiscal quarter then ended, plus (b) the
annual projected interest expense for the Revolving Commitment (determined as
of the last day of the fiscal quarter then ended) and (c) any other current
maturities of long-term debt or capital lease obligations in favor of any
Person for the fiscal quarter then ended.  Any dividend or distribution made
in a fiscal quarter which is intended as the only dividend or distribution to
be made for that fiscal year shall not be annualized for purposes of
determining the Debt Service Coverage Ratio.

     "Default" shall mean any Event of Default and the occurrence of an event
or condition which would with the giving of any requisite notice and/or
passage of time or both constitute an Event of Default.

     "Default Rate"  shall mean a per annum variable rate of interest equal to
the interest rates then otherwise applicable hereunder as then in effect plus
five percent (5%) per annum, calculated on the basis of a year of 360 days and
actual number of days elapsed (including the first day but excluding the last
day), but in no event exceeding the Maximum Rate.

     "Defaulting Bank" the term "Defaulting Bank" is used herein as defined in
Section 3(f) hereof.

     "Effective Date" shall mean the date of this Agreement.

     "Eligible Assignee" shall mean any of (i) a Bank or any Affiliate of a
Bank; (ii) a commercial bank or federal savings association organized under
the laws of the United States, or any state thereof, and having a combined
capital and surplus of at least $500,000,000; (iii) a commercial bank
organized under the laws of any other country which is a member of the
Organization for Economic Cooperation and Development, or a political
subdivision of any such country, and having a combined capital and surplus of
at least $500,000,000.00, provided that such bank is acting through a branch
or agency located in the United States; (iv) a Person that is primarily
engaged in the business of commercial banking and that (A) is a subsidiary of
a Bank, (B) a subsidiary of a Person of which a Bank is a subsidiary, or (C) a
Person of which a Bank is a subsidiary; (v) any other entity (other than a
natural person) which is an "accredited investor" (as defined in Regulation D
under the Securities Act) which extends credit or buys loans as one of its
businesses, including, but not limited to, insurance companies, mutual funds,
investments funds and lease financing companies; and (vi) with respect to any
Bank that is a fund that invests in loans, any other fund that invests in
loans and is managed by the same investment advisor of such Bank or by an
Affiliate of such investment advisor (and treating all such funds so managed
as a single Eligible Assignee); provided, however, that no Affiliate of any
Borrower shall be an Eligible Assignee.

     "Environmental Laws" shall mean the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended by the Super Fund
Amendments and Reauthorization Act of 1986, 42 U.S.C.A. SS 9601, et seq., the
Resource Conservation and Recovery Act, as amended by the Hazardous Solid
Waste Amendment of 1984, 42 U.S.C.A. SS 6901, et seq., the Clean Air Act, 42
U.S.C.A. SS 1251, et seq., the Toxic Substances Control Act, 15 U.S.C.A.
SS2601, et seq., The Oil Pollution Act of 1990, 33 U.S.G. SS 2701, et seq.,
and all other laws, statutes, codes, acts, ordinances, orders, judgments,
decrees, injunctions, rules, regulations, order and restrictions of any
federal, state, county, municipal and other governments, departments,
commissions, boards, agencies, courts, authorities, officials and officers,
domestic or foreign, relating to air pollution, water pollution, noise
control and/or the handling, discharge, disposal or recovery of on-site or
off-site asbestos or "hazardous substances" as defined by 42 U.S.C.
SS 9601, et seq., as amended, as each of the foregoing may be amended from
time to time.

     "Environmental Liability" shall mean any claim, demand, obligation, cause
of action, order, violation, damage, injury, judgment, penalty or fine, cost
of enforcement, cost of remedial action or any other costs or expense
whatsoever, including reasonable attorneys' fees and disbursements, resulting
from the violation or alleged violation of any Environmental Law or the
imposition of any Environmental Lien (as hereinafter defined) which could
reasonably be expected to individually or in the aggregate have a Material
Adverse Effect.

     "Environmental Lien"  shall mean a Lien in favor of any court,
governmental agency or instrumentality or any other Person (i) for any
Environmental Liability or (ii) for damages arising from or cost incurred by
such court or governmental agency or instrumentality or other person in
response to a release or threatened release of asbestos or "hazardous
substance" into the environment, the imposition of which Lien could reasonably
be expected to have a Material Adverse Effect.

     "ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended.

     "Financial Statements" shall mean balance sheets, income statements,
statements of cash flow and appropriate footnotes and schedules, prepared in
accordance with GAAP.

     "GAAP" shall mean generally accepted accounting principles, consistently
applied.

     "Hedging Obligations" shall mean any commodity, interest rate or currency
swap, cap, floor, collar, forward obligation or other exchange or price
protection obligation or any option with respect to any such transaction.

     "Interest Payment Date" shall mean the 1st day of each month during the
term hereof.

     "Letters of Credit" the term "Letters of Credit" is used herein as
defined in Section 2(c) hereof.

     "Lien" shall mean any mortgage, deed of trust, pledge, security interest,
assignment, encumbrance or lien (statutory or otherwise) of every kind and
character.

     "Loan" shall mean the Revolving Loan.

     "Loan Documents" shall mean this Agreement, the Notes, the Security
Instruments and all other documents executed in connection with the
transaction described in this Agreement.

     "Majority Banks" shall mean Banks holding 66 2/3% or more of the
Revolving Commitments or if the Revolving Commitments have been terminated,
Banks holding 66 2/3% or more of the Total Outstandings.

     "Material Adverse Effect" shall mean any circumstance or event which
could substantially impair  (i) the consolidated assets or properties,
liabilities, financial condition, business, operations, affairs or
circumstances of Borrowers, or (ii) the ability of the Borrowers, taken as a
whole as discussed above, to carry out their collective business as of the
date of this Agreement or as proposed at the date of this Agreement to be
conducted or to meet their obligations under the Notes, this Agreement or the
other Loan Documents on a timely basis.

     "Maturity Date" shall mean May 31, 2005 or as such date may be extended
from time to time with the consent of all Banks.

     "Maximum Rate" shall mean at any particular time in question, the maximum
non-usurious rate of interest which under applicable law may then be charged
on the Note.  If such Maximum Rate changes after the date hereof, the Maximum
Rate shall be automatically increased or decreased, as the case may be,
without notice to Borrowers from time to time as of the effective date of each
change in such Maximum Rate.

     "Monthly Commitment Reduction" as used herein, as defined in Section 2(f)
hereof.

     "Net Income" shall mean Borrowers' consolidated net income after income
taxes calculated in accordance with GAAP.

     "Notes" shall mean the Revolving Notes, substantially in the form of
Exhibit "B" hereto issued or to be issued hereunder to each Bank,
respectively, to evidence the indebtedness to such Bank arising by reason of
the Advances on the Revolving Loan, together with all modifications, renewals
and extensions thereof or any part thereof.

     "Oil and Gas Properties" shall mean all of each Borrowers' oil, gas and
mineral properties and interests and related personal properties except for
those properties pledged pursuant to that certain Loan Agreement and related
documents between  Kaiser-Francis Oil Company and Delta Petroleum Corporation
dated December 1, 1999.

     "Other Financing" the term "Other Financing" is used herein as defined in
Section 13(l) hereof.

     "Payor" the term "Payor" is used herein as defined in Section 3(h)hereof.

     "Permitted Liens" shall mean (i) royalties, overriding royalties,
reversionary interests, production payments and similar burdens; (ii) joint
operating agreements, sales contracts or other arrangements for the sale of
production of oil, gas or associated liquid or gaseous hydrocarbons which
would not (when considered cumulatively with the matters discussed in clause
(i) above) deprive any Borrower of any material right in respect of any such
Borrower's assets or properties (except for rights customarily granted with
respect to such contracts and arrangements); (iii) statutory Liens for taxes
or other assessments that are not yet delinquent (or that, if delinquent, are
being Contested in Good Faith; (iv) easements, rights of way, servitudes,
permits, surface leases and other rights in respect to surface operations,
pipelines, grazing, logging, canals, ditches, reservoirs or the like,
conditions, covenants and other restrictions, and easements of streets,
alleys, highways, pipelines, telephone lines, power lines, railways and other
easements and rights of way on, over or in respect of any Borrower's assets or
properties and that do not individually or in the aggregate, cause a Material
Adverse Effect; (v) materialmen's, mechanic's, repairman's, employee's,
warehousemen's, landlord's, carrier's, pipeline's, contractor's,
sub-contractor's, operator's, non-operator's (arising under operating or joint
operating agreements), and other Liens (including any financing statements
filed in respect thereof) incidental to obligations incurred by any Borrower
in connection with the construction, maintenance, development, transportation,
storage or operation of such Borrower's assets or properties to the extent not
delinquent (or which, if delinquent, are being Contested in Good Faith; (vi)
all contracts, agreements and instruments, and all defects and irregularities
and other matters affecting any Borrower's  assets and properties which were
in existence at the time such Borrower's assets and properties were originally
acquired by such Borrower and all routine operational agreements entered into
in the ordinary course of business, which contracts, agreements, instruments,
defects, irregularities and other matters and routine operational agreements
are not such as to, individually or in the aggregate, interfere materially
with the operation, value or use of such Borrower's assets and properties,
considered in the aggregate; (vii) liens in connection with workmen's
compensation, unemployment insurance or other social security, old age pension
or public liability obligations; (viii) legal or equitable encumbrances deemed
to exist by reason of the existence of any litigation or other legal
proceeding or arising out of a judgment or award with respect to which an
appeal is being prosecuted in good faith and levy and execution thereon have
been stayed and continue to be stayed; (ix) rights reserved to or vested in
any municipality, governmental, statutory or other public authority to control
or regulate any Borrower's assets and properties in any manner, and all
applicable laws, rules and orders from any governmental authority; (x)
landlord's liens; (xi) Liens incurred pursuant to the Security Instruments or
otherwise created in favor of the Agent or the Banks pursuant to the Loan
Documents;  (xii) those liens set forth on Schedule 10 attached hereto; (xiii)
those liens consented to in writing by Banks; and (xiv) those Liens that do
not exceed $100,000 in the aggregate at any time outstanding or would not have
a Material Adverse Effect.

     "Person" shall mean an individual, a corporation, a partnership, an
association, a trust or any other entity or organization, including a
government or political subdivision or an agency or instrumentality thereof.

     "Plans" shall mean any plan subject to Title IV of ERISA and maintained
by any Borrower, or any such plan to which any Borrower is required to
contribute on behalf of its employees.

     "Prime Rate" shall mean as of any date, the fluctuating rate of interest
per annum equal to the prime rate of interest announced from time to time by
Chase Bank (which is not necessarily the lowest rate charged to any customer),
changing when and as said prime rate changes.

     "Pro Rata or Pro Rata Part" shall mean for each Bank, (i) for all
purposes where no Loan is outstanding, such Bank's Revolving Commitment
Percentage and (ii) otherwise, the proportion which the portion of the
outstanding Loans owed to such Bank bears to the aggregate outstanding Loans
owed to all Banks plus such Bank's Revolving Commitment Percentage, if any, at
the time in question.

     "Purchase and Sale Agreement" shall mean that certain Purchase and Sale
Agreement described in Section 8(f) below.

     "Reimbursement Obligations" shall mean at any time, the obligations of
the Borrowers in respect of all Letters of Credit then outstanding to
reimburse amounts actually paid by any Bank in respect of any drawing or
drawings under a Letter of Credit.

     "Required Payment" the term "Required Payment" is used herein as defined
in Section 3(h) hereof.

     "Revolving Commitment" shall mean (A) for all Banks, the lesser of (i)
20,000,000 or (ii) the Borrowing Base in effect from time to time, in each
case as reduced from time to time pursuant to Sections 2 and 7 hereof , and
(B) as to any Bank, its obligation to make Advances hereunder on the Revolving
Loan and purchase participations in Letters of Credit issued hereunder by the
Agent in amounts not exceeding, in the aggregate, an amount equal to such
Bank's Revolving Commitment Percentage times the total Revolving Commitment as
of any date.  The Revolving Commitment of each Bank hereunder shall be
adjusted from time to time to reflect assignments made by such Bank pursuant
to Section 26 hereof.  Each reduction in the Revolving Commitment shall result
in a Pro Rata reduction in each Bank's Revolving Commitment.

     "Revolving Commitment Percentage" shall mean for each Bank the percentage
derived by dividing its Revolving Commitment at the time of the determination
by the Revolving Commitments of all Banks at the time of determination.  The
Revolving Commitment Percentage of each Bank hereunder shall be adjusted from
time to time to reflect assignments made by such Bank pursuant to Section 26
hereof.

     "Revolving Loan" shall mean the loan or loans made under the Revolving
Commitment pursuant to Section 2 hereof.

     "Revolving Notes" shall mean the Revolving Notes described in Section 3
hereof.

     "Security Instruments" shall mean collectively this Agreement, all deeds
of trust, mortgages, security agreements, assignments of production and
financing statements, and other collateral documents covering the Oil and Gas
Properties and related personal property, equipment, oil and gas inventory and
proceeds of the foregoing, all such documents to be in form and substance
satisfactory to Agent.

     "Subsidiary" shall mean any corporation or other entity of which
securities or other ownership interests having ordinary voting power to elect
a majority of the board of directors or other persons performing similar
functions are at the time directly or indirectly owned by any Borrower or
another subsidiary.

     "Total Outstandings" shall mean as of any date, the sum of (i) the total
principal balance outstanding on the Revolving Notes, plus (ii) the total face
amount of all outstanding Letters of Credit, plus (iii) the total amount of
all unpaid Reimbursement Obligations.

     "Unscheduled Redeterminations" shall mean a re-determination of the
Borrowing Base made at any time other than on the dates set for the regular
semi-annual re-determination of the Borrowing Base which are made (A) at the
reasonable request of Borrowers, (B) at any time it appears to Agent or
Majority Banks, in the exercise of their reasonable discretion, that either
(i) there has been an unscheduled material decrease in the value of the Oil
and Gas Properties, or (ii) an event has occurred which is reasonably expected
to have a Material Adverse Effect.

2.   Commitments of the Bank.

     (a)     Terms of Revolving Commitment.  On the terms and conditions
hereinafter set forth, each Bank agrees severally to make Advances to the
Borrowers from time to time during the period beginning on the Effective Date
and ending on the Maturity Date in such amounts as the Borrowers may request
up to an amount not to exceed, in the aggregate principal amount outstanding
at any time, the Revolving Commitment.  The obligation of the Borrowers
hereunder shall be evidenced by this Agreement and the Revolving Notes issued
in connection herewith, said Revolving Notes to be as described in Section 3
hereof.  Notwithstanding any other provision of this Agreement, no Advance
shall be required to be made hereunder if any Event of Default (as hereinafter
defined) has occurred and is continuing or if any event or condition has
occurred or failed to occur which with the passage of time or service of
notice, or both, would constitute an Event of Default.  Each Advance under the
Revolving Commitment shall be an aggregate amount of at least $100,000 or a
whole number multiple thereof except an Advance of the entire remaining
unborrowed Revolving Commitment.  Irrespective of the face amount of the
Revolving Note or Notes, the Banks shall never have the obligation to Advance
any amount or amounts in excess of the Revolving Commitment or to increase the
Revolving Commitment.  Within the limit of each Bank's Revolving Commitment,
the Borrowers may borrow, repay and reborrow under this Section 2 prior to the
Maturity Date.

     (b)   Procedure for Borrowing.  Whenever the Borrowers or any Borrower
desires an Advance hereunder, they, or any one of them, shall give Agent
telegraphic, telex, facsimile or telephonic notice ("Notice of Borrowing") of
such requested Advance, which in the case of telephonic notice, shall be
promptly confirmed in writing.  Each Notice of Borrowing shall be in the form
of Exhibit "A" attached hereto and shall be received by Agent not later than
11:00 a.m. Oklahoma City, Oklahoma time, (i) one Business Day prior to the
Borrowing Date.  Each Notice of Borrowing shall specify (i) the Borrowing
Date, and (ii) the principal amount to be borrowed.  Upon receipt of such
Notice, Agent shall advise each Bank thereof; provided, that if the Banks have
received at least one (1) day's notice of such Advance prior to funding, each
Bank shall provide Agent in care of Bank of Oklahoma, N.A. at its office at
201 Robert S. Kerr Ave., Oklahoma City, Oklahoma  73102, not later than 1:00
p.m., Oklahoma City, Oklahoma time, on the Borrowing Date, in immediately
available funds, its pro rata share of the requested Advance, but the
aggregate of all such fundings by each Bank shall never exceed such Bank's
Revolving Commitment.  Not later than 2:00 p.m., Oklahoma City, Oklahoma time,
on the Borrowing Date, Agent shall make available to the Borrowers at the same
office, in like funds, the aggregate amount of such requested Advance.
Neither Agent nor any Bank shall incur any liability to the Borrowers in
acting upon any Notice of Borrowing which Agent or such Bank believes in good
faith to have been given by a duly authorized officer or other person
authorized to borrow on behalf of Borrowers or for otherwise acting in good
faith under this Section 2(b).  Upon funding of Advances by Banks in
accordance with this Agreement, pursuant to any such Notice, the Borrowers
shall have effected Advances hereunder.

     (c)   Letters of Credit.  On the terms and conditions hereinafter set
forth, the Agent shall from time to time during the period beginning on the
Effective Date and ending on the Maturity Date upon request of Borrowers issue
standby and/or commercial Letters of Credit for the account of Borrowers (the
"Letters of Credit") in such face amounts as Borrowers may request.  The face
amount of all Letters of Credit issued and outstanding hereunder shall be
considered as Advances and all payments made by the Agent on such Letters of
Credit shall be considered as Advances funded under the Revolving Notes.  Each
Letter of Credit issued for the account of Borrowers hereunder shall (i) be in
favor of such beneficiaries as specifically requested by Borrowers, (ii) have
an expiration date not exceeding the earlier of (a) one year or (b) the
Maturity Date, and (iii) contain such other terms and provisions as may be
reasonably required by Bank.  Each Bank (other than Agent) agrees that, upon
issuance of any Letter of Credit hereunder, it shall automatically acquire a
participation in the Agent's liability under such Letter of Credit in an
amount equal to such Bank's Revolving Commitment Percentage of such liability,
and each Bank (other than Agent) thereby shall absolutely, unconditionally and
irrevocably assume, as primary obligor and not as surety, and shall be
unconditionally obligated to Agent to pay and discharge when due, its
Revolving Commitment Percentage of Agent's liability under such Letter of
Credit.  The Borrowers hereby unconditionally agree to pay and reimburse the
Agent for the amount of each demand for payment under any Letter of Credit
that is in substantial compliance with the provisions of any such Letter of
Credit at or prior to the date on which payment is to be made by the Agent to
the beneficiary thereunder, without presentment, demand, protest or other
formalities of any kind.  Upon receipt from any beneficiary of any Letter of
Credit of any demand for payment under such Letter of Credit, the Agent shall
promptly notify Borrowers of the demand and the date upon which such payment
is to be made by the Agent to such beneficiary in respect of such demand.
Forthwith upon receipt of such notice from the Agent, but in any event no
later than one (1) day from the date of Borrower's receipt of such notice,
Borrowers shall advise the Agent whether or not they intend to borrow
hereunder to finance their obligations to reimburse the Agent, and if so,
submit a Notice of Borrowing as provided in Section 2(b) hereof.  If Borrowers
fail to so advise Agent and thereafter fail to reimburse Agent, the Agent
shall notify each Bank of the demand and the failure of the Borrowers to
reimburse the Agent, and each Bank shall reimburse the Agent for its Revolving
Commitment Percentage of each such draw paid by the Agent and unreimbursed by
the Borrowers.  All such amounts paid by Agent and/or reimbursed by the Banks
shall be treated as an Advance or Advances under the Revolving Commitment,
which Advances shall be immediately due and payable and shall bear interest at
the Default Rate.

