DELTA PETROLEUM CORP/CO, 10KSB, 1995-10-13

DELTA PETROLEUM CORP/CO
10KSB, 1995-10-13
CRUDE PETROLEUM & NATURAL GAS

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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-KSB

Annual Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934

[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the fiscal year ended June 30, 1995.

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the transition period from .

Commission File No. 0-16203

DELTA PETROLEUM CORPORATION
(Exact name of registrant as specified in its charter)

Colorado 84-1060803
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

Suite 3310, 555 Seventeenth Street, Denver, Colorado 80202
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code:
(303) 293-9133

Securities registered under Section 12(b) of the Exchange Act:
None

Securities registered under to Section 12(g) of the Exchange
Act:
Common Stock, $.01 par value

Check whether issuer (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past
90 days.
Yes X No

Check if there is no disclosure of delinquent filers in response
to Item 405 of Regulation S-B contained in this form, and no
disclosure will be contained, to the best of Registrant's
knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [X]

The aggregate market value as of October 9, 1995, of voting stock
held by non-affiliates of the registrant was $16,112,154.

As of October 9, 1995, 4,029,154 shares of registrant's Common
Stock $.01 par value were issued and outstanding.

The Index to Exhibits appears at Page 42.

TABLE OF CONTENTS

PART I

PAGE

ITEM 1. DESCRIPTION OF BUSINESS 1
ITEM 2. DESCRIPTION OF PROPERTY 6
ITEM 3. LEGAL PROCEEDINGS 15
ITEM 4. SUBMISSION OF MATTERS TO A VOTE
OF SECURITY HOLDERS 15

PART II

ITEM 5. MARKET FOR DELTA'S COMMON EQUITY
AND RELATED STOCKHOLDER MATTERS 15
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS
OR PLAN OF OPERATIONS 16
ITEM 7. FINANCIAL STATEMENTS 25
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH
ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE 25

PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS
AND CONTROL PERSONS; COMPLIANCE
WITH SECTION 16(a) OF THE
EXCHANGE ACT 26
ITEM 10. EXECUTIVE COMPENSATION 29
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT 31
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS 35
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K 40

PART I

ITEM 1. DESCRIPTION OF BUSINESS

(a) Business Development.

Delta Petroleum Corporation ("Delta", "Registrant" or
"Company") is a Colorado corporation organized December 21, 1984.
Delta maintains its principal executive offices at Suite 3310,
555 Seventeenth Street, Denver, Colorado, 80202, and its
telephone number is (303) 293-9133. The company's common stock
is listed on NASDAQ under the symbol DPTR.

The Company is engaged in the acquisition, exploration,
development and production of oil and gas properties. As of June
30, 1995, the Company had varying interests in 80 gross (11.51
net) productive wells located in four states. The Company has
undeveloped properties in four states, including interests in
four Federal Units and one lease offshore California. The
Company operates 14 of the wells and the remaining wells are
operated by independent operators. All wells are operated under
contracts that are standard in the industry. At June 30, 1995,
the Company estimated its proved reserves attributable to its
onshore properties to be 121,000 Bbls of oil and 4.16 Bcf of gas
of which 43,000 Bbls of oil and 2.55 Bcf of gas are proved
developed reserves. At June 30, 1995, the Company estimated its
proved undeveloped reserves attributable to its offshore
California properties to be 57,044,952 Bbls of oil and 62.1 Bcf
of gas. There are significant uncertainties as to the timing of
the development of the offshore properties. (See "Description of
Property"; Item 2 herein.)

Delta has an authorized capital of 3,000,000 shares of
$.10 par value preferred stock and 300,000,000 shares of $.01 par
value common stock of which 4,029,154 shares of common stock were
issued and outstanding as of October 9, 1995. Delta has outstanding
warrants and options to purchase 1,187,000 shares at prices ranging
from $1.25 per share to $11.00 per share. Additionally, Delta has
outstanding options which were granted to officers, employees and
consultants under the Company's 1993 Incentive Plan to purchase up to
970,375 shares of common stock at prices from $1.25 to $9.75 per share.
On December 18, 1992, the Company reverse split its common stock
on a one for one hundred (1:100) share basis (with fractional
shares rounded up). All references to common stock herein give
effect to the reverse split.