     (d)   Procedure for Obtaining Letters of Credit.  The amount and date of
issuance, renewal, extension or re-issuance of a Letter of Credit pursuant to
the Banks' commitment above in Section 2(c) shall be designated by Borrowers'
written request delivered to Agent at least three (3) Business Days prior to
the date of such issuance, renewal, extension or re-issuance.  Concurrently
with or promptly following the delivery of the request for a Letter of Credit,
Borrowers shall execute and deliver to the Agent an application and agreement
with respect to the Letters of Credit, said application and agreement to be in
the form used by the Agent.  The Agent shall not be obligated to issue, renew,
extend or reissue such Letters of Credit if (A) the amount thereof when added
to the Total Outstandings would exceed the Revolving Commitment.  Borrowers
agree to pay the Agent for the benefit of the Banks commissions for issuing
the Letters of Credit (calculated separately for each Letter of Credit) in an
amount equal to the greater of (i) 2% of the maximum face amount of the Letter
of Credit, or (ii) $750.00. Agent shall keep all amounts up to $750.00 of any
letter of credit fee for its own account.  Amounts in excess of $750.00 shall
be shared on a pro rata basis with the Banks.   In addition, Borrowers shall
also pay to the Agent, as the Letter of Credit issuer, a fronting fee equal to
fifteen (15) Basis Points on the face amount of each Letter of Credit issued
hereunder.  Such commissions shall be payable prior to the issuance of each
Letter of Credit and thereafter on each anniversary date of such issuance
while such Letter of Credit is outstanding.

     (e)   Voluntary Reduction of the Commitment and Termination of
Commitment.  The Borrowers may at any time, upon not less than three (3)
Business Days' prior written notice to Agent, reduce the Revolving Commitment;
provided, however, that (i) each reduction in the Revolving Commitment must be
in the amount of $500,000 or more in increments of $100,000 and (ii) each
reduction must be accompanied by a prepayment of the Revolving Notes in the
amount by which the Total Outstandings exceed  the Revolving Commitment as
reduced pursuant to this Section 2.  Upon any early termination of the
Revolving Commitment, Borrowers must pay a termination fee in the amount of
$200,000.00.

     (f)   Mandatory Commitment Reductions

          (i)     Monthly Commitment Reduction.  The Borrowing Base and the
Revolving Commitment shall be reduced as of the first (1st) day of each month
by an amount determined by the Banks pursuant to Section 5(b) hereof (the
"Monthly Commitment Reduction").  The Monthly Commitment Reduction shall be
$260,000.00 beginning as of July 1, 2002 and shall continue at such amount
until redetermined pursuant to Section 5(b) hereof.  If as a result of any
such Monthly Commitment Reduction, the Total Outstandings ever exceed the
Revolving Commitment then in effect, the Borrowers shall make the mandatory
prepayment of principal required pursuant to Section 7(b) hereof.

          (ii)     Other Reductions.  The Borrowing Base shall be reduced from
time to time by the amount of any prepayment required by Section 10(q) hereof
upon the sale of Oil and Gas Properties.  If, as a result of any such
reduction in the Borrowing Base, the Total Outstandings ever exceed the
Borrowing Base then in effect, the Borrowers shall make the mandatory
prepayment of principal required pursuant to Section 7(b) hereof.

     (g)   Several Obligations.  The obligations of the Banks under the
Revolving Commitment are several and not joint.  The failure of any Bank to
make an Advance required to be made by it shall not relieve any other Bank of
its obligation to make its Advance, and no Bank shall be responsible for the
failure of any other Bank to make the Advance to be made by such other Bank.

3.    Notes Evidencing Loans.  The loans described above in Section 2 shall be
evidenced by promissory notes of Borrowers as follows:

     (a)   Form of Revolving Notes.  The Revolving Loan shall be evidenced by
a Note or Notes in the aggregate face amount of $20,000,000, and shall be in
the form of Exhibit "B" hereto with appropriate insertions (each a "Revolving
Note").  Notwithstanding the face amount of the Revolving Notes, the actual
principal amount due from the Borrowers to Banks on account of the Revolving
Notes, as of any date of computation, shall be the sum of Advances then and
theretofore made on account thereof, less all principal payments actually
received by Banks in collected funds with respect thereto.  Although the
Revolving Notes may be dated as of the Effective Date, interest in respect
thereof shall be payable only for the period during which the loans evidenced
thereby are outstanding and, although the stated amount of the Revolving Notes
may be higher, the Revolving Notes shall be enforceable, with respect to
Borrowers' obligation to pay the principal amount thereof, only to the extent
of the unpaid principal amount of the loans.  Irrespective of the face amount
of the Revolving Notes, no Bank shall ever be obligated to advance on the
Revolving Commitment any amount in excess of its Revolving Commitment then in
effect.

     (b)   Issuance of Additional Notes.  At the Effective Date there shall be
outstanding two (2) Revolving Notes in the aggregate face amount of
$20,000,000 payable to the order of BOK and Local Oklahoma Bank, N.A.,
respectively.  From time to time new Notes may be issued to other Banks as
such Banks become parties to this Agreement.  Upon request from Agent, the
Borrowers shall execute and deliver to Agent any such new or additional Notes.
From time to time as new Notes are issued the Agent shall require that each
Bank exchange their Notes for newly issued Notes to better reflect the extent
of each Bank's Revolving Commitment hereunder.  The Notes replaced shall be
marked to indicate that they have been replaced and/or returned to the
Borrowers.

     (c)   Interest Rates.  The Borrowers agree to pay interest on the Notes
calculated on the basis of the actual days elapsed in a year consisting of 360
days with respect to the unpaid principal amount of the Notes from the date
the proceeds thereof are advanced to Borrowers until maturity (whether by
acceleration or otherwise), at a varying rate per annum equal to the lesser of
(i) the Maximum Rate (defined herein), or (ii) the Prime Rate plus (or minus)
the Applicable Margin.  Subject to the provisions of this Agreement as to
prepayment, the principal of the Notes shall be payable as specified in
Section 3(e) hereof and interest shall be payable on each Interest Payment
Date.  Past due principal and, to the extent permitted by law, past due
interest, shall bear interest, payable on demand, at a rate per annum equal to
the Default Rate.

     (d)   Payment of Interest.  Interest on the Notes shall be payable on
each Interest Payment Date and upon any prepayment of principal.

     (e)   Payment of Principal.  Principal of the Revolving Notes shall be
due and payable to the Agent for the ratable benefit of the Banks on the
Maturity Date unless earlier due in whole or in part pursuant to Section 2(f)
above or as a result of an acceleration of the amount due or pursuant to the
mandatory prepayment provisions of Section 7(b) hereof.

     (f)   Payment to Banks.  Each Bank's Pro Rata Part of each payment or
prepayment of the Loans shall be directed by wire transfer to such Bank by the
Agent at the address provided to the Agent for such Bank for payments no later
than 2:00 p.m., Oklahoma City, Oklahoma, time on the Business Day such
payments or prepayments are deemed hereunder to have been received by Agent;
provided, however, in the event that any Bank shall have failed to make an
Advance as contemplated under Section 2 hereof (a "Defaulting Bank") and the
Agent or another Bank or Banks shall have made such Advance, payment received
by Agent for the account of such Defaulting Bank or Banks shall not be
distributed to such Defaulting Bank or Banks until such Advance or Advances
shall have been repaid in full to the Bank or Banks who funded such Advance or
Advances.  Any payment or prepayment received by Agent at any time after 12:00
noon, Oklahoma City, Oklahoma, time on a Business Day shall be deemed to have
been received on the next Business Day.  Interest shall cease to accrue on any
principal as of the end of the day preceding the Business Day on which any
such payment or prepayment is deemed hereunder to have been received by Agent.
If Agent fails to transfer any principal amount to any Bank as provided above,
then Agent shall promptly direct such principal amount by wire transfer to
such Bank.

     (g)   Sharing of Payments, Etc..  If any Bank shall obtain any payment
(whether voluntary, involuntary, or otherwise) on account of the Loans,
(including, without limitation, any set-off) which is in excess of its Pro
Rata Part of payments on any of the Loans, as the case may be, obtained by all
Banks, such Bank shall purchase from the other Banks such participation as
shall be necessary to cause such purchasing Bank to share the excess payment
pro rata with each of them; provided that, if all or any portion of such
excess payment is thereafter recovered from such purchasing Bank, the purchase
shall be rescinded and the purchase price restored to the extent of the
recovery.  The Borrowers agree that any Bank so purchasing a participation
from another Bank pursuant to this Section may, to the fullest extent
permitted by law, exercise all of its rights of payment (including the right
of offset) with respect to such participation as fully as if such Bank were
the direct creditor of the Borrowers in the amount of such participation.

     (h)   Non-Receipt of Funds by the Agent.  Unless the Agent shall have
been notified by a Bank or the Borrowers (the "Payor") prior to the date on
which such Bank is to make payment to the Agent of the proceeds of a Loan to
be made by it hereunder or the Borrowers are to make a payment to the Agent
for the account of one or more of the Banks, as the case may be (such payment
being herein called the "Required Payment"), which notice shall be effective
upon receipt, that the Payor does not intend to make the Required Payment to
the Agent, the Agent may assume that the Required Payment has been made and
may, in reliance upon such assumption (but shall not be required to), make the
amount thereof available to the intended recipient on such date and, if the
Payor has not in fact made the Required Payment to the Agent, the recipient of
such payment shall, on demand, pay to the Agent the amount made available to
it together with interest thereon in respect of the period commencing on the
date such amount was made available by the Agent until the date the Agent
recovers such amount at the overnight federal funds rate.

     (i)   Non-Use Fee.  In addition to interest on the Notes as provided
herein, to compensate the Banks for maintaining funds available, the Borrowers
shall pay to the Agent for the ratable benefit of the Banks a Non-Use Fee each
quarter during the Commitment Period. The Non-Use Fee is subject to adjustment
based upon the Applicable Borrowing Base Usage ratio.  On each Determination
Date (or if any such day falls on a day other than a Business Day, then on the
next succeeding Business Day), the Non-Use Fee shall be adjusted to reflect
the Non-Use Fee prescribed in the table set forth in the definition of
Applicable Margin above, as demonstrated by the most recently delivered
Compliance Certificate.

4.   Collateral Security.

     (a)   Pledge of Collateral.  Contemporaneously with the execution of this
Agreement and the Notes, the Borrowers shall grant and assign to Agent for the
ratable benefit of the Banks a first and prior Lien on certain of its Oil and
Gas Properties, certain related equipment, oil and gas inventory, certain bank
accounts and proceeds of the foregoing.  The Oil and Gas Properties mortgaged
to the Agent shall represent not less than 80% of the Engineered Value (as
hereinafter defined) of Borrowers' Oil and Gas Properties as of the Effective
Date.  Obligations arising from transactions between Borrowers and one or more
of the Banks providing for the hedging, forward sale or swap or crude oil or
natural gas or interest rate protection ("Hedging Obligations") shall be
secured by the Collateral described herein.  The Hedging Obligations shall be
secured and repaid on a pari passu basis with the indebtedness and obligations
of the Borrowers under the Loan Documents. All Oil and Gas Properties and
other collateral in which Borrowers hereafter grant to Agent for the ratable
benefit of the Banks a first and prior Lien (to the satisfaction of the Agent)
in accordance with this Section 4, as such properties and interests are from
time to time constituted, are hereinafter collectively called the
"Collateral".

     (b)   Documentation and Title Review.  The granting and assigning of such
security interests and Liens by Borrowers shall be pursuant to Security
Instruments in form and substance reasonably satisfactory to the Agent.
Concurrently with the delivery of each of the Security Instruments or within a
reasonable time thereafter, Borrowers shall furnish to the Agent mortgage and
title opinions or other title information satisfactory to Agent with respect
to the title and Lien status of Borrowers' interests in not less than 75% of
the Engineered Value of the Oil and Gas Properties covered by the Security
Instruments as Agent shall have designated.  "Engineered Value" for this
purpose shall mean future net revenues discounted at the discount rate being
used by the Agent as of the date of any such determination utilizing the
pricing parameters used in the engineering report furnished to the Agent for
the ratable benefit of the Banks, pursuant to Sections 5 and 10 hereof.
Borrowers will cause to be executed and delivered to the Agent, in the future,
additional Security Instruments if the Agent reasonably deems such are
necessary to insure perfection or maintenance of Banks' security interests and
Liens in the Collateral or any part thereof.

     (c)   Letters in Lieu of Transfer Orders.  The Borrowers shall provide
the Agent for the benefit of the Banks, undated letters in lieu of transfer
orders, in form and substance satisfactory to Agent, from the Borrowers to
each purchaser of hydrocarbons and disburser proceeds of hydrocarbons from and
attributable to the Oil and Gas Properties, together with additional letters
with addresses left blank authorizing and directing the addressees to make
future payments attributable to hydrocarbons from the Oil and Gas Properties
directly to the Agent for the benefit of the Banks.  The Banks agree that none
of the letters in lieu of transfer orders provided by the Borrowers pursuant
to this Section 4(c) will be sent to the addressee prior to the occurrence of
an Event of Default, at which time the Agent may, at its option and in
addition to the exercise of any of its other rights and remedies, send any and
all of such letters to such addressees; provided, however, that upon the
occurrence of an Event of Default other than those specified in Sections 12(f)
and (g), the Agent shall not send any or all of such letters until the
applicable period to cure, if any, such Default has lapsed without such
Default being cured.  Borrowers hereby designate the Agent as its agent and
attorney-in-fact, to act in its name, place and stead for the purpose of
completing and delivering any and all letters in lieu of transfer orders
delivered by the Borrowers to the Agent for the benefit of the Banks pursuant
to Sections 4(c) and 9(a)(viii) hereof, including, without limitation,
completing any blanks contained in such letters and attaching exhibits thereto
describing the relevant Collateral.  Borrowers hereby ratify and confirm all
that the Agent shall lawfully do or cause to be done by virtue of this power
of attorney and the rights granted with respect to such power of attorney.
This power of attorney is coupled with the interests of the Agent in the
Collateral, shall commence and be in full force and effect as of the Effective
Date and shall remain in full force and effect and shall be irrevocable until
the obligations, if any, of the Agent hereunder have terminated and the full
satisfaction of all obligations due hereunder or under the Notes.  The powers
conferred on Agent by this appointment may only be exercised by the Agent by
execution by any Person who, at the time of exercise, is an officer of the
Agent, and are solely to protect the interests of the Agent and the Banks
under the Loan Documents and shall not impose any duty upon the Agent to
exercise any such powers.  The Agent shall be accountable only for amounts
that it actually receives or has expressly directed that others receive as a
result of the exercise of such powers and shall not be responsible to the
Borrowers, or any other Person for any act or failure to act with respect to
such powers, except for gross negligence or willful misconduct.

5.   Borrowing Base.

     (a)   Initial Borrowing Base. At the Effective Date, the Borrowing Base
shall be as described in the definition of "Borrowing Base" at Section 1
above.

     (b)   Subsequent Determinations of Borrowing Base.  Subsequent
determinations of the Borrowing Base shall be made by the Banks at least
semi-annually on October 1 and April 1 of each year beginning October 1, 2002
or as Unscheduled Redeterminations.  In connection with, and as of, each
determination of the Borrowing Base, the Banks shall also redetermine the
Monthly Commitment Reduction.  The Borrowers shall furnish to the Banks as
soon as possible but in any event no later than September 1 of each year,
beginning September 1, 2002 with an effective date of July 1, 2002, with an
engineering report in form and substance satisfactory to the Agent prepared by
an independent petroleum engineering firm acceptable to Agent covering the Oil
and Gas Properties based on a present worth value discounted at ten percent
utilizing economic and pricing parameters used by Agent as established from
time to time, together with such other information concerning the value of the
Oil and Gas Properties as the Agent shall deem necessary to determine the
value of the Oil and Gas Properties.  By March 1 of each year, or within
thirty (30) days after either (i) receipt of notice from Agent that the Banks
require an Unscheduled Redetermination, or (ii) a Borrower gives notice to
Agent of its desire to have an Unscheduled Redetermination performed, the
Borrowers shall furnish to the Banks an engineering report in form and
substance satisfactory to Agent prepared by Borrowers' in-house engineering
staff valuing the Oil and Gas Properties utilizing economic and pricing
parameters used by the Agent as established from time to time, together with
such other information, reports and data concerning the value of the Oil and
Gas Properties as Agent shall deem reasonably necessary to determine the value
of such Oil and Gas Properties.  Agent shall by notice to the Borrowers no
later than October 1 and April 1 of each year, or within a reasonable time
thereafter (herein called the "Determination Date"), notify the Borrowers of
the designation by the Banks of the new Borrowing Base and Monthly Commitment
Reduction for the period beginning on such Determination Date and continuing
until, but not including, the next Determination Date.  If an Unscheduled
Redetermination is made by the Banks, the Agent shall notify the Borrowers
within a reasonable time after receipt of all requested information of the new
Borrowing Base and Monthly Commitment Reduction, and such new Borrowing Base
and Monthly Commitment Reduction shall continue until the next Determination
Date.  If the Borrowers do not furnish all such information, reports and data
by any date specified in this Section 5(b), the Banks may nonetheless
designate the Borrowing Base and Monthly Commitment Reduction at any amounts
which the Banks in their discretion determine and may redesignate the
Borrowing Base and Monthly Commitment Reduction from time to time thereafter
until the Banks receive all such information, reports and data, whereupon the
Banks shall designate a new Borrowing Base and Monthly Commitment Reduction as
described above.  Each Bank shall determine the amount of the Borrowing Base
and Monthly Commitment Reduction based upon the loan collateral value which
such Bank in its discretion (using such methodology, assumptions and discounts
rates as such Bank customarily uses in assigning collateral value to oil and
gas properties, oil and gas gathering systems, gas processing and plant
operations) assigns to such Oil and Gas Properties and other Collateral of the
Borrowers at the time in question and based upon such other credit factors
consistently applied (including, without limitation, the assets, liabilities,
cash flow, business, properties, prospects, management and ownership of the
Borrowers and their affiliates) as such Bank customarily considers in
evaluating similar oil and gas credits, but such Bank in its discretion shall
not be required to give any additional positive value to any Oil and Gas
Property over the current economic and pricing parameters used by such Bank
for such Determination Date which additional value is derived directly from a
hedging, forward sale or swap agreement covering such Oil and Gas Property as
of the date of such determination.  All determinations (scheduled or
unscheduled) of the Borrowing Base and the Monthly Commitment Reduction
require the approval of Majority Banks; provided, however, that
notwithstanding anything to the contrary herein, the amount of the Borrowing
Base may not be increased, nor may the Monthly Commitment Reduction be
reduced, without the approval of all Banks.  If the Banks cannot otherwise
agree on the Borrowing Base or the Monthly Commitment Reduction, each Bank
shall submit in writing to the Agent its proposed Borrowing Base and Monthly
Commitment Reduction and the Borrowing Base and Monthly Commitment Reduction
shall be set on the basis of the weighted average of the Borrowing Bases and
the weighted average of the Monthly Commitment Reductions proposed by the
Banks.  If at any time any of the Oil and Gas Properties are sold, the
Borrowing Base then in effect shall automatically be reduced by a sum equal to
the amount of prepayment required to be made pursuant to Section 10(q) hereof.
The Borrowing Base and Monthly Commitment Reduction shall be additionally
reduced from time to time pursuant to the provisions of Sections 2(e) and 2(f)
hereof.  It is expressly understood that the Banks have no obligation to
designate the Borrowing Base or the Monthly Commitment Reduction at any
particular amounts, except in the exercise of their discretion, whether in
relation to the Revolving Commitment or otherwise.  Provided, however, that
the Banks shall not have the obligation to designate a Borrowing Base in an
amount in excess of the Revolving Commitment or its legal or internal lending
limits.