At October 9, 1995, the Company owned 4,277,977 shares
of the common stock of Amber Resources Company ("Amber"),
representing 91.68% of the outstanding common stock of Amber.
Amber is a public company (registered under the Securities
Exchange Act of 1934) whose activities include oil and gas
exploration, development, and production operations.
Amber owns interests in producing oil and gas properties in
Oklahoma and non-producing oil and gas properties offshore
California near Santa Barbara. The Company and Amber entered into
an agreement effective March 31, 1993 which provides, in part,
for the sharing of the management between the two companies and
allocation of expenses related thereto.

Reorganization. In October 1992, Delta concluded a
series of agreements with Underwriters Financial Group, Inc.
("UFG", formerly Chippewa Resources Corporation) (collectively,
the "UFG Agreement") to participate in a plan to reorganize and
recapitalize Delta (the "Plan of Reorganization"). Prior to the
reorganization, UFG owned approximately 89% of the outstanding
shares of Delta's common stock. Under the terms of the UFG
Agreement, UFG transferred its oil and gas properties and certain
other related assets to Delta as a contribution to the capital of
Delta. The assets transferred included producing and
non-producing oil and gas properties, accounts receivable, oil
field equipment, and office furniture and equipment. UFG also
transferred 4,110,660 shares of common stock of Amber Resources
Company ("Amber") to Delta. The shares transferred represented
an 88.09% interest in Amber.

Also in connection with the Plan of Reorganization, Delta
issued 1,030,000 shares of common stock to Messrs. Burdette A. Ogle and
Ronald Heck (collectively, "Ogle") in exchange for their working interests
in two federal offshore California oil and gas units and 167,317 shares of
common stock of Amber.

The oil and gas properties and shares of common stock
of Amber received from Ogle were recorded at Ogle's predecessor
cost of approximately $45,000. The assets transferred
to Delta by UFG were recorded at the predecessor cost of the
assets to UFG, as adjusted. UFG followed the full cost method of
accounting for its oil and gas properties. The predecessor cost of the
producing properties transferred was adjusted to conform to the
Company's policy of accounting for oil and gas properties under
the successful efforts method of accounting. The predecessor
cost of each oil and gas property was further adjusted, if
necessary, to reduce the amount recorded to the estimated fair
value of the oil and gas reserves attributable to the property,
if less than the adjusted predecessor cost of the property.

On February 23, 1995, the Company and UFG executed and
entered into a letter agreement dated February 22, 1995, in which
Delta agreed to convert $736,932 of principal and interest due
from UFG under its promissory note dated March 31, 1993 into
491,300 shares of UFG common stock. In addition, UFG and Delta
agreed that the remaining $736,932 owed by UFG to Delta would be
satisfied by the transfer of 92,117 shares of Delta common stock
from UFG to Delta. Delta agreed to file a registration statement
covering the registration of the remaining 888,063 shares of
Delta common stock owned by UFG and UFG agreed that the
shares would be held by Delta as collateral pending the discharge
of UFG's obligations to Snyder Oil Corporation. Upon the
effectiveness of the registration statement, UFG will have
the right to sell all or some of the Delta shares covered by the
registration statement at a price of not less than $6.875 or the
bid price on the effective date, whichever is higher. As of
October 9, 1995, the registration statement has not been declared
effective. An escrow will be established for the 888,063 shares
pending sale to assure that the shares are sold pursuant to the
terms of the agreement and to assure that the first proceeds are
used to discharge UFG's promissory note to Snyder Oil Corporation
("SOCO") thereby releasing to Delta the Amber Resources Company
common stock held by SOCO as collateral for the promissory note.

Certain of the oil and gas properties transferred had
been pledged to secure existing indebtedness of UFG, which
indebtedness remained an obligation of UFG under the terms of the
UFG Agreement. To the extent the existing secured indebtedness
on a particular property exceeded its adjusted predecessor cost,
the transfer of the property was recorded in the accompanying
financial statements at its adjusted predecessor cost and a
liability was recorded in an amount equal to the asset recorded.
To the extent the existing secured indebtedness on a particular
property was less than the adjusted predecessor cost, the
property was recorded at its adjusted predecessor cost, the
related liability was recorded and the net amount was reflected
as a capital contribution by UFG. Subsequent payments by UFG are
recorded as a reduction of the liability and a capital
contribution.

3,357,003 shares of common stock of Amber transferred
to the Company by UFG are pledged to secure a note payable to
Snyder Oil Corporation (the "Snyder Note"). The balance due on
the note payable at the time of the transfer of the Amber shares
to Delta was recorded as a liability of Delta, because of the
uncertainty of the ability of UFG to fulfill its obligations
under the note.

The Company believes there is substantial risk that UFG
will be unable to repay the Snyder Note, which is currently in
default, and that the encumbered portion of the Amber shares
owned by Delta could be lost. The loss of the encumbered Amber
shares would reduce Delta's ownership interest in Amber to
19.74%. Amber's oil and gas revenue during the year ended June
30, 1995 amounted to approximately $730,000 which constituted
approximately 57% of the Company's consolidated oil and gas
revenues (see Note 4 to the "Consolidated Financial Statements"). Amber's
proved oil and gas reserves attributable to its onshore
properties are estimated to be 5,100 Bbls of oil and 1.91 Bcf of
gas. Amber's proved undeveloped oil and gas reserves
attributable to its offshore California properties are estimated
to be 10,582,000 Bbls of oil and 12.96 Bcf of gas. A loss of
the encumbered Amber shares would significantly reduce the
Company's oil and gas revenue and reserves and have a material
effect on the operations of the Company. (See "Financial
Statements"; Item 7 herein and "Management's Discussion and
Analysis or Plan of Operation"; Item 6.)

The UFG Agreement also contained provisions regarding
employment agreements, voting agreements and consulting
agreements for the Company's executive officers, Aleron H.Larson,
Jr. and Roger A. Parker, and provided for the transfer to each of
Messrs. Parker and Larson 162,330 shares of the Company's
outstanding common stock owned by UFG in exchange for certain
securities of UFG. As of October 9, 1995, UFG owns 888,063
shares or approximately 22.04% of Delta's outstanding common
stock, all of which is voted by Messrs. Parker and Larson, under
a voting agreement. (See "Certain Relationships and Related
Transactions"; Item 12 herein.)

Recent Acquisitions. Effective February 25, 1994,
Burdette A. Ogle ("Ogle"), a 21.44% shareholder of Delta, granted
Delta an option ("Option") to acquire working interests in three
proved undeveloped offshore Santa Barbara California, federal oil
and gas units ("Interests"). On August 31, 1994, in an addendum
to the February 25, 1994 Agreement granting the Option, Ogle
agreed to extend the period during which the Option could be
exercised until January 3, 1995 in consideration of the issuance
by Delta to Ogle of warrants to purchase 100,000 shares of common
stock at a price of $8.00 per share until August 31, 1999
with a call provision whereby Delta may repurchase any
unexercised warrants for an aggregate sum of $1,000 after the
stock has traded at $10.00 per share or greater for thirty
consecutive trading days. On January 3, 1995, the Company
exercised its option to acquire these properties from Ogle.
Under the Purchase and Sale Agreement and related assignment and
conveyance of the interests, Ogle immediately assigned and
conveyed the Interests to Delta. The purchase price of
$8,000,000 is represented by a production payment reserved in the
documents of assignment and conveyance and is payable out of
three percent (3%) of the oil and gas production from the
Interests. Delta paid Ogle $250,000 in 1995, is to pay an
additional $250,000 in 1996 and a minimum of $350,000 annually
thereafter until: 1) the $8,000,000 purchase price is paid; 2)
80% of the ultimate reserves of any lease were produced; or 3) 30
years from the date of the conveyance. Delta already owned
other interests in these same federal units.

(b) Business of Issuer.