6.   Fees.

     (a)   Commitment Fee.  The Borrowers shall pay to Agent for the ratable
benefit of the Banks the Commitment Fee (calculated on a daily basis).  The
Commitment Fee shall be payable at closing.

     (b)   The Letter of Credit Fee.  The Borrowers shall pay to the Agent the
Letter of Credit fees required above in Section 2(d).

7.   Prepayments.

     (a)   Voluntary Prepayments.  Subject to the provisions of Section 2(e)
hereof, the Borrowers may at any time and from time to time, without penalty
or premium, prepay the Notes, in whole or in part.

     (b)   Mandatory Prepayment For Borrowing Base Deficiency.  In the event
the Total Outstandings ever exceed the Borrowing Base as determined by Banks
pursuant to Section 5(b) hereof, the Borrowers shall, within thirty (30) days
after notification from the Agent, either (A) by instruments reasonably
satisfactory in form and substance to the Bank, provide the Agent with
collateral with value and quality in amounts satisfactory to all of the Banks
in their discretion in order to increase the Borrowing Base by an amount at
least equal to such excess, or (B) prepay, without premium or penalty, the
principal amount of the Revolving Notes in an amount at least equal to such
excess plus accrued interest thereon to the date of prepayment.  If the Total
Outstandings ever exceed the Revolving Commitment as a result of a Monthly
Commitment Reduction or any other required reduction in the Revolving
Commitment, then in such event, Borrowers shall immediately prepay the
principal amount of the Revolving Notes in an amount at least equal to such
excess plus accrued interest to the date of prepayment.

8.   Representations and Warranties.  In order to induce the Banks to enter
into this Agreement, the Borrowers hereby, jointly and severally, represent
and warrant to the Banks (which representations and warranties will survive
the delivery of the Notes) that:

     (a)   Creation and Existence.  The Borrowers are each a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction in which it was formed and is duly qualified in all jurisdictions
wherein failure to qualify may result in a Material Adverse Effect.  Borrowers
each have all power and authority to own its properties and assets and to
transact the business in which it is engaged.

     (b)   Power and Authority.  Borrowers are each duly authorized and
empowered to create and issue the Notes; and Borrowers are duly authorized and
empowered to execute, deliver and perform their respective Loan Documents,
including this Agreement; and all corporate action on each Borrower's part
requisite for the due creation and issuance of the Notes and for the due
execution, delivery and performance of the Loan Documents, including this
Agreement, has been duly and effectively taken.

     (c)   Binding Obligations.  This Agreement does, and the Notes and other
Loan Documents upon their creation, issuance, execution and delivery will,
constitute valid and binding obligations of Borrowers, enforceable in
accordance with their respective terms (except that enforcement may be subject
to applicable principles of equity and the effect of any applicable
bankruptcy, insolvency, or similar debtor relief laws now or hereafter in
effect and relating to or affecting the enforcement of creditors' rights
generally).

     (d)   No Legal Bar or Resultant Lien.  The Notes and the Loan Documents,
including this Agreement, do not and will not, to the best of each Borrower's
knowledge violate any provisions of any contract, agreement, law, regulation,
order, injunction, judgment, decree or writ to which any Borrower is subject
which could reasonably be expected to have a Material Adverse Effect, or
result in the creation or imposition of any lien or other encumbrance upon any
assets or properties of any Borrower, other than those contemplated by this
Agreement.

     (e)   No Consent.  The execution, delivery and performance by the
Borrowers of the Notes and by the Borrowers of their respective Loan
Documents, including this Agreement, do not require the consent or approval of
any other person or entity, including without limitation any regulatory
authority or governmental body of the United States or any state thereof or
any political subdivision of the United States or any state thereof except for
consents required for federal, state and, in some instances, private leases,
right of ways and other conveyances or encumbrances of oil and gas leases, if
any, all of which consents have been obtained by the Borrowers.

     (f)   Financial Condition.  The audited Financial Statements of Borrowers
dated June 30, 2001 (for the fiscal year there ended) and the unaudited
Financial Statements of Borrowers dated as of March 31, 2002, which have been
delivered to Banks are complete and correct in all material respects, and
fully and accurately reflect in all material respects the financial condition
and results of the operations of Borrowers on a separate basis as of the date
or dates and for the period or periods stated.  With the exception of those
changes resulting from that certain Purchase and Sale Agreement dated as of
December 31, 2001, as amended, by and between Borrowers, as purchasers, and
Castle Energy Corporation, Castle Exploration Company, Inc., CEC, Inc., and
Castle Pipeline Company ("Purchase and Sale Agreement"), no change has since
occurred in the condition, financial or otherwise, of any Borrower which is
reasonably expected to have a Material Adverse Effect, except as disclosed to
the Banks in Schedule "2" attached hereto.

     (g)   Liabilities.  No Borrower has any material (individually or in the
aggregate) liability, direct or contingent, except as disclosed to the Banks
in the Financial Statements or on Schedule "3" attached hereto.  No unusual or
unduly burdensome restrictions, restraint, or hazard exists by contract, law
or governmental regulation or otherwise relative to the business, assets or
properties of Borrowers which is reasonably expected to have a Material
Adverse Effect.

     (h)   Litigation.  Except as described in the Financial Statements, or as
otherwise disclosed to the Banks in Schedule "4" attached hereto, there is no
litigation, legal or administrative proceeding, investigation or other action
of any nature pending or, to the knowledge of the officers of Borrowers
threatened against or affecting Borrowers which involves the possibility of
any judgment or liability not fully covered by insurance, and which is
reasonably expected to have a Material Adverse Effect.

     (i)   Taxes; Governmental Charges.  Borrowers have each filed all tax
returns and reports required to be filed and has paid all taxes, assessments,
fees and other governmental charges levied upon them or their assets,
properties or income which are due and payable, including interest and
penalties, the failure of which to pay could reasonably be expected to have a
Material Adverse Effect, except such as are being contested in good faith by
appropriate proceedings and for which adequate reserves for the payment
thereof as required by GAAP has been provided and levy and execution thereon
have been stayed and continue to be stayed.

     (j)   Titles, Etc.  Borrowers each have defensible title to all of its
respective assets, including without limitation, the Oil and Gas Properties
containing a Net Revenue Interest and Working Interest not materially
different from those interests set forth on Exhibit F attached hereto, free
and clear of all liens or other encumbrances except Permitted Liens.

     (k)   Defaults.  No Borrower is in default and no event or circumstance
has occurred which, but for the passage of time or the giving of notice, or
both, would constitute a default under any loan or credit agreement,
indenture, mortgage, deed of trust, security agreement or other agreement or
instrument to which any Borrower is a party in any respect that would be
reasonably expected to have a Material Adverse Effect.  No Event of Default
hereunder has occurred and is continuing.

     (l)   Casualties; Taking of Properties.  Since the dates of the latest
Financial Statements of the Borrowers delivered to Banks, neither the business
nor the assets or properties of Borrowers have been affected (to the extent it
is reasonably likely to cause a Material Adverse Effect), as a result of any
fire, explosion, earthquake, flood, drought, windstorm, accident, strike or
other labor disturbance, embargo, requisition or taking of property or
cancellation of contracts, permits or concessions by any domestic or foreign
government or any agency thereof, riot, activities of armed forces or acts of
God or of any public enemy.

     (m)   Use of Proceeds; Margin Stock.  The proceeds of the Revolving
Commitment may be used by the Borrowers for the purposes of (i) financing the
Plan of Combination, (ii) refinancing existing Debt, and (iii) general
corporate purposes.  Neither Borrower is engaged principally or as one of its
important activities in the business of extending credit for the purpose of
purchasing or carrying any "margin stock " as defined in Regulation U of the
Board of Governors of the Federal Reserve System (12 C.F.R. Part 221), or for
the purpose of reducing or retiring any indebtedness which was originally
incurred to purchase or carry a margin stock or for any other purpose which
might constitute this transaction a "purpose credit" within the meaning of
said Regulation G or U.

     No Borrower nor any person or entity acting on behalf of any Borrower has
taken or will take any action which might cause the loans hereunder or any of
the Loan Documents, including this Agreement, to violate Regulation G or U or
any other regulation of the Board of Governors of the Federal Reserve System
or to violate the Securities Exchange Act of 1934 or any rule or regulation
thereunder, in each case as now in effect or as the same may hereafter be in
effect.

     (n)   Location of Business and Offices.  The principal place of business
and chief executive offices of the Borrowers are located at the address stated
in Section 15 hereof.

     (o)   Compliance with the Law.  To the best of each Borrower's knowledge,
no Borrower:

           (i)     is in violation of any law, judgment, decree, order,
ordinance, or governmental rule or regulation to which any Borrower, or any of
its assets or properties are subject; or

           (ii)     has failed to obtain any license, permit, franchise or
other governmental authorization necessary to the ownership of any of its
assets or properties or the conduct of its business;

which violation or failure is reasonably expected to have a Material Adverse
Effect.
     (p)   No Material Misstatements.  No information, exhibit or report
furnished by Borrowers to the Banks in connection with the negotiation of this
Agreement contained any material misstatement of fact or omitted to state a
material fact or any fact necessary to make the statement contained therein
not materially misleading.

     (q)   ERISA.  Borrowers are each in compliance in all material respects
with the applicable provisions of ERISA, and no "reportable event", as such
term is defined in Section 403 of ERISA, has occurred with respect to any Plan
of Borrowers.

     (r)   Public Utility Holding Company Act.  No Borrower is a "holding
company", or "subsidiary company" of a "holding company", or an "affiliate" of
a "holding company" or of a "subsidiary company" of a "holding company", or a
"public utility" within the meaning of the Public Utility Holding Company Act
of 1935, as amended.

     (s)   Subsidiaries.  All of the Borrowers' Subsidiaries are listed on
Schedule "5" hereto.

     (t)   Environmental Matters.  Except as disclosed on Schedule "6", no
Borrower (i) has received notice or otherwise learned of any Environmental
Liability which would be reasonably likely to individually or in the aggregate
have a Material Adverse Effect arising in connection with (A) any
non-compliance with or violation of the requirements of any Environmental Law
or (B) the release or threatened release of any toxic or hazardous waste into
the environment, (ii) has received notice of any threatened or actual
liability in connection with the release or notice of any threatened release
of any toxic or hazardous waste into the environment which would be reasonably
likely to individually or in the aggregate have a Material Adverse Effect or
(iii) has received notice or otherwise learned of any federal or state
investigation evaluating whether any remedial action is needed to respond to a
release or threatened release of any toxic or hazardous waste into the
environment for which either Borrower is or may be liable which may reasonably
be expected to result in a Material Adverse Effect.

     (u)   Liens.  Except (i) as disclosed on Schedule "1" hereto and (ii) for
Permitted Liens, the assets and properties of the Borrowers are free and clear
of all liens and encumbrances.

     (v)   Gas Contracts.  Except as described on Schedule "7" hereto, the
Borrowers (a) are not obligated in any material respect by virtue of any
prepayment made under any contract containing a "take-or-pay,", "recoupment,"
or "prepayment" provision or under any similar agreement to deliver
hydrocarbons produced from or allocated to any of the Oil and Gas Properties
at some future date without receiving full payment therefor at the time of
delivery, and (b) has not produced gas, in any material amount, subject to,
and is not, nor are any of the Oil and Gas Properties, subject to balancing
rights of third parties or subject to balancing duties under governmental
requirements, except as to such matters for which the Borrowers have
established monetary reserves adequate in an amount to satisfy such
obligations and has segregated such reserves from other accounts or the
Borrowers' balancing obligations in the aggregate would not reasonably be
expected to have a Material Adverse Effect.

     (w)   Kaiser-Francis Agreement.  It is Borrowers' understanding that
Kaiser-Francis Oil Company's sole recourse for repayment of that certain loan
to Delta Petroleum Corporation dated December 1, 1999 is to the properties
described in the documentation describing such loan.

9.   Conditions of Lending.

     (a)   The effectiveness of this Agreement, and the obligation to make the
initial Advance or issue any initial Letter of Credit under the Revolving
Commitment shall be subject to satisfaction of the following conditions
precedent:

          (i)     Execution and Delivery.  The Borrowers shall each have
executed and delivered the Agreement, the Notes and other required Loan
Documents, and the other Security Instruments, all in form and substance
satisfactory to the Agent;

          (ii)     Legal Opinion.  The Agent shall have received from
Borrowers' legal counsel a favorable legal opinion in form and substance
satisfactory to it and its counsel;

          (iii)     Resolutions, Consents or Authorizations.  The Agent shall
have received appropriate certified corporate resolutions of the Borrowers;

          (iv)     Good Standing.  The Agent shall have received evidence of
existence and good standing for Borrowers;

          (v)     Incumbency.  The Agent shall have received a signed
certificate of the secretary or assistant secretary of the Borrowers,
certifying the names of the officers of Borrowers authorized to sign loan
documents on behalf of Borrowers, together with the true signatures of each
such officer.  The Agent may conclusively rely on such certificate until the
Agent receives a further certificate of Borrowers canceling or amending the
prior certificate and submitting signatures of the officers named in such
further certificate;

          (vi)     Certificate of Incorporation and Bylaws.  The Agent shall
have received copies of the Certificate of Incorporation and all amendments
thereto, certified by the Secretary of State of the State of its
incorporation, and a copy of the bylaws and all amendments thereto, certified
by the Secretary or Assistant Secretary of such Borrowers as being true,
correct and complete;

          (vii)     Priority of Liens. The Agent shall have received
satisfactory evidence of the first lien status of the Liens granted by
Borrowers to the Banks;

          (viii)     Letters in Lieu .  The Agent shall have received undated
letters in lieu of transfer orders, in form and substance satisfactory to the
Agent, from the Borrowers to each purchaser of hydrocarbons and disburser of
proceeds of hydrocarbons from and attributable to the Oil and Gas Properties,
together with additional letters with the addresses left blank, authorizing
and directing the addressees to make future payments attributable to the
hydrocarbons from the Oil and Gas Properties directly to the Agent for the
benefit of the Banks, all as required by Section 4 hereof;

          (ix)     Certificate Regarding Solvency.  The Agent shall have
received a Certificate substantially in the form of Exhibit E attached hereto
from the Comptroller or Chief Financial Officer of each Borrower.

          (x)     Payment of Fees.  The Agent shall have received payment of
all fees due from Borrowers as of the Effective Date.

          (xi)     Representation and Warranties.  The representations and
warranties of Borrowers under this Agreement are true and correct in all
material respects as of such date, as if then made (except to the extent that
such representations and warranties related solely to an earlier date);

          (xii)     No Event of Default.  No Event of Default shall have
occurred and be continuing nor shall any event have occurred or failed to
occur which, with the passage of time or service of notice, or both, would
constitute an Event of Default hereunder under the Previous Loan Documents or
under any other material financing obligations;

          (xiii)     Other Documents.  Agent shall have received such other
instruments and documents incidental and appropriate to the transaction
provided for herein as Agent or its counsel may reasonably request, and all
such documents shall be in form and substance reasonably satisfactory to the
Agent;

          (xiv)     Legal Matters Satisfactory.  All legal matters incident to
the consummation of the transactions contemplated hereby shall be reasonably
satisfactory to special counsel for Agent retained at the expense of the
Borrowers;

          (xv)     Litigation.  There shall be in existence no injunction or
restraining order which, in the reasonable judgment of Agent or its counsel,
which prohibit the making of the Revolving Loans, nor shall there be pending
or threatened litigation which would be reasonably expected to result in a
Material Adverse Effect on Borrowers or their Subsidiaries.

          (xvi)     Due Diligence.  Agent shall have completed its due
diligence, and shall be satisfied with the results, of its investigation of
Borrowers.

          (xvii)     Initial Engineering Report.  Agent shall have received
satisfactory engineering reports on their Oil and Gas Properties.

          (xviii)     Regulations.  Borrowers shall be in compliance with all
applicable requirements of Regulations U, T, and X of the Board of Governors
of the Federal Reserve System.

          (xix)     Tipperary Sale.  Borrowers shall have provided Bank with
evidence that it has closed its agreement to trade certain leases to Tipperary
Corporation in exchange for $700,000 plus $3,500,000 in proved, developed and
producing properties in West Texas.

          (xx)     Real Estate Sale.  Piper shall have provided Bank with
evidence that it has closed the sale of that certain office building located
in Fort Worth, Texas.

     (b)   The obligation of the Banks to make any Advance or issue any Letter
of Credit under the Revolving Commitment (including the initial Advance) shall
be subject to the following additional conditions precedent that, at the date
of making each such Advance and after giving effect thereto:

          (i)     Representation and Warranties.  The representations and
warranties of Borrowers under this Agreement are true and correct in all
material respects as of such date, as if then made (except to the extent that
such representations and warranties related solely to an earlier date);

          (ii)     No Event of Default.  No Event of Default shall have
occurred and be continuing nor shall any event have occurred or failed to
occur which, with the passage of time or service of notice, or both, would
constitute an Event of Default;

          (iii)     Other Documents.  Agent shall have received such other
instruments and documents incidental and appropriate to the transaction
provided for herein as Agent or its counsel may reasonably request, and all
such documents shall be in form and substance reasonably satisfactory to the
Agent; and

          (iv)     Legal Matters Satisfactory.  All legal matters incident to
the consummation of the transactions contemplated hereby shall be reasonably
satisfactory to special counsel for Agent retained at the expense of
Borrowers.

10.   Affirmative Covenants.  A deviation from the provisions of this Section
10 shall not constitute a Default or Event of Default under this Agreement if
such deviation is consented to in writing by the Majority Banks prior to the
date of deviation.  The Borrowers will at all times comply with the covenants
contained in this Section 10 from the date hereof and for so long as the
Revolving Commitment is in existence or any amount is owed to the Agent or the
Banks under this Agreement or the other Loan Documents.

     (a)   Financial Statements and Reports.  Borrowers shall promptly furnish
to the Agent from time to time upon request such information regarding the
business and affairs and financial condition of Borrowers, as the Agent may
reasonably request, and will furnish to the Agent:

          (i)     Annual Audited Financial Statements.  As soon as available,
and in any event within ninety (90) days after the close of each fiscal year
beginning with the fiscal year ended June 30, 2002, the annual, audited,
consolidated Financial Statements of Borrowers, prepared in accordance with
GAAP accompanied by an unqualified opinion rendered by an independent
accounting firm reasonably acceptable to the Agent;

          (ii)     Quarterly Financial Statements.  Beginning with quarter
ending September 30, 2002, as soon as available, and in any event within
forty-five (45) days after the end of the first three fiscal quarters of each
year, the quarterly unaudited consolidated Financial Statements of Borrowers
prepared in accordance with GAAP;

          (iii)     Report on Properties.  As soon as available and in any
event on or before March 1 and September 1 of each calendar year, and at such
other times as any Bank, in accordance with Section 5 hereof, may request, the
engineering reports required to be furnished to the Agent under such Section 5
on the Oil and Gas Properties;

          (iv)     Quarterly Production Reports.  Within forty-five (45) days
after the end of each quarter, a report setting forth for each month in the
quarter, in form and substance satisfactory to the Agent, indicating the
immediately preceding quarter's sales volume, sales revenues, production
taxes, operating expense and  net operating income from or attributable to the
Oil and Gas Properties, and any material gas balance liabilities of either
Borrower, with detailed calculations and worksheets, and, in the case of take
or pay or prepayment agreements during such quarter, provide copies of the
same, all in form and substance satisfactory to Agent;

          (v)     Additional Information.  Promptly upon request of the Agent
from time to time any additional financial information or other information
that the Agent may reasonably request.

All such reports, information, balance sheets and Financial Statements
referred to in Subsection 10(a) above shall be in such detail as the Agent may
reasonably request and shall be prepared in a manner consistent with the
Financial Statements.