During the year ended June 30, 1995, Delta was engaged
in only one industry, namely the acquisition, exploration,
development, and production of oil and gas properties and related
business activities. The Company's oil and gas operations have
been comprised primarily of production of oil and gas, drilling
exploratory and development wells and related operations and
acquiring and selling oil and gas properties. The Company,
directly and through Amber, currently has producing oil and gas
interests, undeveloped leasehold interests and related assets in
south Texas; interests in proven but undeveloped offshore Federal
leases and units near Santa Barbara, California; producing and
non-producing interests in the Denver-Julesburg, Piceance and
North Park Basins of Colorado; and producing interests in the
Anadarko Basin in Oklahoma and in the Arkoma Basin in western
Arkansas. As of June 30, 1995, the Company had interests in 80
wells. The Company operates 14 of the wells and the remaining
wells are operated by independent operators under contracts that
are standard within the industry. The Company intends to
continue its emphasis on the drilling of exploratory and
development wells primarily in Colorado, Oklahoma and elsewhere
in the Rocky Mountain and Mid-Continent regions.

The Company intends to drill on some of its leases
(presently owned or subsequently acquired); may farm out or sell
all or part of some of the leases to others; and/or may
participate in joint venture arrangements to develop certain
other leases. Only rarely will the Company drill its entire
interest in a lease rather than negotiating participation in some
portion by others. Such transactions may be structured in any
number of different manners which are in use in the oil and gas
industry. Each such transaction is likely to be individually
negotiated and no standard terms may be predicted.

(1) Principal Products or Services and Their Markets.
The principal products produced by the Company are crude oil and
natural gas. The products are generally sold at the wellhead to
purchasers in the immediate area where the product is produced.
The principal markets for oil and gas are refineries and
transmission companies which have facilities near the Company's
producing properties.

(2) Distribution Methods of the Products or Services.
Oil and natural gas produced from the Company's wells are
normally sold to the purchasers referenced in (6) below. Oil is
picked up and transported by the purchaser from the wellhead. In
some instances the Company will be charged a fee for the cost of
transporting the oil which fee is deducted from or included in
the price paid for the oil. Natural gas wells are connected to
pipelines owned by the natural gas purchasers. A variety of
pipeline transportation charges are usually included in
the calculation of the price paid for the natural gas.

(3) Status of Any Publicly Announced New Product or
Service. The Company has not made a public announcement of, and
no information has otherwise become public about, a new product
or industry segment requiring the investment of a material amount
of the Company's total assets.

(4) Competitive Business Conditions. Oil and gas
exploration and acquisition of undeveloped properties is a highly
competitive and speculative business. The Company competes with
a number of other companies, including major oil companies and
other independent operators which are more experienced and which
have greater financial resources. The Company does not hold a
significant competitive position in the oil and gas industry.

(5) Sources and Availability of Raw Materials and
Names of Principal Suppliers. Oil and gas may be considered raw
materials essential to Delta's business. The acquisition,
exploration, development, production, and sale of oil and gas are
subject to many factors which are outside of Delta's control.
These factors include national and international economic
conditions, availability of drilling rigs, casing, pipe, and
other equipment and supplies, proximity to pipelines, the supply
and price of other fuels, and the regulation of prices,
production, transportation, and marketing by the Department of
Energy and other federal and state governmental authorities.

(6) Dependence on One or a Few Major Customers. Delta
has nine major customers for the sale of oil and gas as of the
date of this report, namely, Koch Oil Company, Koch Hydrocarbon
Company, Howell Petroleum, Oryx Energy, Apache Corporation,
Natural Gas Clearinghouse, El Paso Natural Gas Company, Transok
and Twister Transmission Company. The loss of any one or all of
these customers would not have a material adverse effect on
Delta's business.

(7) Patents, Trademarks, Licenses, Franchises,
Concessions, Royalty Agreements and Labor Contracts. Delta does
not own any patents, trademarks, licenses, franchises,
concessions, or royalty agreements except oil and gas interests
acquired from industry participants, private landowners and state
and federal governments. Delta is not a party to any labor
contracts.

(8) Need for Any Governmental Approval of Principal
Products or Services. Except that the Company must obtain certain
permits and other approvals from various governmental agencies
prior to drilling wells and producing oil and/or natural gas, the
Company does not need to obtain governmental approval of its
principal products or services.