     (b)   Certificates of Compliance.  Concurrently with the furnishing of
the annual audited Financial Statements pursuant to Subsection 10(a)(i) hereof
and the quarterly unaudited Financial Statements pursuant to Subsection
10(a)(ii) hereof for the months coinciding with the end of each calendar
quarter, Borrowers, will furnish or cause to be furnished to the Agent a
certificate in the form of Exhibit "C" attached hereto, signed by the
President of each Borrower, (i) stating that each Borrower has fulfilled in
all material respects its obligations under the Notes and the Loan Documents,
including this Agreement, and that all representations and warranties made
herein and therein continue (except to the extent they relate solely to an
earlier date) to be true and correct in all material respects (or specifying
the nature of any change), or if a Default has occurred, specifying the
Default and the nature and status thereof; (ii) to the extent requested from
time to time by the Agent, specifically affirming compliance of each Borrower
in all material respects with any of its representations (except to the extent
they relate solely to an earlier date) or obligations under said instruments;
(iii) setting forth the computation, in reasonable detail as of the end of
each period covered by such certificate, of compliance with Sections 11(b),
(c), (d), and (e) containing or accompanied by such financial or other
details, information and material as the Agent may reasonably request to
evidence such compliance.

     (c)   Taxes and Other Liens.  The Borrowers will pay and discharge
promptly all taxes, assessments and governmental charges or levies imposed
upon the Borrowers, or upon the income or any assets or property of Borrowers,
as well as all claims of any kind (including claims for labor, materials,
supplies and rent) which, if unpaid, might become a Lien or other encumbrance
upon any or all of the assets or property of Borrowers and which could
reasonably be expected to result in a Material Adverse Effect; provided,
however, that neither Borrower shall be required to pay any such tax,
assessment, charge, levy or claim if the amount, applicability or validity
thereof shall currently be contested in good faith by appropriate proceedings
diligently conducted, levy and execution thereon have been stayed and continue
to be stayed and if Borrowers shall have set up adequate reserves therefor, if
required, under GAAP.

     (d)   Compliance with Laws.  Borrowers will observe and comply, in all
material respects, with all applicable laws, statutes, codes, acts,
ordinances, orders, judgments, decrees, injunctions, rules, regulations,
orders and restrictions relating to environmental standards or controls or to
energy regulations of all federal, state, county, municipal and other
governments, departments, commissions, boards, agencies, courts, authorities,
officials and officers, domestic or foreign.

     (e)   Further Assurances.  Upon Agent's request, the Borrowers will cure
promptly any defects in the creation and issuance of the Notes and the
execution and delivery of the Notes and the Loan Documents, including this
Agreement.  The Borrowers at their sole expense will promptly execute and
deliver to Agent upon its reasonable request all such other and further
documents, agreements and instruments in compliance with or accomplishment of
the covenants and agreements in this Agreement, or to correct any omissions in
the Notes or more fully to state the obligations set out herein.

     (f)   Performance of Obligations.  The Borrowers will pay the Notes and
other obligations incurred by it hereunder according to the reading, tenor and
effect thereof and hereof; and Borrowers will do and perform every act and
discharge all of the obligations provided to be performed and discharged by
the Borrowers under the Loan Documents, including this Agreement, at the time
or times and in the manner specified.

     (g)   Insurance.  The Borrowers now maintain and will continue to
maintain insurance with financially sound and reputable insurers with respect
to its assets against such liabilities, fires, casualties, risks and
contingencies and in such types and amounts as is customary in the case of
persons engaged in the same or similar businesses and similarly situated.
Upon request of the Agent, the Borrowers will furnish or cause to be furnished
to the Agent from time to time a summary of the respective insurance coverage
of Borrowers in form and substance satisfactory to the Agent, and, if
requested, will furnish the Agent copies of the applicable policies.  Upon
demand by Agent any insurance policies covering any properties securing the
Obligations shall be endorsed (i) to provide that such policies may not be
canceled, reduced or affected in any manner for any reason without fifteen
(15) days prior notice to Agent, (ii) to provide for insurance against fire,
casualty and other hazards normally insured against, in the amount of the full
value (less a reasonable deductible not to exceed amounts customary in the
industry for similarly situated business and properties) of the property
insured, and (iii) to provide for such other matters as the Agent may
reasonably require.  Additionally, the Borrowers shall at all times maintain
adequate insurance with respect to all of its other assets and wells in
accordance with prudent business practices.

     (h)   Accounts and Records.  Borrowers will keep books, records and
accounts in which full, true and correct entries will be made of all dealings
or transactions in relation to its business and activities, prepared in a
manner consistent with prior years, subject to changes suggested by such
Borrowers' auditors.

     (i)   Right of Inspection.  Borrowers will permit any officer, employee
or agent of the Banks to examine Borrowers' books, records and accounts, and
take copies and extracts therefrom, all at such reasonable times during normal
business hours and as often as the Banks may reasonably request.  The Banks
will use best efforts to keep all  Confidential Information (as herein
defined) confidential and will not disclose or reveal the Confidential
Information or any part thereof other than (i) as required by law, and (ii) to
the Banks', and the Banks' subsidiaries', Affiliates, officers, employees,
legal counsel and regulatory authorities or advisors to whom it is necessary
to reveal such information for the purpose of effectuating the agreements and
undertakings specified herein or as otherwise required in connection with the
enforcement of the Banks' and the Agent's rights and remedies under the Notes,
this Agreement and the other Loan Documents.  As used herein, "Confidential
Information" means information about the Borrowers furnished by the Borrowers
to the Banks, but does not include information (i) which was publicly known,
or otherwise known to the Banks, at the time of the disclosure, (ii) which
subsequently becomes publicly known through no act or omission by the Banks,
or (iii) which otherwise becomes known to the Banks, other than through
disclosure by the Borrowers.

     (j)   Notice of Certain Events. The Borrowers shall immediately notify
the Agent if Borrowers learn of the occurrence of (i) any event which
constitutes a Default or Event of  Default together with a detailed statement
by Borrowers of the steps being taken to cure such Event of Default; (ii) any
legal, judicial or regulatory proceedings affecting Borrowers, or any of the
assets or properties of Borrowers which, if adversely determined, could
reasonably be expected to have a Material Adverse Effect; (iii) any dispute
between Borrowers and any governmental or regulatory body or any other Person
or entity which, if adversely determined, might reasonably be expected to
cause a Material Adverse Effect; (iv) any event or circumstance which requires
the prepayment, purchase or redemption of any outstanding public note issue,
whether issued prior or subsequent to the Effective Date, with a detailed
statement of steps being taken to cure such default or event of default under
such instruments, or (v) any other matter which in Borrowers' reasonable
opinion could have a Material Adverse Effect.

     (k)  ERISA Information and Compliance.  The Borrowers will promptly
furnish to the Agent immediately upon becoming aware of the occurrence of any
"reportable event", as such term is defined in Section 4043 of ERISA, or of
any "prohibited transaction", as such term is defined in Section 4975 of the
Internal Revenue Code of 1954, as amended, in connection with any Plan or any
trust created thereunder, a written notice signed by the chief financial
officer of Borrowers specifying the nature thereof, what action Borrowers are
taking or proposes to take with respect thereto, and, when known, any action
taken by the Internal Revenue Service with respect thereto.

    (l)   Environmental Reports and Notices.  The Borrowers will deliver to
the Agent (i) promptly upon its becoming available, one copy of each report
sent by Borrowers to any court, governmental agency or instrumentality
pursuant to any Environmental Law, (ii) notice, in writing, promptly upon
Borrowers' receipt of notice or otherwise learning of any claim, demand,
action, event, condition, report or investigation indicating any potential or
actual liability arising in connection with (x) the non-compliance with or
violation of the requirements of any Environmental Law which reasonably could
be expected to have a Material Adverse Effect; (y) the release or threatened
release of any toxic or hazardous waste into the environment which reasonably
could be expected to have a Material Adverse Effect or which release Borrower
would have a duty to report to any court or government agency or
instrumentality, or (iii) the existence of any Environmental Lien on any
properties or assets of Borrowers, and Borrowers shall immediately deliver a
copy of any such notice to Agent.

     (m)   Compliance and Maintenance.  The Borrowers will (i) observe and
comply in all material respects with all Environmental Laws (including, but
not limited to, "CERCLA") and all laws pertaining to ERISA; (ii) except as
provided in Subsections 10(o) and 10(p) below, maintain the Oil and Gas
Properties and other assets and properties in good and workable condition at
all times and make all repairs, replacements, additions, betterments and
improvements to the Oil and Gas Properties and other assets and properties as
are needed and proper so that the business carried on in connection therewith
may be conducted properly and efficiently at all times in the opinion of the
Borrowers exercised in good faith; (iii) take or cause to be taken whatever
actions are necessary or desirable to prevent an event or condition of default
by Borrowers under the provisions of any gas purchase or sales contract or any
other contract, agreement or lease comprising a part of the Oil and Gas
Properties or other collateral security hereunder which default could
reasonably be expected to result in a Material Adverse Effect; and (iv)
furnish Agent upon request evidence satisfactory to Agent that there are no
Liens on the Oil and Gas Properties, except  Permitted Liens.

     (n)   Operation of Properties.  Except as provided in Subsection 10(p)
and (q) below, the Borrowers will operate, or use reasonable efforts to cause
to be operated, all Oil and Gas Properties in a careful and efficient manner
in accordance with the practice of the industry and in compliance in all
material respects with all applicable laws, rules, and regulations, and in
compliance in all material respects with all applicable proration and
conservation laws of the jurisdiction in which the properties are situated,
and all applicable laws, rules, and regulations, of every other agency and
authority from time to time constituted to regulate the development and
operation of the properties and the production and sale of hydrocarbons and
other minerals therefrom; provided, however, that the Borrowers shall have the
right to contest in good faith by appropriate proceedings, the applicability
or lawfulness of any such law, rule or regulation and pending such contest may
defer compliance therewith, as long as such deferment shall not subject the
properties or any part thereof to foreclosure or loss.

     (o)   Compliance with Leases and Other Instruments.  The Borrowers will
pay or cause to be paid and discharged or establish adequate reserves to
secure the payment of all rentals, delay rentals, royalties, production
payment, and indebtedness required to be paid by Borrowers (or required to
keep unimpaired in all material respects the rights of Borrowers in the Oil
and Gas Properties) accruing under, and perform or cause to be performed in
all material respects each and every act, matter, or thing required of
Borrowers by each and all of the assignments, deeds, leases, subleases,
contracts, and agreements in any way relating to Borrowers or any of the Oil
and Gas Properties and do all other things necessary of Borrowers to keep
unimpaired in all material respects the rights of Borrowers thereunder and to
prevent the forfeiture thereof or default thereunder; provided, however, that
nothing in this Agreement shall be deemed to require Borrowers to perpetuate
or renew any oil and gas lease or other lease by payment of rental or delay
rental or by commencement or continuation of operations nor to prevent
Borrowers from abandoning or releasing any oil and gas lease or other lease or
well thereon when, in any of such events, in the opinion of Borrowers
exercised in good faith, it is not in the best interest of the Borrowers to
perpetuate the same.

     (p)   Certain Additional Assurances Regarding Maintenance and Operations
of Properties.  With respect to those Oil and Gas Properties which are being
operated by operators other than the Borrowers, the Borrowers shall not be
obligated to perform any undertakings contemplated by the covenants and
agreement contained in Subsections 10(o) or 10(p) hereof which are performable
only by such operators and are beyond the control of the Borrowers; however,
the Borrowers agree to promptly take all reasonable actions available under
any operating agreements or otherwise to bring about the performance of any
such material undertakings required to be performed thereunder.

     (q)   Sale of Certain Assets/Prepayment of Proceeds.  Except with respect
to sales permitted under Section 11(a)(ii)(C) hereof, the Borrowers will
immediately pay over to the Agent for the ratable benefit of the Banks as a
prepayment of principal on the Revolving Notes, an amount equal to 100% of the
Release Price received by Borrowers from the sale of any Oil and Gas
Properties, which sale has been approved in advance by the Majority Banks.
The term "Release Price" as used herein shall mean a price determined by the
Majority Banks in their discretion based upon the loan collateral value which
such Banks in their discretion (using such methodology, assumptions and
discounts rates as such Banks customarily use in assigning collateral value to
oil and gas properties, oil and gas gathering systems, gas processing and
plant operations) assign to such Oil and Gas Properties at the time in
question.  Any such prepayment of principal on the Revolving Notes required by
this Section 10(q), shall not be in lieu of, but shall be in addition to, any
Monthly Commitment Reduction or any mandatory prepayment of principal required
to be paid pursuant to Section 7(b) hereof.

     (r)   Title Matters.  Within ninety (90) days after the Effective Date
with respect to the Oil and Gas Properties listed on Schedule "8" hereto,
furnish Agent with title opinions and/or title information reasonably
satisfactory to Agent showing defensible title of the applicable Borrower to
such Oil and Gas Properties subject only to the Permitted Liens.  As to any
Oil and Gas Properties hereafter mortgaged to Agent, Borrowers will promptly
(but in no event more than thirty (30) days following such mortgaging),
furnish Agent with title opinions and/or title information reasonably
satisfactory to Agent covering a sufficient value of such Oil and Gas
Properties to maintain the required level of title coverage at 75% of the
Engineered Value of the total Oil and Gas Properties.  Said title information
shall show defensible title of the applicable Borrower to such Oil and Gas
Properties subject only to Permitted Liens.

     (s)   Curative Matters.  Within sixty (60) days after the Effective Date
with respect to matters listed on Schedule "9" and, thereafter, within sixty
(60) days after receipt by Borrowers from Agent or its counsel of written
notice of title defects the Agent reasonably requires to be cured, Borrowers
shall either (i) provide such curative information, in form and substance
satisfactory to Agent, or (ii) substitute Oil and Gas Properties of value and
quality satisfactory to the Agent for all of Oil and Gas Properties for which
such title curative was requested but upon which Borrowers elected not to
provide such title curative information, and, within sixty (60) days of such
substitution, provide title opinions or title information satisfactory to the
Agent covering the Oil and Gas Properties so substituted.

     (t)   Change of Principal Place of Business.  Borrowers shall give Agent
at least thirty (30) days prior written notice of its intention to move its
principal place of business from the address set forth in Section 15 hereof.

     (u)   Operating Accounts.  Borrowers shall establish and maintain with
Agent its operating accounts (the "Operating Accounts"), the maintenance of
each of which shall be subject to such rules and regulations as the Agent
shall from time to time specify.  Such Operating Accounts shall be the primary
oil and gas operating account of the Borrowers for the purpose of depositing
proceeds from oil and gas sales received from the Collateral and such accounts
shall be maintained with the Agent until all amounts due hereunder and under
the Notes have been paid in full.  The Borrowers hereby grant a security
interest to Banks in and to the Operating Accounts and all checks, drafts and
other items ever received by any Bank for deposit therein.  If any Event of
Default shall occur and be continuing, Agent shall have the immediate right,
without prior notice or demand, to take and apply against the Borrowers'
obligations hereunder any and all funds legally and beneficially owned by the
Borrowers then or thereafter on deposit in the Operating Accounts for the
ratable benefit of the Banks.  Borrowers shall not redirect the payment of
such proceeds of production without the consent of Agent.  The setoff rights
discussed above apply only to (i) each Borrower's separate depository
accounts, and (ii) each Borrower's separate funds in any combined revenue
distribution account.

     (v)   Additional Property.  Borrowers shall, within five (5) days after
receiving a written request thereof from Agent, execute and deliver, or cause
to be executed and delivered, such mortgages, deeds of trust, instruments,
security agreements, assignments, financing statements, and other documents,
as may be reasonably necessary in the opinion of Agent and Agent's counsel, to
grant Agent valid first mortgage liens and first, prior and perfected security
interests in and to additional Oil and Gas Properties of such value as Agent
shall deem necessary to provide additional security for full and prompt
payment of all amounts owed hereunder and under the Notes.  At Agent's option
and on request therefor, Borrowers will furnish Agent title opinions covering
such additional Oil and Gas Properties prepared by counsel not employed by
Borrowers (or such other evidence to Borrowers' ownership thereof and their
revenue interest therein or attributable thereto as Agent may reasonably
require), in form and substance satisfactory to Agent, subject only to title
defects approved by Agent.

     (w)   Letters In Lieu of Transfer Orders.  The Borrowers shall promptly
upon the reasonable request of the Agent, at any time and from time to time
and without limitation on the rights of Agent in accordance with Section 4(c)
hereof, execute such letters in lieu of transfer orders, in addition to the
letters signed by the Borrowers and delivered to the Agent in satisfaction of
the conditions set forth in Sections 4(c) and 9(a)(viii) hereof, as are
necessary or appropriate to transfer and deliver to the Agent for the benefit
of the Banks proceeds from or attributable to any Oil and Gas Property or
other Collateral; provided, however, that such letters shall only be delivered
to the addressees thereof in accordance with the provision of Section 4(c)
hereof.

     (x)   Division Orders.  The Borrowers shall within sixty (60) days of
closing and from time to time following the occurrence of any Event of Default
and without limitations on the rights of the Agent in accordance with Section
4(c) hereof, provide division orders on oil and gas properties mortgaged
hereunder and execute such division and/or transfer orders as are necessary or
appropriate to transfer and deliver to the Agent for the ratable benefit of
the Banks proceeds from the sale of hydrocarbon production from or
attributable to any Oil and Gas Property; provided, however, that the Banks
shall only send or deliver such division orders and/or transfer orders in
accordance with Section 4(c) hereof.

     (y)   Take or Pay Agreement.  The Borrowers shall, in connection with
their delivery of the engineering reports required by Sections 5 and 10
hereof, deliver to Agent copies of contracts or other agreements concerning
"take or pay" and "prepayment", and provide notice of all gas balance
liabilities of the Borrowers.

     (z)   Entity Existence.  With the exception of those actions permitted by
Section 11(d) below, each Borrower shall preserve and maintain its existence
as a corporation and all of its rights, privileges and franchises necessary or
desirable in the normal conduct of its business, and conduct its business in
an orderly and efficient manner consistent with good practices and in
accordance with all valid regulations and orders of any governmental
authority.

     (aa)   Payment of Debt.  Borrowers shall pay and discharge (i) all taxes,
assessments and governmental charges or levies imposed upon it or upon its
income or profits, or upon any property belonging to it, before delinquent,
(ii) all lawful claims (including claims for labor, materials and supplies),
which, if unpaid, might give rise to a Lien upon any of its property, and
(iii) all of its other indebtedness, except as prohibited hereunder; provided,
however, that Borrowers shall not be required to pay any such tax, assessment,
charge or levy if and so long as the amount, applicability or validity thereof
shall concurrently be contested in good faith by appropriate proceedings and
appropriate accruals and cash reserves therefor have been established in
accordance with generally accepted accounting principles.

     (bb)   Use of Proceeds.  Borrowers shall only use the proceeds to (i)
finance the acquisition of the assets set forth in the Purchase and Sale
Agreement and (ii) other general corporate or partnership purposes.

11.   Negative Covenants.  A deviation from the provisions of this Section 11
shall not constitute a Default or an Event of Default under this Agreement if
such deviation is consented to in writing by the Majority Banks prior to the
date of deviation.  The Borrowers will at all times comply with the covenants
contained in this Section 11 from the date hereof and for so long as the
Revolving Commitment is in existence or any amount is owed to the Agent or the
Banks under this Agreement or the other Loan Documents.