(9) Effect of Existing or Probable Governmental
Regulations on the Business. The oil and gas industry is
extensively regulated by federal, state and local authorities.
Legislation affecting the oil and gas industry is under constant
view for amendment or expansion. Numerous departments and
agencies, both federal and state, have issued rules and
regulations binding on the oil and gas industry and its
individual members, some of which carry substantial penalties for
the failure to comply. The regulatory burden on the oil and gas
industry increases its cost of doing business and consequently
affects its profitability. Inasmuch as such laws and regulations
are frequently amended or reinterpreted, the Company is unable to
predict the future cost or impact of complying with such
regulations.

(10) Research and Development. Delta does not engage
in any research and development activities. Since its inception,
Delta has not had any customer or government-sponsored material
research activities relating to the development of any new
products, services or techniques, or the improvement of existing
products, services or techniques.

(11) Environmental Protection. Because Delta is
engaged in acquiring, operating, exploring for and developing
natural resources, it is subject to various state and local
provisions regarding environmental and ecological matters.
Therefore, compliance with environmental laws may necessitate
significant capital outlays, may materially affect Delta's
earnings potential, and could cause material change in Delta's
proposed business. At the present time, however, the existence
of environmental law does not materially hinder nor adversely
affect Delta's business. Capital expenditures relating to
environmental control facilities have not been material to the
operation of Delta since its inception. In addition, Delta does
not anticipate that such expenditures will be material during the
fiscal year ending June 30, 1996.

(12) Employees. The Company has six full time
employees.

ITEM 2. DESCRIPTION OF PROPERTY

(a) Office Facilities.

Delta's offices are located at 555 Seventeenth Street,
Suite 3310, Denver, Colorado 80202. Delta leases approximately
4,837 square feet of office space for $5,679 per month and the
lease will expire in March of 1998. Currently, Delta subleases
approximately 500 square feet to Bion Environmental Technologies,
Inc. for $940 per month.

(b) Oil and Gas Properties.

The Company owns interests in oil and gas properties
located in California, Colorado, Oklahoma, Texas and elsewhere.
Wells from which the Company receives revenues are owned only
partially by the Company. For information concerning the
Company's oil and gas production, average prices and costs,
estimated oil and gas reserves and estimated future cash flows,
see the tables set forth below in this section and "Note 12 of
Notes to Financial Statements" included in this report. The
Company did not file oil and gas reserve estimates with any
federal authority or agency other than the S.E.C. during the year
ended June 30, 1995, the six months ended June 30, 1994, or the
year ended December 31, 1993.

(1) Principal Properties.

The following is a brief description of Delta's
principal properties:

California.

The Company's Offshore California proved
undeveloped reserves are attributable to its interests in four
federal units (plus one additional lease) located offshore
California near Santa Barbara. While these interests represent
ownership of substantial oil and gas reserves classified as
proved undeveloped, the cost to develop the reserves will be very
substantial. The Company may be required to farm out all or a
portion of its interests in these properties if it cannot fund
its share of the development costs. There can be no assurance
that the Company can farm out its interests on acceptable terms.
If the Company were to farm out its interests in these
properties, its share of the proved reserves attributable to the
properties would be decreased substantially. The Company may
also incur substantial dilution of its interests in the
properties if it elects to use other methods of financing the
development costs.

These units have been formally approved and are
regulated by the Minerals Management Service of the Federal
Government. However, due to a history of opposition to offshore
drilling and production in California by some individuals and
groups, the process of obtaining all of the necessary permits and
authorizations to develop the properties will be lengthy and even
after all required approvals are obtained, lawsuits may possibly
be filed to attempt to further delay the development of the
properties. While the Federal Government has recently attempted
to expedite this process, there can be no assurance that it will
be successful in doing so. The Company does not have a
controlling interest in and does not act as the operator of any
of the offshore California properties and consequently will not
control the timing of either the development of the properties or
the expenditures for development. Management and its independent
engineering consultant have considered the these factors relating
to timing of the development of the reserves in the preparation
of the reserve information relating to these properties. As
additional information becomes available in the future, the
Company's estimates of the proved undeveloped reserves
attributable to these properties could change, and such changes
could be substantial.