     (a)   Negative Pledge.  Neither Borrowers nor any of their subsidiaries
shall, without the prior written consent of the Majority Banks:

           (i)     create, incur, assume or permit to exist any Lien, security
interest or other encumbrance on any of its assets or properties except
Permitted Liens; or

           (ii)     sell, lease, transfer or otherwise dispose of, in any
fiscal year, any of its oil and gas assets except for (A) sales of production
from Borrowers' Oil and Gas Properties made in the ordinary course of
Borrowers' oil and gas businesses, (B) sales made with the consent of Majority
Banks hereof; and (C) sales, leases or transfers or other dispositions of Oil
and Gas Properties made by Borrowers during any fiscal year, in one or any
series of transactions, the aggregate value of which does not exceed
$100,000.00 between consecutive Determination Dates if, and only if, such
sale, lease, transfer or other disposition does not result in the occurrence
of a Default or Event of Default.  Further, Neither Borrowers nor any of their
Subsidiaries shall, without the prior written consent of Majority Banks, sell,
lease, transfer or otherwise dispose of any oil and gas assets to any other
Borrower or Subsidiary unless such disposition is permitted by Section 11(d).

     (b)   Current Ratio. Borrowers shall not allow their ratio of
consolidated Current Assets to consolidated Current Liabilities to be less
than 1.0 to 1.0 as of the end of any fiscal quarter.

     (c)   Minimum Debt Service Coverage Ratio.  Borrowers will not allow
their consolidated Debt Service Coverage Ratio to ever be less than 1.20 to
1.0 for any quarterly fiscal period.

     (d)   Consolidations and Mergers.  No Borrower will consolidate or merge
with or into any other Person, except that any Borrower may (i) merge with
another Person if such Borrower is the surviving entity in such merger and if,
after giving effect thereto, no Default or Event of Default shall have
occurred and be continuing; or (ii) after prior notification is sent to Agent,
merge or consolidate into any other Borrower.

     (e)   Debts, Guaranties and Other Obligations.  Without the consent of
Majority Banks, no Borrower will incur, create, assume or in any manner become
or be liable in respect of any indebtedness (including Letters of Credit other
than those Letters of Credit permitted hereunder) in excess of $100,000.00 in
the aggregate for all Borrowers, nor will any Borrower guarantee or otherwise
in any manner become or be liable in respect of any indebtedness, liabilities
or other obligations of any other person or entity, whether by agreement to
purchase the indebtedness of any other person or entity or agreement for the
furnishing of funds to any other person or entity through the purchase or
lease of goods, supplies or services (or by way of stock purchase, capital
contribution, advance or loan) for the purpose of paying or discharging the
indebtedness of any other person or entity, or otherwise, except that the
foregoing restrictions shall not apply to:

           (i)     the Notes and any renewal or increase thereof, or other
indebtedness of the Borrowers heretofore disclosed to Banks in the Borrowers'
Financial Statements or on Schedule "3" hereto; or

           (ii)     taxes, assessments or other government charges which are
not yet due or are being contested in good faith by appropriate action
promptly initiated and diligently conducted, if such reserve as shall be
required by GAAP shall have been made therefor and levy and execution thereon
have been stayed and continue to be stayed; or

           (iii)     indebtedness (other than in connection with a loan or
lending transaction) incurred in the ordinary course of business, including,
but not limited to indebtedness for drilling, completing, leasing and
reworking oil and gas wells or the treatment, distribution, transportation of
sale of production therefrom;

           (iv)     any renewals or extensions of (but not increases in) any
of the foregoing; or

           (v)     indebtedness to other Borrowers.

     (f)   Dividends or Distributions.  No Borrower will declare, pay or make,
whether in cash or property, or set aside or apply any money or assets to pay
or make any dividend or distribution during any fiscal year.

     (g)   Loans and Advances.  No Borrower shall make or permit to remain
outstanding any loans or advances made by any Borrower to or in any person or
entity, except that the foregoing restriction shall not apply to:

           (i)     loans or advances to any person, the material details of
which have been set forth in the Financial Statements of the Borrowers
heretofore furnished to Banks; or

           (ii)     advances made in the ordinary course of Borrowers' oil and
gas business; or

           (iii)     loans or advances among Borrowers.

     (h)   Sale or Discount of Receivables.  No Borrower will discount or sell
with recourse, or sell for less than the greater of the face or market value
thereof, any of its notes receivable or accounts receivable.

     (i)   Nature of Business.  No Borrower will permit any material change to
be made in the character of its business as carried on at the date hereof.

     (j)   Transactions with Affiliates.  No Borrower will enter into any
transaction with any Affiliate (other than another Borrower), except
transactions upon terms that are no less favorable to it than would be
obtained in a transaction negotiated at arm's length with an unrelated third
party.

     (k)   Hedging Transactions.  No Borrower will enter into any transaction
providing (i) for the hedging, forward sale, swap or any derivative thereof of
crude oil or natural gas or other commodities, or (ii) for a swap, collar,
floor, cap, option, corridor, or other contract which is intended to reduce or
eliminate the risk of fluctuation in interest rates, as such terms are
referred to in the capital markets, except the foregoing prohibitions shall
not apply to (x) transactions consented to in writing by the Majority Banks
which are on terms acceptable to the Majority Banks, or (y) Pre-Approved
Contracts.  The term "Pre-Approved Contracts" as used herein shall mean any
contract or agreement (i) to hedge, forward sell or swap crude oil or natural
gas or otherwise sell up to 75% of the Borrowers' monthly production forecast
for all of Borrowers' (A) proved and producing oil properties for the period
covered by the proposed hedging transaction, and (B) proved and producing gas
properties for the period covered by the proposed hedging transaction, (ii)
with a  term of eighteen (18) months or less, (iii) with "strike prices" per
barrel or MCF as applicable greater than the Agent's forecasted price in the
most recent engineering evaluation, and (iv) with counter-parties approved by
Agent.

     (l)   Investments.  No Borrower shall make any investments in any person
or entity, except such restriction shall not apply to:

            (i)     investments and direct obligations of the United States of
America or any agency thereof;

            (ii)     investments in certificates of deposit issued by the
Banks or certificates of deposit with maturities of less than one year, issued
by other commercial banks in the United States having capital and surplus in
excess of $500,000,000 and which have a senior unsecured debt rating of  A+ by
Standard & Poor's Ratings Group or A1 by Moody's Investors Service, Inc.; or

            (iii)     investments in insured money market funds or such
investment with maturities of less than ninety (90) days at other commercial
banks having capital and surplus in excess of $500,000,000 and which have a
senior unsecured debt rating of  A+ by Standard & Poor's Ratings Group or A1
by Moody's Investors Service, Inc.; or

            (iv)     investments in oil and gas properties; or

            (v)     investments in other Borrowers; provided such investments
shall not require a transfer of assets other than cash.

     (m)   Amendment to Articles of Incorporation or Bylaws.  No Borrower will
permit any amendment to, or any alteration of, its Articles of Incorporation
or Bylaws, which amendment or alteration could reasonably be expected to have
a Material Adverse Effect.

     (n)   Leases.  No Borrower will enter into or agree to enter into, any
rental or lease agreement resulting or which would result in aggregate rental
or lease payments of the Borrowers exceeding $100,000.00 in the aggregate in
any fiscal year of the Borrowers under all rental or lease agreements under
which any Borrower is a lessee of the property or assets covered thereby;
provided, however, that the foregoing restriction shall not apply to oil, gas
and mineral leases or permits or similar agreements entered into in the
ordinary course of business or orders of any governmental authority
adjudicating the rights or pooling the interests of the owners of oil and gas
properties or lease agreements in effect as of the date hereof.

     (o)   Accounts Payable.  No Borrower shall allow accounts payable to
become in excess of 120 days past due, from the date of invoice, except such
accounts payable as are being Contested in Good Faith.

     (p)   Issuance of Preferred Stock.  No Borrower shall issue any preferred
stock after the date hereof without the consent of the Majority Banks.  As of
the date hereof, Borrowers represent and warrant that none of them have any
preferred stock issued and outstanding.

     (q)   Change in Ownership or Structure.  No Borrower shall permit or
suffer to exist any change in a majority of its current board of director
membership or a change or amendment to its current corporate structure except
as set forth in Section 11(d).

     (r)   Prepayments.  Except as may be otherwise permitted herein,
Borrowers shall not directly or indirectly make any payments upon any Debt
other than regularly scheduled installments of principal and interest.

     (s)   Stock or Interest Repurchase.  Borrowers shall not repurchase nor
set aside any funds to repurchase any stock or partnership interests.

     (t)   Change in Management.  No Borrower shall not make, permit or suffer
to exist a Change in Management.

     (u)   Kaiser-Francis Agreement.  Borrower, Delta Petroleum Corporation,
shall not amend, modify or otherwise alter its Loan Agreement and related
documents with Kaiser-Francis Oil Company dated December 1, 1999 without
Bank's prior written consent which such consent shall not be unreasonably
withheld.

12.   Events of Default.  Any one or more of the following events shall be
considered an "Event of Default" as that term is used herein:

     (a)   The Borrowers shall fail to pay when due or declared due the
principal of, and/or the interest on, the Notes, or any fee or any other
indebtedness of the Borrowers incurred pursuant to this Agreement or any other
Loan Document and such failure to pay is not cured within three (3) days after
written notice of such failure is sent by Agent to Borrowers; or

     (b)   Any representation or warranty made by Borrowers under this
Agreement, or in any certificate or statement furnished or made to the Banks
pursuant hereto, or in connection herewith, or in connection with any document
furnished hereunder, shall prove to be untrue in any material respect as of
the date on which such representation or warranty is made (or deemed made), or
any representation, statement (including financial statements), certificate,
report or other data furnished or to be furnished or made by Borrowers under
any Loan Document, including this Agreement, proves to have been untrue in any
material respect, as of the date as of which the facts therein set forth were
stated or certified; or

     (c)   Default shall be made in the due observance or performance of any
of the covenants or agreements of the Borrowers contained in the Loan
Documents (any such default under a Security Instrument other than failure to
pay must be such as would have a Material Adverse Effect), including this
Agreement, and such default shall continue for more than thirty (30) days
after notice thereof from Agent to Borrowers; or

     (d)   Default shall be made in the due observance or performance of the
covenants of Borrowers contained in Section 11 of this Agreement; or

     (e)   Default shall be made in respect of any obligation for borrowed
money in excess of $100,000.00, other than the Notes, for which Borrowers are
liable (directly, by assumption, as guarantor or otherwise), or any
obligations secured by any mortgage, pledge or other security interest, lien,
charge or encumbrance with respect thereto, on any asset or property of
Borrowers in respect of any agreement relating to any such obligations unless
Borrowers are not liable for same (i.e., unless remedies or recourse for
failure to pay such obligations is limited to foreclosure of the collateral
security therefor), and if such default shall continue for more than thirty
(30) days after notice thereof from Agent to Borrowers; or

     (f)   Borrowers shall commence a voluntary case or other proceedings
seeking liquidation, reorganization or other relief with respect to itself or
its debts under any bankruptcy, insolvency or other similar law now or
hereafter in effect or seeking an appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any substantial part
of its property, or shall consent to any such relief or to the appointment of
or taking possession by any such official in an involuntary case or other
proceeding commenced against it, or shall make a general assignment for the
benefit of creditors, or shall fail generally to pay its debts as they become
due, or shall take any corporate action authorizing the foregoing; or

     (g)   An involuntary case or other proceeding, shall be commenced against
Borrowers seeking liquidation, reorganization or other relief with respect to
it or its debts under any bankruptcy, insolvency or similar law now or
hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any substantial part
of its property, and such involuntary case or other proceeding shall remain
undismissed and unstayed for a period of sixty (60) days; or an order for
relief shall be entered against Borrowers under the federal bankruptcy laws as
now or hereinafter in effect; or

     (h)   A final judgment or judgments or order for the payment of money in
excess of $100,000 during any one (1) fiscal year in the aggregate shall be
rendered against Borrowers and such judgments or orders shall continue
unsatisfied and unstayed for a period of thirty (30) days; or

     (i)   In the event the Total Outstandings shall at any time exceed the
Borrowing Base established for the Revolving Notes, and the Borrowers shall
fail to comply with the provisions of Section 7(b) hereof; or

     (j)   A Change of Management shall occur; or

     (k)   Any Security Instrument shall for any reason not, or cease to,
create valid and perfected first-priority Liens against the Collateral
purportedly covered thereby and such occurrence would have a Material Adverse
Effect; or

     Upon occurrence of any Event of Default specified above and after the
expiration of any cure period provided in Section 12(a)   (k) above, the
entire principal amount due under the Notes and all interest then accrued
thereon, and any other liabilities of the Borrowers hereunder, shall become
immediately due and payable all without notice and without presentment,
demand, protest, notice of protest or dishonor or any other notice of default
of any kind, all of which are hereby expressly waived by the Borrowers.  In
any other Event of Default, the Agent, upon request of Majority Banks, shall
by notice to the Borrowers declare the principal of, and all interest then
accrued on, the Notes and any other liabilities hereunder to be forthwith due
and payable, whereupon the same shall forthwith become due and payable without
presentment, demand, protest, notice of intent to accelerate, notice of
acceleration or other notice of any kind, all of which the Borrowers hereby
expressly waive, anything contained herein or in the Note to the contrary
notwithstanding.  Nothing contained in this Section 14 shall be construed to
limit or amend in any way the Events of Default enumerated in the Note, or any
other document executed in connection with the transaction contemplated
herein.

     Upon the occurrence and during the continuance of any Event of Default
beyond any cure period provided above, the Banks are hereby authorized at any
time and from time to time, without notice to the Borrowers (any such notice
being expressly waived by the Borrowers), to set-off and apply any and all
deposits (general or special, time or demand, provisional or final) at any
time held and other indebtedness at any time owing by any of the Banks to or
for the credit or the account of the Borrowers against any and all of the
indebtedness of the Borrowers under the Notes and the Loan Documents,
including this Agreement, irrespective of whether or not the Banks shall have
made any demand under the Loan Documents, including this Agreement or the
Notes and although such indebtedness may be unmatured.  Any amount set-off by
any of the Banks shall be applied against the indebtedness owed the Banks by
the Borrowers pursuant to this Agreement and the Notes.  The Banks agree
promptly to notify the Borrowers after any such setoff and application,
provided that the failure to give such notice shall not affect the validity of
such set-off and application.  The rights of the Bank under this Section are
in addition to other rights and remedies (including, without limitation, other
rights of set-off) which the Banks may have.

     The setoff rights discussed above apply only to (i) each Borrower's
separate depository accounts and (ii) each Borrower's separate funds in any
combined revenue distribution accounts.

     Upon the occurrence of and during the continuance of any Event of
Default, Borrower shall not service its obligations described in its loan
agreement with Kaiser-Francis Oil Company from proceeds of the collateral
securing this Loan including, but not limited to, Oil and Gas Properties or
any operating fees related thereto.
13.   The Agent and the Banks.

     (a)   Appointment and Authorization.  Each Bank hereby appoints Agent as
its nominee and agent, in its name and on its behalf: (i) to act as nominee
for and on behalf of such Bank in and under all Loan Documents; (ii) to
arrange the means whereby the funds of Banks are to be made available to the
Borrowers under the Loan Documents; (iii) to take such action as may be
requested by any Bank under the Loan Documents (when such Bank is entitled to
make such request under the Loan Documents); (iv) to receive all documents and
items to be furnished to Banks under the Loan Documents; (v) to be the secured
party, mortgagee, beneficiary, and similar party in respect of, and to
receive, as the case may be, any collateral for the benefit of Banks; (vi) to
promptly distribute to each Bank all material information, requests, documents
and items received from the Borrowers under the Loan Documents; (vii) to
promptly distribute to each Bank such Bank's Pro Rata Part of each payment or
prepayment (whether voluntary, as proceeds of insurance thereon, or otherwise)
in accordance with the terms of the Loan Documents and (viii) to deliver to
the appropriate Persons requests, demands, approvals and consents received
from Banks.  Each Bank hereby authorizes Agent to take all actions and to
exercise such powers under the Loan Documents as are specifically delegated to
Agent by the terms hereof or thereof, together with all other powers
reasonably incidental thereto.  With respect to its commitments hereunder and
the Notes issued to it, Agent and any successor Agent shall have the same
rights under the Loan Documents as any other Bank and may exercise the same as
though it were not the Agent; and the term "Bank" or "Banks" shall, unless
otherwise expressly indicated, include Agent and any successor Agent in its
capacity as a Bank.  Agent and any successor Agent and its Affiliates may
accept deposits from, lend money to, act as trustee under indentures of and
generally engage in any kind of business with the Borrowers, and any person
which may do business with the Borrowers, all as if Agent and any successor
Agent was not Agent hereunder and without any duty to account therefor to the
Banks; provided that, if any payments in respect of any property (or the
proceeds thereof) now or hereafter in the possession or control of Agent which
may be or become security for the obligations of the Borrowers arising under
the Loan Documents by reason of the general description of indebtedness
secured or of property contained in any other agreements, documents or
instruments related to any such other business shall be applied to reduction
of the obligations of the Borrowers arising under the Loan Documents, then
each Bank shall be entitled to share in such application according to its pro
rata part thereof.  Each Bank, upon request of any other Bank, shall disclose
to all other Banks all indebtedness and liabilities, direct and contingent, of
the Borrowers to such Bank as of the time of such request.

     (b)   Note Holders.  From time to time as other Banks become a party to
this Agreement, Agent shall obtain execution by the Borrowers of additional
Notes in amounts representing the Commitment of each such new Bank, up to an
aggregate face amount of all Revolving Notes not exceeding $20,000,000.00.
The obligation of such Bank shall be governed by the provisions of this
Agreement, including but not limited to, the obligations specified in Section
2 hereof.  From time to time, Agent may require that the Banks exchange their
Notes for newly issued Notes to better reflect the Revolving Commitments of
the Banks.  Agent may treat the payee of any Note as the holder thereof until
written notice of transfer has been filed with it, signed by such payee and in
form satisfactory to Agent.

     (c)   Consultation with Counsel.  Banks agree that Agent may consult with
legal counsel selected by Agent and shall not be liable for any action taken
or suffered in good faith by it in accordance with the advice of such counsel.

     (d)   Documents.  Agent shall not be under a duty to examine or pass upon
the validity, effectiveness, enforceability, genuineness or value of any of
the Loan Documents or any other instrument or document furnished pursuant
thereto or in connection therewith, and Agent shall be entitled to assume that
the same are valid, effective, enforceable and genuine and what they purport
to be.

     (e)   Resignation or Removal of Agent.  Subject to the appointment and
acceptance of a successor Agent as provided below, Agent may resign at any
time by giving written notice thereof to Banks and the Borrowers, and Agent
may be removed at any time with or without cause by all Banks.  If no
successor Agent has been so appointed by all Banks (and approved by the
Borrowers) and has accepted such appointment within 30 days after the retiring
Agent's giving of notice of resignation or removal of the retiring Agent, then
the retiring Agent may, on behalf of Banks, appoint a successor Agent.  Any
successor Agent must be approved by Borrowers, which approval will not be
unreasonably withheld.  Upon the acceptance of any appointment as Agent
hereunder by a successor Agent, such successor Agent shall thereupon succeed
to and become vested with all the rights and duties of the retiring Agent, and
the retiring Agent, shall be discharged from its duties and obligations
hereunder.  After any retiring Agent's resignation or removal hereunder as
Agent, the provisions of this Section 13 shall continue in effect for its
benefit in respect to any actions taken or omitted to be taken by it while it
was acting as Agent.  To be eligible to be an Agent hereunder the party
serving, or to serve, in such capacity must own a Pro Rata Part of the
Revolving Commitments equal to the level of Revolving Commitment required to
be held by any Bank pursuant to Section 26 hereof.

     (f)   Responsibility of Agent.  Agent agrees to act, subject to the
express conditions contained in this Section 13, in substantially the same
manner that it would act in dealing with a loan held for its own account.  It
is expressly understood and agreed that the obligations of Agent under the
Loan Documents are only those expressly set forth in the Loan Documents and
that Agent shall be entitled to assume that no Default or Event of Default has
occurred and is continuing, unless Agent has actual knowledge of such fact or
has received notice from a Bank or the Borrowers that such Bank or the
Borrowers considers that a Default or an Event of Default has occurred and is
continuing and specifying the nature thereof.  Neither Agent nor any of its
directors, officers, attorneys or employees shall be liable for any action
taken or omitted to be taken by them under or in connection with the Loan
Documents, except for its or their own gross negligence or willful misconduct.
Agent shall not incur liability under or in respect of any of the Loan
Documents by acting upon any notice, consent, certificate, warranty or other
paper or instrument believed by it to be genuine or authentic or to be signed
by the proper party or parties, or with respect to anything which it may do or
refrain from doing in the reasonable exercise of its judgment, or which may
seem to it to be necessary or desirable.