Gato Canyon Unit. The most significant unit is known as
the Gato Canyon Unit, in which the Company owns a 15.60% working
interest (directly 8.63% and through Amber 6.97%). This 10,100
acre unit is operated by Samedan Oil Corporation. Four of the
five wells drilled on the unit to date have indicated the
presence of oil and gas reserves. In April 1989, Samedan
announced the completion and test of the Samedan P-0460 #2 which
yielded a test flow rate of 5,500 Bbls of oil per day from the
Monterey Formation between 5,000 and 6,800 feet of drill depth.
The Monterey Formation is a highly fractured shale formation. The
Monterey (which ranges from 1,500' to 2,900' in thickness) is the
main productive and target zone in many offshore California oil
fields (including the Company's federal leases and/or units). As
of July 1, 1995, Mannon Associates, Inc. ("Mannon"), an
independent petroleum engineering firm based in Santa Barbara,
California, issued a report stating that Gato Canyon contains
recoverable reserves estimated to be 72.6 million Bbls of oil and
102.6 Bcf of natural gas representing 11.32 million Bbls of oil
and 16.01 Bcf of natural gas net to the Company's 15.60% working
interest at July 1, 1995. The oil has an estimated average
gravity of 16 degrees API. Based on prices of $11 per Bbl and $1.68 per
Mcf and SEC parameters, the Company's 15.60% working interest in
the Gato Canyon Unit had a pretax discounted (10%) present value
of approximately $17,024,000 as of July 1, 1995. (See "--Oil and
Gas Reserves".) No production in the Gato Canyon Unit is
presently anticipated before 2002.

Point Sal Unit. The Company holds a 6.83% working
interest in the Point Sal Unit. This 22,772 acre unit is
operated by Shell Oil Company. All four wells drilled on this
unit have indicated the presence of producible oil and gas
reserves in the Monterey Formation. The largest of these, the
Sun P-0422 #1 yielded a combined test flow rate of 3,750 Bbls of
oil per day from the Monterey. The oil in the upper block has an
average estimated gravity of 10 degrees API and the oil in the subthrust
block has an average estimated gravity of 15 degrees API. Based on a
report prepared by Mannon effective July 1, 1995, Point Sal Unit
contains proved undeveloped recoverable reserves of 266.3 million
Bbls of oil and 298.3 Bcf of natural gas, equivalent to 18.17
million Bbls of oil and 20.36 Bcf of natural gas net to the
Company's interest at July 1, 1995. Based on prices of $11 per
barrel and $1.68 per Mcf and SEC parameters, the Company's 6.83%
working interest in the Point Sal Unit had a pre-tax present
value (discounted at 10%) of approximately $22,417,000 as of July
1, 1995. (See "--- Oil and Gas Reserves".) No production in the
Point Sal Unit is presently anticipated before 2003.

Lion Rock Unit and Federal OCS Tract P-0409. The
Company holds a 1% net profits interest (through Amber) in the
Lion Rock Unit and a 17.67% working interest (directly) in 5,693
acres in Federal OCS Tract P-0409 which is immediately adjacent
to the Lion Rock Unit and contains a portion of the San Miguel
Field reservoir. Lion Rock is operated by Shell Oil Company. An
aggregate of seven wells have been drilled on this unit of which
four have been completed and tested which indicate producible oil
and gas reserves in the Monterey Formation. Additionally, the
unit is immediately contiguous with the San Miguel Field which is
in the same reservoir as defined by drilling and testing of six
wells, seismic data and geological analysis to date. Based on a
report prepared by Mannon on July 1, 1995, the Lion Rock Unit
contains proved undeveloped recoverable reserves of 452.7 million
Bbls of oil and 408.8 Bcf of natural gas, equivalent to 25.27
million Bbls of oil and 22.82 Bcf of natural gas net to the
Company's interest at July 1, 1995. The oil has an average
estimated gravity of 10.7 degrees API. Based on prices of $11 per barrel
and $1.68 per Mcf and SEC parameters, the Company's aggregate
interest in the Lion Rock Unit had a pre-tax present value
(discounted at 10%) of approximately $24,248,000 as of July 1,
1995. (See "--Oil and Gas Reserves".) The Mannon evaluation
includes the Lion Rock Unit and Federal OCS Tract P-0409 each of
which comprise a portion of the San Miguel Field. This tract is
not currently part of the Lion Rock Unit, but prior to
development the Lion Rock Unit is expected to be expanded to
include P-0409. No production in the Lion Rock Unit is presently
anticipated before 2002.