     Agent shall not be responsible to Banks for any of the Borrowers'
recitals, statements, representations or warranties contained in any of the
Loan Documents, or in any certificate or other document referred to or
provided for in, or received by any Bank under, the Loan Documents, or for the
value, validity, effectiveness, genuineness, enforceability or sufficiency of
or any of the Loan Documents or for any failure by the Borrowers to perform
any of its obligations hereunder or thereunder.  Agent may employ agents and
attorneys-in-fact and shall not be answerable, except as to money or
securities received by it or its authorized agents, for the negligence or
misconduct of any such agents or attorneys-in-fact selected by it with
reasonable care.

     The relationship between Agent and each Bank is only that of agent and
principal and has no fiduciary aspects.  Nothing in the Loan Documents or
elsewhere shall be construed to impose on Agent any duties or responsibilities
other than those for which express provision is therein made.  In performing
its duties and functions hereunder, Agent does not assume and shall not be
deemed to have assumed, and hereby expressly disclaims, any obligation or
responsibility toward or any relationship of agency or trust with or for the
Borrower or any of its beneficiaries or other creditors.  As to any matters
not expressly provided for by the Loan Documents, Agent shall not be required
to exercise any discretion or take any action, but shall be required to act or
to refrain from acting (and shall be fully protected in so acting or
refraining from acting) upon the instructions of all Banks and such
instructions shall be binding upon all Banks and all holders of the Notes;
provided, however, that Agent shall not be required to take any action which
is contrary to the Loan Documents or applicable law.

     Agent shall have the right to exercise or refrain from exercising,
without notice or liability to the Banks, any and all rights afforded to Agent
by the Loan Documents or which Agent may have as a matter of law; provided,
however, Agent shall not (i) except as provided in Section 5(b) hereof,
without the consent of Majority Banks designate the amount of the Borrowing
Base or the Monthly Commitment Reduction or (ii) without the consent of all
Banks, take any other action with regard to amending the Loan Documents,
waiving any default under the Loan Documents or taking any other action with
respect to the Loan Documents which requires consent of all Banks.  Provided
further, however, that no amendment, waiver, or other action shall be effected
pursuant to the preceding clause (ii) without the consent of all Banks which:
(i) would increase the Borrowing Base or decrease the Monthly Commitment
Reduction, (ii) would reduce any fees hereunder, or the principal of, or the
interest on, any Bank's Note or Notes, (iii) would postpone any date fixed for
any payment of any fees hereunder, or any principal or interest of any Bank's
Note or Notes, (iv) would materially increase any Bank's obligations hereunder
or would materially alter Agent's obligations to any Bank hereunder, (v) would
release Borrowers from their obligation to pay any Bank's Note or Notes, (vi)
release any of the Collateral, (vii) would change the definition of Majority
Banks, (viii) would amend, modify or change any provision of this Agreement
requiring the consent of all the Banks, (ix) would waive any of the conditions
precedent to the Effective Date or the making of any Loan or issuance of any
Letter of Credit or (x) would extend the Maturity Date or (xi) would amend
this sentence or the previous sentence.  Agent shall not have liability to
Banks for failure or delay in exercising any right or power possessed by Agent
pursuant to the Loan Documents or otherwise unless such failure or delay is
caused by the gross negligence of the Agent, in which case only the Agent
responsible for such gross negligence shall have liability therefor to the
Banks.

     (g)   Independent Investigation.  Each Bank severally represents and
warrants to Agent that it has made its own independent investigation and
assessment of the financial condition and affairs of the Borrowers in
connection with the making and continuation of its participation hereunder and
has not relied exclusively on any information provided to such Bank by Agent
in connection herewith, and each Bank represents, warrants and undertakes to
Agent that it shall continue to make its own independent appraisal of the
credit worthiness of the Borrowers while the Notes are outstanding or its
commitments hereunder are in force.  Agent shall not be required to keep
itself informed as to the performance or observance by the Borrowers of this
Agreement or any other document referred to or provided for herein or to
inspect the properties or books of the Borrowers.  Other than as provided in
this Agreement, Agent shall not have any duty, responsibility or liability to
provide any Bank with any credit or other information concerning the affairs,
financial condition or business of the Borrowers which may come into the
possession of Agent.

     (h)   Indemnification. Banks agree to indemnify Agent, ratably according
to their respective Commitments on a Pro Rata basis, from and against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any proper and reasonable kind or
nature whatsoever which may be imposed on, incurred by or asserted against
Agent in any way relating to or arising out of the Loan Documents or any
action taken or omitted by Agent under the Loan Documents, provided that no
Bank shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from Agent's gross negligence or willful misconduct.
Each Bank shall be entitled to be reimbursed by the Agent for any amount such
Bank paid to Agent under this Section 13(h) to the extent the Agent has been
reimbursed for such payments by the Borrowers or any other Person.  The
parties intend for the provisions of this Section to apply to and protect the
Agent from the consequences of any liability including strict liability
imposed or threatened to be imposed on Agent as well as from the consequences
of its own negligence, whether or not that negligence is the sole,
contributing or concurring cause of any such liability.

     (i)   Benefit of Section 13.  The agreements contained in this Section 13
are solely for the benefit of Agent and the Banks and are not for the benefit
of, or to be relied upon by, the Borrowers, any affiliate of the Borrowers or
any other person.

     (j)   Pro Rata Treatment.  Subject to the provisions of this Agreement,
each payment (including each prepayment) by the Borrowers and collection by
Banks (including offsets) on account of the principal of and interest on the
Notes and fees provided for in this Agreement, payable by the Borrowers shall
be made Pro Rata; provided, however, in the event that any Defaulting Bank
shall have failed to make an Advance as contemplated under Section 3 hereof
and Agent or another Bank or Banks shall have made such Advance, payment
received by Agent for the account of such Defaulting Bank or Banks shall not
be distributed to such Defaulting Bank or Banks until such Advance or Advances
shall have been repaid in full to the Bank or Banks who funded such Advance or
Advances.  Provided, further, in the event that any Defaulting Bank shall have
failed to make an Advance as contemplated under Section 3 hereof and no other
Bank or Agent makes such Advance it, and only it, shall not be entitled to
receive its Pro Rata portion of any Non-Use Fee accruing during, and only
during, that period of time during which it remains a Defaulting Bank.

     (k)   Assumption as to Payments.  Except as specifically provided herein,
unless Agent shall have received notice from the Borrowers prior to the date
on which any payment is due to Banks hereunder that the Borrowers will not
make such payment in full, Agent may, but shall not be required to, assume
that the Borrowers have made such payment in full to Agent on such date and
Agent may, in reliance upon such assumption, cause to be distributed to each
Bank on such due date an amount equal to the amount then due such Bank.  If
and to the extent the Borrowers shall not have so made such payment in full to
Agent, each Bank shall repay to Agent forthwith on demand such amount
distributed to such Bank together with interest thereon, for each day from the
date such amount is distributed to such Bank until the date such Bank repays
such amount to Agent, at an interest rate equal to the overnight federal funds
rate.

     (l)   Other Financings.  Without limiting the rights to which any Bank
otherwise is or may become entitled, such Bank shall have no interest, by
virtue of this Agreement or the Loan Documents, in (a) any present or future
loans from, letters of credit issued by, or leasing or other financial
transactions by, any other Bank to, on behalf of, or with the Borrowers
(collectively referred to herein as "Other Financings") other than the
obligations hereunder; (b) any present or future guarantees by or for the
account of the Borrowers which are not contemplated by the Loan Documents; (c)
any present or future property taken as security for any such Other
Financings; or (d) any property now or hereafter in the possession or control
of any other Bank which may be or become security for the obligations of the
Borrowers arising under any loan document by reason of the general description
of indebtedness secured or property contained in any other agreements,
documents or instruments relating to any such Other Financings.

     (m)   Interests of Banks.  Nothing in this Agreement shall be construed
to create a partnership or joint venture between Banks for any purpose.
Agent, Banks and the Borrowers recognize that the respective obligations of
Banks under the Revolving Commitment shall be several and not joint and that
neither Agent nor any of Banks shall be responsible or liable to perform any
of the obligations of the other under this Agreement.  Each Bank is deemed to
be the owner of an undivided interest in and to all rights, titles, benefits
and interests belonging and accruing to Agent under the Security Instruments,
including, without limitation, liens and security interests in any collateral,
fees and payments of principal and interest by the Borrowers under the
Revolving Commitment on a Pro Rata basis.  Each Bank shall perform all duties
and obligations of Banks under this Agreement in the same proportion as its
ownership interest in the Loans outstanding at the date of determination
thereof.

     (n)   Investments.  Whenever Agent in good faith determines that it is
uncertain about how to distribute to Banks any funds which it has received, or
whenever Agent in good faith determines that there is any dispute among the
Banks about how such funds should be distributed, Agent may choose to defer
distribution of the funds which are the subject of such uncertainty or
dispute.  If Agent in good faith believes that the uncertainty or dispute will
not be promptly resolved, or if Agent is otherwise required to invest funds
pending distribution to the Banks, Agent may invest such funds only in
obligations secured by the United States government pending distribution (at
the risk of the Borrowers).  All interest on any such investment shall be
distributed upon the distribution of such investment and in the same
proportions and to the same Persons as such investment.  All monies received
by Agent for distribution to the Banks (other than to the Person who is Agent
in its separate capacity as a Bank) shall be held by the Agent pending such
distribution solely as Agent for such Banks, and Agent shall have no equitable
title to any portion thereof.

14.   Exercise of Rights.  No failure to exercise, and no delay in exercising,
on the part of the Agent or the Banks, any right hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise thereof preclude any
other or further exercise thereof or the exercise of any other right.  The
rights of the Agent and the Banks hereunder shall be in addition to all other
rights provided by law.  No modification or waiver of any provision of the
Loan Documents, including this Agreement, or the Note nor consent to departure
therefrom, shall be effective unless in writing, and no such consent or waiver
shall extend beyond the particular case and purpose involved.  No notice or
demand given in any case shall constitute a waiver of the right to take other
action in the same, similar or other circumstances without such notice or
demand.

15.   Notices.  Any notices or other communications required or permitted to
be given by this Agreement or any other documents and instruments referred to
herein must be given in writing (which may be by facsimile transmission) and
must be personally delivered or mailed by prepaid certified or registered mail
to the party to whom such notice or communication is directed at the address
of such party as follows:  (a) BORROWERS: c/o DELTA PETROLEUM CORPORATION, 475
17th Street, Suite 1400, Denver, Colorado 80202, Facsimile No.: 303/298-8251,
Attention:  Roger Parker;  (b) AGENT: BANK OF OKLAHOMA, N.A., 201 Robert S.
Kerr Ave., Oklahoma City, Oklahoma, 73102,  Attention:  Steve Ramsey.  Any
such notice or other communication shall be deemed to have been given (whether
actually received or not) on the day it is personally delivered or delivered
by facsimile as aforesaid or, if mailed, on the third day after it is mailed
as aforesaid.  Any party may change its address for purposes of this Agreement
by giving notice of such change to the other party pursuant to this Section
15.  Any notice required to be given to the Banks shall be given to the Agent
and distributed to all Banks by the Agent.

16.   Expenses.  The Borrowers shall pay (i) all reasonable and necessary
out-of-pocket expenses of the Banks which are not Defaulting Banks, including
reasonable fees and disbursements of special counsel for the Agent, in
connection with the preparation of this Agreement, any waiver or consent
hereunder or any amendment hereof or any default or Event of Default or
alleged default or Event of Default hereunder, (ii) all reasonable and
necessary out-of-pocket expenses of the Agent, including reasonable fees and
disbursements of special counsel for the Agent in connection with the
preparation of any participation agreement for a participant or participants
requested by the Borrowers or any amendment thereof and (iii) if a Default or
an Event of Default occurs, all reasonable and necessary out-of-pocket
expenses incurred by the Banks, including reasonable fees and disbursements of
counsel, in connection with such Default and Event of Default and collection
and other enforcement proceedings resulting therefrom.  The Borrowers shall
indemnify the Banks against any transfer taxes, document taxes, assessments or
charges made by any governmental authority by reason of the execution,
delivery and filing of the Loan Documents.  The obligations of this Section 16
shall survive any termination of this Agreement, the expiration of the Loans
and the payment of all indebtedness of the Borrowers to the Banks hereunder
and under the Notes.

17.   Indemnity.  The Borrowers agree to indemnify and hold harmless the Banks
and their respective officers, employees, agents, attorneys and
representatives (singularly, an "Indemnified Party", and collectively, the
"Indemnified Parties") from and against any loss, cost, liability, damage or
expense (including the reasonable fees and out-of-pocket expenses of counsel
to the Banks, including all local counsel hired by such counsel) ("Claim")
incurred by the Banks in investigating or preparing for, defending against, or
providing evidence, producing documents or taking any other action in respect
of any commenced or threatened litigation, administrative proceeding or
investigation under any federal securities law, federal or state environmental
law, or any other statute of any jurisdiction, or any regulation, or at common
law or otherwise, which is alleged to arise out of or is based upon any acts,
practices or omissions or alleged acts, practices or omissions of the
Borrowers or their agents or arises in connection with the duties, obligations
or performance of the Indemnified Parties in negotiating, preparing,
executing, accepting, keeping, completing, countersigning, issuing, selling,
delivering, releasing, assigning, handling, certifying, processing or
receiving or taking any other action with respect to the Loan Documents and
all documents, items and materials contemplated thereby even if any of the
foregoing arises out of an Indemnified Party's ordinary negligence.  The
indemnity set forth herein shall be in addition to any other obligations or
liabilities of the Borrowers to the Banks hereunder or at common law or
otherwise, and shall survive any termination of this Agreement, the expiration
of the Loans and the payment of all indebtedness of the Borrowers to the Banks
hereunder and under the Notes, provided that the Borrowers shall have no
obligation under this Section to the Bank with respect to any of the foregoing
arising out of the gross negligence or willful misconduct of the Bank.  If any
Claim is asserted against any Indemnified Party, the Indemnified Party shall
endeavor to notify the Borrowers of such Claim (but failure to do so shall not
affect the indemnification herein made except to the extent of the actual harm
caused by such failure).  The Indemnified Party shall have the right to
employ, at the Borrowers' expense, counsel of the Indemnified Parties'
choosing and to control the defense of the Claim.  The Borrowers may at their
own expense also participate in the defense of any Claim.  Each Indemnified
Party may employ separate counsel in connection with any Claim to the extent
such Indemnified Party believes it reasonably prudent to protect such
Indemnified Party.  The parties intend for the provisions of this Section to
apply to and protect each Indemnified Party from the consequences of any
liability including strict liability imposed or threatened to be imposed on
Agent as well as from the consequences of its own negligence, whether or not
that negligence is the sole, contributing, or concurring cause of any Claim.

18.   Governing Law.  THIS AGREEMENT IS BEING EXECUTED AND DELIVERED, AND IS
INTENDED TO BE PERFORMED, IN OKLAHOMA, OKLAHOMA COUNTY, OKLAHOMA, AND THE
SUBSTANTIVE LAWS OF OKLAHOMA SHALL GOVERN THE VALIDITY, CONSTRUCTION,
ENFORCEMENT AND INTERPRETATION OF THIS AGREEMENT AND ALL OTHER DOCUMENTS AND
INSTRUMENTS REFERRED TO HEREIN, UNLESS OTHERWISE SPECIFIED THEREIN.

19.   Invalid Provisions.  If any provision of this Agreement is held to be
illegal, invalid, or unenforceable under present or future laws effective
during the term of this Agreement, such provisions shall be fully severable
and this Agreement shall be construed and enforced as if such illegal, invalid
or unenforceable provision had never comprised a part of this Agreement, and
the remaining provisions of the Agreement shall remain in full force and
effect and shall not be affected by the illegal, invalid or unenforceable
provision or by its severance from this Agreement.

20.   Maximum Interest Rate.  It is the intention of the parties hereto to
comply strictly with any applicable usury laws as in effect from time to time
and, in this regard, there shall never be taken, received, contracted for,
collected, charged or received on any sums advanced hereunder interest in
excess of that which would accrue at the Maximum Rate.

     If, under any circumstances, the aggregate amounts paid on the Notes or
under this Agreement or any other Loan Document include amounts which by law
are deemed interest and which would exceed the amount permitted if the Maximum
Rate were in effect, the Borrowers stipulate that such payment and collection
will have been and will be deemed to have been, to the fullest extent
permitted by applicable laws of the State of Oklahoma or the United States of
America, the result of mathematical error on the part of the Borrowers and the
Agent; and the Agent shall promptly credit the amount of such excess to the
principal amount due on the Notes, or if the principal amount due on the Notes
shall have been paid in full, refund the amount of such excess to the
Borrowers (to the extent only of such interest payments in excess of that
which would have accrued and been payable on the basis of the Maximum Rate)
upon discovery of such error by the Agent or notice thereof from the
Borrowers.

     If the maturity of the Notes is accelerated by reason of an election of
the Agent resulting from any Event of Default or otherwise in accordance with
this Agreement, or in the event any prepayment, then such consideration that
constitutes interest under applicable laws may never include amounts which are
more than the Maximum Rate, and the amount of such excess, if any, provided
for in this Agreement or otherwise shall be canceled automatically by the
Agent as of the date of such acceleration or prepayment and, if theretofore
paid, shall be credited by the Agent on the principal amount due on the Notes,
or if the principal amount due on the Notes shall have been paid in full,
refunded by the Agent to the Borrowers.

     All sums paid, or agreed to be paid, to the Agent for the use,
forbearance and detention of the proceeds of any Advance hereunder shall, to
the extent permitted by applicable law, be amortized, prorated, allocated and
spread throughout the full term hereof until paid in full so that the actual
rate of interest is uniform but does not exceed the Maximum Rate throughout
the full term hereof.

21.   Amendments.  This Agreement may be amended only by an instrument in
writing executed by an authorized officer of the party against whom such
amendment is sought to be enforced.

22.   Multiple Counterparts.  This Agreement may be executed in a number of
identical separate counterparts, each of which for all purposes is to be
deemed an original, but all of which shall constitute, collectively, one
agreement.  No party to this Agreement shall be bound hereby until a
counterpart of this Agreement has been executed by all parties hereto.

23.   Conflict.  In the event any term or provision hereof is inconsistent
with or conflicts with any provision of the Loan Documents, the terms or
provisions contained in this Agreement shall be controlling.

24.   Survival.  All covenants, agreements, undertakings, representations and
warranties made in the Loan Documents, including this Agreement, the Notes or
other documents and instruments referred to herein shall survive all closings
hereunder and shall not be affected by any investigation made by any party.

25.   Parties Bound.  This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors, assigns, heirs,
legal representatives and estates, provided, however, that the Borrowers may
not, without the prior written consent of all of the Banks, assign any rights,
powers, duties or obligations hereunder.