Sword Unit. The Company (through Amber) holds a .8731%
working interest in the Sword Unit. This 12,240 acre unit is
operated by Conoco, Inc. In aggregate, three wells have been
drilled on this unit of which two wells have been completed and
tested to date with calculated flow rates of from 4,000 to 5,000
Bbls per day, which indicate producible oil and gas reserves in
the Monterey Formation. Based on a July 1, 1995 report prepared
by Mannon, the Sword Unit contains proved undeveloped recoverable
reserves of 261.1 million Bbls of oil and 330.0 Bcf of natural
gas representing reserves of 2.28 million Bbls of oil (having an
estimated average gravity of 10.6 API) and 2.88 Bcf of natural
gas to the Company's interest at July 1, 1995. Based on prices
of $11 per barrel and $1.68 per Mcf and SEC parameters, the
Company's interest in the Sword Unit had a pre-tax present value
(discounted at 10%) of approximately $1,768,000 as of July 1,
1995. (See "--Oil and Gas Reserves".) No production in the Sword
Unit is presently anticipated before 2006.

Colorado.

Denver-Julesburg Basin. The Company owns leasehold
interests in approximately 560 gross (64 net) acres in the
Denver-Julesburg Basin of Colorado and has interests in nine
gross (1.03 net) wells in the Denver-Julesburg Basin producing
primarily from the D-Sand and J-Sand formations.

Piceance Basin. During the fiscal year ended December
31, 1993, Delta acquired the entire working interests in five gas
wells (5 net), oil and gas leases covering 17,852 gross and
11,723 net acres and options to lease an additional 2,493 gross
and 2,203 net acres in the Piceance Basin in Mesa and Rio Blanco
counties, Colorado. The acreage is located in and around Plateau
Field. The Company plans to attempt re-stimulation and/or
re-completion of the five wells during the next twelve months and
possibly drill new wells on the acreage depending on the success
of the workovers. Because of low natural gas prices during the
fiscal year ended June 30, 1995 the Company allowed the options
to lease the additional 2,203 net acres to expire. The Company
has recently begun recompleting one of the five wells acquired
but does not have conclusive results at this time.

North Park Basin. The Company owns leasehold interests
in approximately 11,986 gross and net acres in the North Park
Basin of Colorado. This acreage is prospective for horizontal
drilling to the fractured Niobrara Shale formation. In acquiring
its North Park properties, the Company has selected areas known
to be in close proximity to vertical wells drilled into the
Niobrara Formation that were either producers or exhibited oil
and gas shows. Horizontal exploration has only recently begun in
the North Park Basin and no commercial horizontal wells have yet
been completed. The Company has formed a joint venture with
industry partners to explore the Niobrara formation on the
portion of its lease block in and around the Coalmont Field area
where North Park Basin's most productive Niobrara production
has been found to date. In addition to the Niobrara formation,
the Company's leasehold is prospective for conventional drilling
to the Pierre, Frontier, Muddy, Dakota, Lakota and Entrada
formations, all of which produce in the North Park Basin.

Oklahoma.

The Company directly (17 wells) and through Amber (42
wells) owns non-operating working interests in 59 natural gas
wells in Oklahoma. The wells range in depth from 4,500 to 20,000
feet and produce from the Red Fork, Atoka, Morrow and Springer
formations. Most of the Company's reserves are in the Atoka
formation. Apache Corporation operates 20 of the wells in which
the Company owns an interest. Other major operators include
Samson Resources Corporation, Meridian Oil Company and Ricks
Exploration. The working interests range from less than 1% to 40%
and average about 6% per well. Many of the wells have remaining
productive lives of 20 to 30 years.