26.   Assignments and Participations.

     (a)   Each Bank shall have the right to sell, assign or transfer all or
any part of its Note or Notes, its Commitments and its rights and obligations
hereunder to one or more Affiliates, Banks, financial institutions, pension
plans, insurance companies, investment funds, or similar Persons who are
Eligible Assignees or to a Federal Reserve Bank; provided, that in connection
with each sale, assignment or transfer (other than to an Affiliate, a Bank or
a Federal Reserve Bank), the applicable Bank will consider the opinion and
recommendation of Borrowers, which opinion and recommendation shall in no way
be binding upon such Bank, and each such sale, assignment, or transfer (other
than to an Affiliate, a Bank or a Federal Reserve Bank), shall require the
consent of Agent, which consent will not be unreasonably withheld, and the
assignee, transferee or recipient shall have, to the extent of such sale,
assignment, or transfer, the same rights, benefits and obligations as it would
if it were such Bank and a holder of such Note, Commitments and rights and
obligations, including, without limitation, the right to vote on decisions
requiring consent or approval of all Banks or Majority Banks and the
obligation to fund its Commitments; provided, further, that (1) each such
sale, assignment, or transfer (other than to an Affiliate, a Bank or a Federal
Reserve Bank) shall be in an aggregate principal amount not less than
$1,000,000.00, (2) each remaining Bank shall at all times maintain Commitments
then outstanding in an aggregate principal amount at least equal to
$6,000,000.00; (3) each such sale, assignment or transfer shall be of a Pro
Rata portion of such Bank's Revolving Commitment, (4) no Bank may offer to
sell its Note or Notes, Commitments, rights and obligations or interests
therein in violation of any securities laws; and (5) no such assignments
(other than to a Federal Reserve Bank) shall become effective until the
assigning Bank and its assignee delivers to Agent and Borrowers an Assignment
and Acceptance and the Note or Notes subject to such assignment and other
documents evidencing any such assignment.  An assignment fee in the amount of
$3,500 for each such assignment (other than to an Affiliate, a Bank or the
Federal Reserve Bank) will be payable to Agent by assignor or assignee.
Within five (5) Business Days after its receipt of copies of the Assignment
and Acceptance and the other documents relating thereto and the Note or Notes,
the Borrowers shall execute and deliver to Agent (for delivery to the relevant
assignee) a new Note or Notes evidencing such assignee's assigned Commitments
and if the assignor Bank has retained a portion of its Commitments, a
replacement Note in the principal amount of the Commitments retained by the
assignor (except as provided in the last sentence of this paragraph (a) such
Note or Notes to be in exchange for, but not in payment of, the Note or Notes
held by such Bank).  On and after the effective date of an assignment
hereunder, the assignee shall for all purposes be a Bank, party to this
Agreement and any other Loan Document executed by the Banks and shall have all
the rights and obligations of a Bank under the Loan Documents, to the same
extent as if it were an original party thereto, and no further consent or
action by Borrowers, Banks or the Agent shall be required to release the
transferor Bank with respect to its Commitments assigned to such assignee and
the transferor Bank shall henceforth be so released.

     (b)   Each Bank shall have the right to grant participations in all or
any part of such Bank's Notes and Commitments hereunder to one or more pension
plans, investment funds, insurance companies, financial institutions or other
Persons, provided, that:

           (i)     each Bank granting a participation shall retain the right
to vote hereunder, and no participant shall be entitled to vote hereunder on
decisions requiring consent or approval of Bank or Majority Banks (except as
set forth in (iii) below);

           (ii)     in the event any Bank grants a participation hereunder,
such Bank's obligations under the Loan Documents shall remain unchanged, such
Bank shall remain solely responsible to the other parties hereto for the
performance of such obligations, such Bank shall remain the holder of any such
Note or Notes for all purposes under the Loan Documents, and Agent, each Bank
and Borrowers shall be entitled to deal with the Bank granting a participation
in the same manner as if no participation had been granted; and

           (iii)     no participant shall ever have any right by reason of its
participation to exercise any of the rights of Banks hereunder, except that
any Bank may agree with any participant that such Bank will not, without the
consent of such participant (which consent may not be unreasonably withheld)
consent to any amendment or waiver requiring approval of all Banks.

     (c)   It is understood and agreed that any Bank may provide to assignees
and participants and prospective assignees and participants financial
information and reports and data concerning Borrowers' properties and
operations which was provided to such Bank pursuant to this Agreement.

     (d)   Upon the reasonable request of either Agent or Borrowers, each Bank
will identify those to whom it has assigned or participated any part of its
Notes and Commitment, and provide the amounts so assigned or participated.

27.   Choice of Forum: Consent to Service of Process and Jurisdiction.  THE
OBLIGATIONS OF BORROWERS UNDER THE LOAN DOCUMENTS ARE PERFORMABLE IN OKLAHOMA
COUNTY, OKLAHOMA.  ANY SUIT, ACTION OR PROCEEDING AGAINST THE BORROWERS WITH
RESPECT TO THE LOAN DOCUMENTS OR ANY JUDGMENT ENTERED BY ANY COURT IN RESPECT
THEREOF, MAY BE BROUGHT IN THE COURTS OF THE STATE OF OKLAHOMA, COUNTY OF
OKLAHOMA, OR IN THE UNITED STATES COURTS LOCATED IN OKLAHOMA COUNTY, OKLAHOMA
AND THE BORROWERS HEREBY SUBMIT TO THE NON-EXCLUSIVE JURISDICTION OF SUCH
COURTS FOR THE PURPOSE OF ANY SUCH SUIT, ACTION OR PROCEEDING.  THE BORROWERS
HEREBY IRREVOCABLY CONSENT TO SERVICE OF PROCESS IN ANY SUIT, ACTION OR
PROCEEDING IN SAID COURT BY THE MAILING THEREOF BY BANK BY REGISTERED OR
CERTIFIED MAIL, POSTAGE PREPAID, TO THE BORROWERS, AS APPLICABLE, AT THE
ADDRESS FOR NOTICES AS PROVIDED IN SECTION 15.  THE BORROWERS HEREBY
IRREVOCABLY WAIVE ANY OBJECTION WHICH THEY MAY NOW OR HEREAFTER HAVE TO THE
LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING
TO ANY LOAN DOCUMENT BROUGHT IN THE COURTS LOCATED IN THE STATE OF OKLAHOMA,
COUNTY OF OKLAHOMA, AND HEREBY FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT ANY
SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN
AN INCONVENIENT FORUM.

28.   Waiver of Jury Trial.  THE BORROWERS, THE AGENT AND THE BANKS (BY THEIR
ACCEPTANCE HEREOF) HEREBY VOLUNTARILY, KNOWINGLY, IRREVOCABLY AND
UNCONDITIONALLY WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY
DISPUTE (WHETHER BASED UPON CONTRACT, TORT OR OTHERWISE) BETWEEN OR AMONG THE
BORROWERS, THE AGENT AND THE BANKS, ARISING OUT OF OR IN ANY WAY RELATED TO
THIS DOCUMENT, THE NOTES, ANY OTHER RELATED DOCUMENT, OR ANY RELATIONSHIP
BETWEEN THE AGENT, THE BANKS AND THE BORROWERS.  THIS PROVISION IS A MATERIAL
INDUCEMENT TO THE AGENT AND THE BANKS TO PROVIDE THE FINANCING DESCRIBED
HEREIN.

29.   Other Agreements.  THIS WRITTEN CREDIT AGREEMENT REPRESENTS THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.  THERE
ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

30.   Financial Terms.  All accounting terms used in this Agreement which are
not specifically defined herein shall be defined in accordance with GAAP.

31.   Fraudulent Conveyance Savings Clause.  Notwithstanding any provision of
this Agreement to the contrary, it is intended that this Agreement shall not
constitute a "Fraudulent Conveyance" (as defined below) as to any Borrower.
Consequently, each Borrower agrees that if this Agreement would, but for the
application of this sentence, constitute a Fraudulent Conveyance as to any
such Borrower, the obligations of such Borrower under this Agreement shall be
valid and enforceable against such Borrower only to the maximum extent that
would not cause this Agreement to constitute a Fraudulent Conveyance as to
such Borrower, and this Agreement shall automatically be deemed to have been
amended accordingly at all relevant times.  For purposes hereof, a "Fraudulent
Conveyance" means a fraudulent conveyance under Section 548 of the Bankruptcy
Code (or any successor section) or a fraudulent conveyance or fraudulent
transfer under the provisions of any applicable fraudulent conveyance or
fraudulent transfer law or similar law of any state or other governmental
unit, as in effect from time to time.

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.

The remainder of this page has been intentionally left blank.

<PAGE>
                            BORROWERS:

                            DELTA PETROLEUM CORPORATION,
                            a Colorado corporation

                            /s/ Roger A. Parker
                            By:  Roger A. Parker
                            Title:  President and Chief Executive Officer
                            Address:
                            475 17th Street, Suite 1400
                            Denver, Colorado  80202
                            Telephone:  (303) 293-9133
                            Facsimile:  (303) 298-8251

                            DELTA EXPLORATION COMPANY, INC.,
                            a Colorado corporation


                            /s/ Roger A. Parker
                            By:  Roger A. Parker
                            Title:  President and Chief Executive Officer
                            Address:
                            475 17th Street, Suite 1400
                            Denver, Colorado  80202
                            Telephone:  (303) 293-9133
                            Facsimile:  (303) 298-8251

                            PIPER PETROLEUM COMPANY,
                            a Colorado corporation


                            /s/ Roger A. Parker
                            By:  Roger A. Parker
                            Title:  President and Chief Executive Officer
                            Address:
                            475 17th Street, Suite 1400
                            Denver, Colorado  80202
                            Telephone:  (303) 293-9133
                            Facsimile:  (303) 298-8251

<PAGE>
                            BANK:

                            BANK OF OKLAHOMA, N.A.,
                            a national banking association


                            /s/ Steve Ramsey
                            By:  Steve Ramsey
                            Title:  Vice President
                            Address:
                            201 Robert S. Kerr Ave.
                            Oklahoma City, Oklahoma 73102
                            Telephone: 405/272-2511
                            Facsimile: 405/272-2588

                            LOCAL OKLAHOMA BANK, N.A.,
                            a national banking association


                            /s/ John K. Slay, Jr.
                            By:  John K. Slay, Jr.
                            Title:   Senior Vice President
                            Address:  3601 N.W. 63rd
                            Oklahoma City, Oklahoma 73116
                            Telephone: 405/841-2179
                            Facsimile: 405/841-2175






















<PAGE>
                               CREDIT AGREEMENT

                                    Among

                          DELTA PETROLEUM CORPORATION;
                        DELTA EXPLORATION COMPANY, INC.;
                            PIPER PETROLEUM COMPANY

                                     And

                             BANK OF OKLAHOMA, N.A.

                                  May 31, 2002

















































Exhibits

Exhibit "A"     -     Notice of Borrowing
Exhibit "B"     -     Revolving Note
Exhibit "C"     -     Certificate of Compliance
Exhibit "D"     -     Form of Assignment and Acceptance Agreement
Exhibit "E"     -     Certificate Regarding Solvency

Schedules

Schedule 1      -     Liens
Schedule 2      -     Financial Condition
Schedule 3      -     Liabilities
Schedule 4      -     Litigation
Schedule 5      -     Subsidiaries
Schedule 6      -     Environmental Matters
Schedule 7      -     Gas Contract
Schedule 8      -     Title Matters
Schedule 9      -     Curative Matters
Schedule 10     -     Permitted Liens









































                                  EXHIBIT "A"

                              NOTICE OF BORROWING

     The undersigned hereby certifies that [he is/they are] the
____________________ of DELTA PETROLEUM CORPORATION and DELTA EXPLORATION
COMPANY, INC. and that as such [he is/they are] authorized to execute this
Notice of Borrowing on behalf of the Borrowers (as such term is defined in the
Agreement).  With reference to that certain Credit Agreement dated as of
May____, 2002 (as same may be amended, modified, increased, supplemented
and/or restated from time to time, the "Agreement") entered into by and
between Borrowers, BANK OF OKLAHOMA, N.A. ("BOK") and the financial
institutions party thereto (the "Banks"), the undersigned further certifies,
represents and warrants on behalf of the Borrowers that all of the foregoing
statements are true and correct (each capitalized term used herein having the
same meaning given to it in the Agreement unless otherwise specified):

     (a)     Borrowers [or any Borrower] request that the Banks advance
Borrowers [or any Borrower] on the Revolving Loan the aggregate sum of
$___________________ by no later than ________________________.  Immediately
following such Advance, the aggregate outstanding balance of Advances shall
equal $_______________ on the Revolving Loan.

     (b)     As of the date hereof, and as a result of the making of the
requested Advance, there does not and will not exist any Default or Event of
Default.

     (c)     Borrowers have performed and complied with all agreements and
conditions contained in the Agreement which are required to be performed or
complied with by Borrowers before or on the date hereof.

     (e)     The representations and warranties contained in the Agreement are
true and correct in all material respects as of the date hereof and shall be
true and correct upon the making of the Advance, with the same force and
effect as though made on and as of the date hereof and thereof.

     (f)     No change that would cause a Material Adverse Effect to the
condition, financial or otherwise, of Borrowers has occurred since the most
recent Financial Statement provided to the Banks.

EXECUTED AND DELIVERED this ____ day of May, 2002.

                                 DELTA PETROLEUM CORPORATION,
                                 an Oklahoma corporation

                                 _________________________________________
                                 By:     ______________________
                                 Title:  ______________________

                                 DELTA PETROLEUM CORPORATION,
                                 an Oklahoma corporation

                                 _________________________________________
                                 By:     ______________________
                                 Title:  ______________________







                                  EXHIBIT "B"

                                REVOLVING NOTE

$__________________                                 Oklahoma City, Oklahoma
                                                    May 31, 2002

     FOR VALUE RECEIVED, the undersigned DELTA PETROLEUM CORPORATION, a
Colorado corporation, DELTA EXPLORATION COMPANY, INC., a Colorado corporation,
and PIPER PETROLEUM COMPANY, a Colorado corporation (hereinafter collectively
referred to herein as the "Borrowers") hereby unconditionally, jointly and
severally, promise to pay to the order of ________________________ (the
"Bank") at the offices of ____________________ (the "Agent") in Oklahoma City,
Oklahoma, the principal sum of _____________________ and ____/100 DOLLARS
($___________________) or so much thereof as shall be advanced under the
provisions of the Credit Agreement (as defined herein), in lawful money of the
United States of America together with interest from the date hereof until
paid at the rates specified in the Credit Agreement.  All payments of
principal and interest due hereunder are payable at any office of Bank capable
of accepting loan payments, or at such other location as Bank shall designate
in writing to Borrowers.

     The principal and all accrued interest on this Note shall be due and
payable in accordance with the terms and provisions of the Credit Agreement
(defined below).

     This Note is executed pursuant to that certain Credit Agreement dated of
even date herewith between Borrowers, the Agent and Banks (the "Credit
Agreement"), and is one of the Notes referred to therein.  Reference is made
to the Credit Agreement and the Loan Documents (as that term is defined in the
Credit Agreement) for a statement of prepayment, rights and obligations of
Borrowers, for a statement of the terms and conditions under which the due
date of this Note may be accelerated and for statements regarding other
matters affecting this Note (including without limitation the obligations of
the holder hereof to advance funds hereunder, principal and interest payment
due dates, voluntary and mandatory prepayments, exercise of rights and
remedies, payment of attorneys' fees, court costs and other costs of
collection and certain waivers by Borrowers and others now or hereafter
obligated for payment of any sums due hereunder).  Upon the occurrence of an
Event of Default, as that term is defined in the Credit Agreement and Loan
Documents, and after the expiration of any cure period as set forth in the
Credit Agreement, the holder hereof (i) may declare forthwith to be entirely
and immediately due and payable the principal balance hereof and the interest
accrued hereon, and (ii) shall have all rights and remedies of the Bank under
the Credit Agreement and Loan Documents.  This Note may be prepaid in
accordance with the terms and provisions of the Credit Agreement.

     Regardless of any provision contained in this Note, the holder hereof
shall never be entitled to receive, collect or apply, as interest on this
Note, any amount in excess of the Maximum Rate (as such term is defined in the
Credit Agreement), and, if the holder hereof ever receives, collects, or
applies as interest, any such amount which would be excessive interest, it
shall be deemed a partial prepayment of principal and treated hereunder as
such; and, if the indebtedness evidenced hereby is paid in full, any remaining
excess shall forthwith be paid to Borrowers.  In determining whether or not
the interest paid or payable, under any specific contingency, exceeds the
Maximum Rate, Borrowers and the holder hereof shall, to the maximum extent
permitted under applicable law (i) characterize any non-principal payment as
an expense, fee or premium rather than as interest, (ii) exclude voluntary
prepayments and the effects thereof, and (iii) spread the total amount of
interest throughout the entire contemplated term of the obligations evidenced
by this Note and/or referred to in the Credit Agreement so that the interest
rate is uniform throughout the entire term of this Note; provided that, if
this Note is paid and performed in full prior to the end of the full
contemplated term thereof; and if the interest received for the actual period
of existence thereof exceeds the Maximum Rate, the holder hereof shall refund
to Borrowers the amount of such excess or credit the amount of such excess
against the indebtedness evidenced hereby, and, in such event, the holder
hereof shall not be subject to any penalties provided by any laws for
contracting for, charging, taking, reserving or receiving interest in excess
of the Maximum Rate.

     If any payment of principal or interest on this Note shall become due on
a day other than a Business Day (as such term is defined in the Credit
Agreement), such payment shall be made on the next succeeding Business Day and
such extension of time shall in such case be included in computing interest in
connection with such payment.

     If this Note is placed in the hands of an attorney for collection, or if
it is collected through any legal proceeding at law or in equity or in
bankruptcy, receivership or other court proceedings, Borrowers agree to pay
all costs of collection, including, but not limited to, court costs and
reasonable attorneys' fees.

     Borrowers and each surety, endorser, guarantor and other party ever
liable for payment of any sums of money payable on this Note, jointly and
severally waive presentment and demand for payment, notice of intention to
accelerate the maturity, protest, notice of protest and nonpayment, as to this
Note and as to each and all installments hereof, and agree that their
liability under this Note shall not be affected by any renewal or extension in
the time of payment hereof, or in any indulgences, or by any release or change
in any security for the payment of this Note, and hereby consent to any and
all renewals, extensions, indulgences, releases or changes.

     This Note shall be governed by and construed in accordance with the
applicable laws of the United States of America and the laws of the State of
Oklahoma.

     THIS WRITTEN NOTE, THE CREDIT AGREEMENT AND THE OTHER LOAN DOCUMENTS
REPRESENT THE FINAL AGREEMENTS BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED
BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES.  THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

     EXECUTED as of the date and year first above written.

     BORROWERS:               DELTA PETROLEUM CORPORATION,
                              an Colorado corporation


                              __________________________________________
                              By:     ____________________________
                              Title:  _______________________


                              DELTA EXPLORATION COMPANY, INC.,
                              an Colorado corporation


                              __________________________________________
                              By:     ____________________________
                              Title:  _______________________


                              PIPER PETROLEUM COMPANY,
                              a Colorado corporation



                              __________________________________________
                              By:     ____________________________
                              Title:  _______________________






















































                                  EXHIBIT "C"

                           CERTIFICATE OF COMPLIANCE

     The undersigned hereby certifies that [he is/they are] the
____________________ of DELTA PETROLEUM CORPORATION and DELTA EXPLORATION
COMPANY, INC., and that as such [he is/they are] authorized to execute this
Certificate of Compliance on behalf of the Borrowers.  With reference to that
certain Credit Agreement dated as of May ____, 2002 (as same may be amended,
modified, increased, supplemented and/or restated from time to time, the
"Agreement") entered into by and between Borrowers, BANK OF OKLAHOMA, N.A., as
"Agent" for itself and the Banks signatory thereto (the "Banks"), the
undersigned further certifies, represents and warrants on behalf of the
Borrowers and the Support Parties that all of the following statements are
true and correct (each capitalized term used herein having the same meaning
given to it in the Agreement unless otherwise specified):

     (a)     The Borrowers have fulfilled in all material respects their
obligations under the Notes and Security Instruments, including the Agreement,
and all representations and warranties made herein and therein continue
(except to the extent they relate solely to an earlier date) to be true and
correct in all material respects [if the representations and warranties are
not true and correct, the party signing this certificate shall except from the
foregoing statement the matters for which such representations and warranties
are no longer true specifying the nature of any such change.]

     (b)     No Event of Default has occurred under the Security Instruments,
including the Agreement [if an Event of Default has occurred, the party
certifying hereto shall specify the facts constituting the Event of Default
and the nature and status thereof].

     (c)     To the extent requested from time to time by the Agent, the
certifying party shall specifically affirm compliance of the Borrowers in all
material respects with any of its representations and warranties (except to
the extent they relate solely to an earlier date) or obligations under said
instruments.

     (d)     Financial Computations for the period ending
_____________________ (provide calculations on a consolidated basis):

             (i)     Current Ratio; and
             (ii)    Minimum Debt Service Coverage Ratio.

EXECUTED, DELIVERED AND CERTIFIED TO this ____ day of May, 2002.

                              DELTA PETROLEUM CORPORATION,
                              an Oklahoma corporation


                              __________________________________
                              By:     _____________________
                              Title:  _____________________

                              DELTA PETROLEUM CORPORATION,
                              an Oklahoma corporation


                              _________________________________________
                              By:     ______________________
                              Title:  ______________________


                                  EXHIBIT "D"

                      ASSIGNMENT AND ACCEPTANCE AGREEMENT

     This ASSIGNMENT AND ACCEPTANCE AGREEMENT (this "Assignment and
Acceptance") dated as of ____________________, 2002 is made between
________________________(the "Assignor") and _____________________ (the
"Assignee").

                                   RECITALS

     WHEREAS, the Assignor is party to that certain Credit Agreement dated as
of May____, 2002 (as extended, renewed, amended or restated from time to time,
the "Credit Agreement") by and among Delta Petroleum Corporation, Delta
Exploration Company, Inc., the Banks signatory thereto (the "Banks"), and Bank
Of Oklahoma, N.A., as Agent (in such capacity, the "Agent"), (unless otherwise
defined herein, capitalized terms used herein have the respective meanings
assigned to them in the Credit Agreement);

     WHEREAS, as provided under the Credit Agreement, the Assignor has
committed to make Loans (the "Committed Loans") to the Company in aggregate
amounts not to exceed (i) $_______________ on the Revolving Loan (the
"Revolving Commitment"), such Revolving Commitment being evidenced by a
Revolving Note in the face amount of $_______________ (the "Note"); the
Revolving Commitment is hereinafter referred to as (the "Commitment");

     WHEREAS, [the Assignor has made Committed Loans to the Company in the
aggregate principal amount of (i) $_______________ on the Revolving Commitment
[no Committed Loans are outstanding under the Credit Agreement]; and

     WHEREAS, the Assignor wishes to assign to the Assignee [part] [all] of
the rights and obligations of the Assignor under the Credit Agreement in
respect of its Commitment, in an amount equal to $_______________ on the
Revolving Commitment for a total of $_______________ for the total Commitment
(the "Assigned Amount") on the term and subject to the conditions set forth
herein and the Assignee wishes to accept assignment of such rights and assume
such obligations from the Assignor on such terms and subject to such
conditions;

     NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements contained herein, the parties hereto agree as follows:

     1.      Assignment and Acceptance.

     (a)     Subject to the term and conditions of this Assignment and
Acceptance, (i) the Assignor hereby sells, transfers and assigns to the
Assignee, and (ii) the Assignee hereby purchases, assigns and undertakes from
the Assignor, without recourse and without representation or warranty (except
as provided in this Assignment and Acceptance) ____% (the "Assignee's
Percentage Share") of (A) the Commitment [and the Committed Loans] of the
Assignor, (B) the Notes, and (C) all related rights, benefits, obligations,
liabilities and indemnities of the Assignor under and in connection with the
Credit Agreement and the Loan Documents.

     [if appropriate, add paragraph specifying payment to Assignor by Assignee
of outstanding principal of, accrued interest on; and fees with respect to,
Committed Loans assigned]

     (b)     With effect on and after the Effective Date (as defined in
Section 5 hereof), the Assignee shall be a party to the Credit Agreement and
succeed to all of the rights and be obligated to perform all of the
obligations of a Bank under the Credit Agreement, including the requirements
concerning confidentiality and the payment of indemnification, with a
Commitment in an amount equal to the Assigned Amount. The Assignee agrees that
it will perform in accordance with their terms all of the obligations which by
the terms of the Credit Agreement are required to be performed by it as a
Bank. It is the intent of the parties hereto that the Commitment of the
Assignor shall, as of the Effective Date, be reduced by an amount equal to the
Assigned Amount and the Assignor shall relinquish As rights and be released
from its obligations under the Credit Agreement to the extent such obligations
have been assumed by the Assignee.

     (c)     After giving effect to the assignment and assumption set forth
herein, on the Effective Date the Assignee's Commitment will be
$_______________.

     (d)     After giving effect to the assignment and assumption set forth
herein, on the Effective Date the Assignor's Commitment will be
$_______________.

     2.      Payments.

     (a)     As consideration for the sale, assignment and transfer
contemplated in Section I hereof, the Assignee shall pay to the Assignor on
the Effective Date in immediately available funds an amount equal to
$_______________, representing the Assignee's Pro Rate Share of the principal
amount of all Committed Loans.

     (b)     The [Assignor] [Assignee] further agrees to pay to the Agent a
processing fee in the amount specified in Section 26 of the Credit Agreement.

     3.     Reallocation of Payments.  Any interest, fees and other payments
accrued to the Effective Date with respect to the Commitment, the Committed
Loans and the Notes shall be for the account of the Assignor. Any interest,
fees and other payments accrued on and after the Effective Date with respect
to the Assigned Amount shall be for the account of the Assignee. Each of the
Assignor and the Assignee agrees that it will hold in trust for the other
party any interest, fees and other amounts which it may receive to which the
other party is entitled pursuant to the preceding sentence and pay to the
other party any such amounts which it may receive promptly upon receipt.

     4.     Independent Credit Decision.  The Assignee (a) acknowledges that
it has received a copy of the Credit Agreement and the Schedules and Exhibits
thereto, together with copies of the most recent financial statements referred
to in Section 10 of the Credit Agreement, and such other documents and
information as it has deemed appropriate to make its own credit and legal
analysis and decision to enter into this Assignment and Acceptance; and (b)
agrees that it will, independently and without reliance upon the Assignor, the
Agent or any other Bank and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit and legal
decisions in taking or not taking action under the Credit Agreement.

     5.     Effective Date; Notices.

     (a)     As between the Assignor and the Assignee, the effective date for
this Assignment and Acceptance shall be _______________, 200__ (the "Effective
Date"); provided that the following conditions precedent have been satisfied
on or before the Effective Date:

           (i)     this Assignment and Acceptance shall be executed and
delivered by the Assignor and the Assignee, together with the Notes;

           (ii)     the consent of the Agent required for an effective
assignment of the Assigned Amount by the Assignor to the Assignee under
Section 26 of the Credit Agreement shall have been duly obtained and shall be
in full force and effective as of the Effective Date;

           (iii)     the Assignee shall pay to the Assignor all amounts due to
the Assignor under this Assignment and Acceptance,

           (iv)     the processing fee referred to in Section 2(b) hereof and
in Section 26 of the Credit Agreement shall have been paid to the Agent; and

           (v)     the Assignor shall have assigned and the Assignee shall
have assumed a percentage equal to the Assignee's Percentage Share of the
rights and obligations of the Assignor under the Credit Agreement (if such
agreement exists).

     (b)     Promptly following the execution of this Assignment and
Acceptance, the Assignor shall deliver to the Agent for acknowledgment by the
Agent, a copy of this Assignment and Acceptance.

     [6.     Agent.  [INCLUDE ONLY IF ASSIGNOR IS AGENT]

     (a)     The Assignee hereby appoints and authorizes the Assignor to take
such action as agent on its behalf and to exercise such powers under the
Credit Agreement as are delegated to the Agent by the Banks pursuant to the
terms of the Credit Agreement.

     (b)     The Assignee shall assume no duties or obligations held by the
Assignor in its capacity as Agent under the Credit Agreement.]

     7.     Withholding Tax.  The Assignee (a) represents and warrants to the
Bank, the Agent and the Company that under applicable law and treaties no tax
will be required to be withheld by the Bank with respect to any payments to be
made to the Assignee hereunder, (b) agrees to furnish (if it is organized
under the laws of any jurisdiction other than the United States or any State
thereof) to the Agent and the Company prior to the time that the Agent or
Company is required to make any payment of principal, interest or fees
hereunder, duplicate executed originals of either U.S. Internal Revenue
Service Form 4224 or U.S. Internal Revenue Service Form 101 (wherein the
Assignee claims entitlement to the benefits of a tax treaty that provides for
a complete exemption from U.S. federal income withholding tax on all payments
hereunder) and agrees to provide new Forms 4224 or 100 1 upon the expiration
of any previously delivered form or comparable statements in accordance with
applicable U. S. law and regulations and amendments thereto, duly executed and
completed by the Assignee, and (c) agrees to comply with all applicable U.S.
laws and regulations with regard to such withholding tax exemption.

     8.     Representations and Warranties.

     (a)     The Assignor represents and warrants that (i) it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any Lien or other adverse claim, (ii) it is duly
organized and existing and it has the full power and authority to take, and
has taken, all action necessary to execute and deliver this Assignment and
Acceptance and any other documents required or permitted to be executed or
delivered by it in connection with this Assignment and Acceptance and to
fulfill its obligations hereunder; (iii) on notices to, or consents,
authorizations or approvals of any Person are required (other than any already
given or obtained) for its due execution, delivery and performance of this
Assignment and Acceptance, and apart from any agreements or undertakings or
filings required by the Credit Agreement, no further action by, or notice to,
or filing with, any Person is required of it for such execution, delivery or
performance; and (iv) this Assignment and Acceptance has been duly executed
and delivered by it and constitutes the legal, valid and binding obligation of
the Assignor, enforceable against the Assignor in accordance with the terms
hereof subject, as to enforcement, to bankruptcy, insolvency, moratorium,
reorganization and other laws of general application relating to or affecting
creditors' rights and to general equitable principles.

     (b)     The Assignor makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with the Credit Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Credit
Agreement or any other instrument or document furnished pursuant thereto. The
Assignor makes no representation or warranty in connection with, and assumes
no responsibility with respect to, the solvency, financial condition or
statements of the Company, or the performance or observance by the Company, of
any of its respective obligations under the Credit Agreement or any other
instrument or document furnished in connection therewith.

    (c)     The Assignee represents and warrants that (i) it is duly organized
and existing and it has M power and authority to take, and has taken, all
action necessary to execute and deliver this Assignment and Acceptance any
other documents required or permitted to be executed or delivered by it in
connection with this Assignment and Acceptance, and to fulfill its obligations
hereunder, (ii) no notices to, or consents, authorizations or approvals of any
Person are required (other than any already given or obtained) for its due
execution, delivery and performance of this Assignment and Acceptance; and
apart from any agreements or undertakings or flings required by the Credit
Agreement, no further action by, or notice to, or filing with, any Person is
required of it for such execution, delivery or performance, (iii) this
Assignment and Acceptance has been duly executed and delivered by it and
constitutes the legal, valid and binding obligation of the Assignee,
enforceable against the Assignee in accordance with the terms hereof, subject,
as to enforcement, to bankruptcy, insolvency, moratorium, reorganization and
other laws of general application relating to or affecting creditors' rights
and to general equitable principles; and (iv) it is an Eligible Assignee.

     9.     Further Assurances.  The Assignor and the Assignee each hereby
agree to execute and deliver such other instruments, and take such other
action, as either party may reasonably request in connection with the
transactions contemplated by this Assignment and Acceptance, including the
delivery of any notices or other documents or instruments to the Company or
the Agent, which may be required in connection with the assignment and
assumption contemplated hereby.

     10.     Miscellaneous.

     (a)     Any amendment or waiver of any provision of this Assignment and
Acceptance shall be in writing and signed by the parties hereto. No failure or
delay by either party hereto in exercising any right power or privilege
hereunder shall operate as a waiver thereof and any waiver of any breach of
the provisions of this Assignment and Acceptance shall be without prejudice to
any rights with respect to any other or further breach thereof.

     (b)     All payments made hereunder shall be made without any set-off or
counterclaim.

     (c)     The Assignor and the Assignee shall each pay its own costs and
expenses incurred in connection with the negotiation, preparation, execution
and performance of this Assignment and Acceptance.

     (d)     This Assignment and Acceptance may be executed in any number of
counterparts and a of such counterparts taken together shall be deemed to
constitute one and the same instrument.

     (e)     THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAW OF THE STATE OF OKLAHOMA- The Assignor and the
Assignee each irrevocably submits to the non-exclusive jurisdiction of any
State or Federal court sitting in Oklahoma over any suit, action or proceeding
arising out of or relating to this Assignment and Acceptance and irrevocably
agrees that all claim in respect of such action or proceeding may be heard and
determined in such Oklahoma State or Federal court. Each party to this
Assignment and Acceptance hereby irrevocably waives, to the fullest extent it
may effectively do so, the defense of an inconvenient forum to the maintenance
of such action or proceeding.

     (f)     THE ASSIGNOR AND THE ASSIGNEE EACH HEREBY KNOWINGLY, VOLUNTARILY
AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT
OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION
WITH THIS ASSIGNMENT AND ACCEPTANCE, THE Credit Agreement, ANY RELATED
DOCUMENTS AND AGREEMENTS OR ANY COURSE OF CONDUCT, COURSE OF DEALING OR
STATEMENTS (WHETHER ORAL OR WRITTEN).

     (g)     Assignee hereby provides the administrative detail on Addendum I
hereto.

     [Other provisions to be as may be negotiated between the Assignor and the
Assignee, provided that such provisions are not inconsistent with the Credit
Agreement.]

     IN WITNESS WHEREOF, the Assignor and the Assignee have caused this
Assignment and Acceptance to be executed and delivered by their duly
authorized officers as of the data first above written.

                              [ASSIGNOR)


                              _____________________________
                              By:
                              Title:
                              By:
                              Title:
                              Address:


                              [ASSIGNEE]


                              ______________________________
                              By:
                              Title:
                              By:
                              Title:
                              Address:

<PAGE>
(If required by Section 26 of the Credit Agreement)

ACKNOWLEDGED AND CONSENTED TO:

BANK OF OKLAHOMA, N.A., as Agent



By:  ___________________________
     Name:
     Title:



















































                                 ADDENDUM 1 TO

                      ASSIGNMENT AND ACCEPTANCE AGREEMENT

The following administrative details apply to the Assignee:

(A)     Notice Address:   _______________________________________________
        Assignee name:    _______________________________________________
        Address:          _______________________________________________
                          _______________________________________________
                          _______________________________________________
        Attention:        ________________________________________________
        Telephone:        (___)___________________________________
        Telecopier:       (___)___________________________________
        Telex (Answerback): ________________________________________

(B)     Payment Instructions:

        Account No.:      ________________________________________
        At:               ________________________________________
                          ________________________________________
                          ________________________________________
        Reference:        ________________________________________
        Attention:        ________________________________________






































                                  EXHIBIT "E"

                              SOLVENCY CERTIFICATE

     This Certificate is delivered pursuant to Section 9 of the Credit
Agreement, dated as of May 31, 2002 (the "Credit Agreement"), among DELTA
PETROLEUM CORPORATION, a Colorado corporation, DELTA EXPLORATION COMPANY,
INC., a Colorado corporation  and PIPER PETROLEUM COMPANY, a Colorado
corporation (collectively referred to herein as the "Borrowers" and each
individually are sometimes referred to herein as a "Borrower") and BANK OF
OKLAHOMA, N.A., a national banking association ("BOK"), and each of the
financial institutions which is a party hereto (as evidenced by the signature
pages to this Agreement) or which may from time to time become a party hereto
pursuant to the provisions of Section 28 hereof or any successor or assignee
thereof (hereinafter collectively referred to as "Banks", and individually,
"Bank") and BOK, as Agent ("Agent").  All capitalized terms used in this
Certificate which are defined in the Credit Agreement are used in this
Certificate with the same meanings as provided in the Credit Agreement.

     To induce the Banks to make the Loans, the undersigned hereby certifies
to the Agent and the Banks as follows:

     1.     I am the duly qualified and acting Chief Financial Officer of each
Borrower, and in such capacity I am familiar with the management of the
financial affairs and accounting practices of each Borrower and its
Subsidiaries and the preparation of the financial statements of the Borrowers
and their Subsidiaries.  I understand that the delivery of these financial
statements is a condition precedent to the Banks' respective obligations to
make Loans to the Borrowers and that the Banks will rely on the truth and
accuracy of such financial statements in connection with making such Loans to
the Borrowers.

     2.     I have reviewed the contents of this Certificate, and, to the
extent I have deemed it necessary or prudent, I have conferred with counsel
for the Borrowers for the purpose of discussing the meaning of its contents.
I have also consulted with other officers, employees, representatives,
advisers and agents of the Borrowers and their Subsidiaries with respect to
providing this certification.  I have made such other investigations and
inquiries as I have deemed necessary or prudent.

     3.     Neither any Borrowers nor any of their Subsidiaries are insolvent.
"Insolvent" as used herein means that the sum of a Borrower's or a
Subsidiaries' assets, at their fair valuation and based on their present fair
saleable value, is less than the amount of its debts, including contingent
liabilities.  As used herein, the term "debt" means any liability on a claim,
and "claim" as used herein means (i) the right to payment, whether or not such
right is reduced to judgment or is liquidated, unliquidated, fixed,
contingent, matured, unmatured, disputed, undisputed, legal, equitable,
secured or unsecured, and (ii) the right to an equitable remedy for breach of
performance if such breach gives rise to a right to payment, whether or not
such right to an equitable remedy is reduced to judgment or is fixed,
contingent, matured, unmatured, disputed, undisputed, secured or unsecured.
In reaching the foregoing conclusion, I have also taken into consideration the
probable liabilities, contingent or otherwise, of each Borrower and its
Subsidiaries to their respective creditors after giving effect to the
transactions contemplated by the Credit Agreement.

     4.     After the incurrence of their obligations under the Credit
Agreement and the Collateral Documents, neither any Borrower nor any of its
Subsidiaries will have incurred debts beyond their ability to pay such debts
as they mature (taking into account the timing and amounts of cash to be
received by the Borrowers and their Subsidiaries), and the cash available to
the Borrowers and their Subsidiaries, after taking into account all other
anticipated uses of such cash, is anticipated to be sufficient to pay all such
amounts on or in respect of the debts of the Borrowers and their Subsidiaries,
as the case may be, when such amounts are required to be paid.

     6.     After the incurrence of their obligations under the Credit
Agreement and Collateral Documents and the consummation of the transactions
contemplated by the Purchase and Sale Agreement, each of the Borrowers and its
Subsidiaries will have sufficient capital to conduct their present or proposed
business, and the property of each of the Borrowers and its Subsidiaries does
not constitute unreasonably small capital with which to conduct its present or
proposed business.

     7.     Neither any Borrower nor any of its Subsidiaries is entering into
the arrangements contemplated by the Credit Agreement, the Security
Instruments or the Purchase and Sale Agreement, or intending to make any
transfer or incur any obligations thereunder, with the actual intent to
hinder, delay or defraud any of its present or future creditors.

     I represent the foregoing information to be true and correct to my best
knowledge and belief and execute this Certificate, in my representative
capacity on behalf of the Borrowers and their Subsidiaries, as of May __,
2002.

                         ________________________________________________,
                         _____________, Chief Financial Officer of each of
                         DELTA PETROLEUM CORPORATION, and
                         DELTA EXPLORATION COMPANY, INC. and
                         PIPER PETROLEUM COMPANY, a Colorado corporation


</TEXT>
</DOCUMENT>