Approximately half of the Oklahoma wells were acquired
by Amber subject to a recoupment agreement with a gas purchaser.
Under the terms of the recoupment agreement, the gas purchaser
was entitled to receive up to 75% of future production to recoup
gas purchased in connection with the settlement of a previous
take or pay contract covering the properties. The Company was
responsible for royalties and for production costs associated
with the properties subject to the recoupment agreement.

The obligation under the recoupment agreement has been
accounted for in a manner similar to a production payment. The
estimated present value of the obligation at the date of the
acquisition of the properties was recorded as a liability. The
liability was calculated based on remaining volumes of gas due,
using the price of gas at the date of the acquisition of the
properties, discounted at 15% over the period the gas was
expected to be recouped. The liability was periodically
increased by the accretion of the discount and was reduced as the
gas was delivered to the gas purchaser. The gas produced and
delivered to the gas purchaser (recoupment gas) was recorded as
revenue at the then current price of natural gas. Any difference
between the revenue recorded for the recoupment gas and the
reduction in the recoupment obligation was accounted for as an
increase or decrease in interest expense.

Recoupment gas royalties represent royalties due on
recoupment gas produced and delivered to the gas purchasers
pursuant to the terms of the recoupment agreement described
above. The Company has estimated the liability to the royalty
owners based on the market price of the gas during the period the
gas was produced and delivered to the gas purchaser. The
Company's method of estimating the liability to royalty owners is
based upon its interpretation of existing law in the jurisdiction
as applied to the circumstances relating to its properties.
There is no assurance that the Company's method of calculating
its liability to the royalty owners would prevail in court if
challenged and if challenged that another method of calculation
would not be imposed on the Company.

On November 18, 1994, the Company entered into an
agreement with El Paso Natural Gas Company ("El Paso") under
which Amber agreed to transfer to El Paso, Amber's interest in
four wells and the associated acreage in complete satisfaction of
Amber's recoupment gas obligation. As a result of this
agreement, the Company is no longer be obligated to El Paso for
recoupment gas from the remaining wells originally subject to the
recoupment agreement.

Texas.

Austin Chalk Trend. The Company owns leasehold
interests in approximately 1,558 gross acres (393 net acres) in
the area encompassing the Austin Chalk Trend in Gonzales and
Zavala Counties, Texas and owns interests in four gross (1.28
net) horizontal wells in the Austin Chalk Trend. This does not
include the interest of the Company in an additional well, the
ownership of which is subject to pending litigation.

(2) Other Properties.

San Juan Basin - New Mexico. The Company owns
leasehold interests in approximately 2,230 gross (1,115 net)
acres in the San Juan Basin in New Mexico. This leasehold is
prospective for drilling to the fractured Mancos Shale Formation.
The Company's leasehold is situated between and on trend with
existing fractured Mancos production. The Company formed a joint
venture with two industry partners to explore the Mancos Shale
(either vertically or horizontally) on this leasehold, which
directly offsets the LaPlata Mancos Unit, which has produced over
622,000 Bbls of oil (six wells) at an average depth of less than
5,900 feet. Other objectives are the Fruitland, Mesa Verde and
Dakota Formations which produce natural gas throughout the
immediate area. To date the parties have not developed plans for
commencing exploration activities.

During February 1994, Delta conveyed an interest in
certain leases in San Juan County, New Mexico to an unaffiliated
party reserving an overriding royalty interest of approximately
1.25% net to Delta. Delta retained the rights to its interest in
these leases below the Fruitland Coal formation. The conveyance
related to leases covering 1,400 gross acres. During fiscal
1995, Delta conveyed additional interests on the same terms and
conditions on approximately 600 gross acres nearby.

Southwest Sulu Sea - Philippines. The Company holds an
interest in the proposed Southwest Sulu Sea "Geophysical Survey
and Exploration Contract" (GSEC) Application located offshore in
the Philippine Islands. During fiscal 1995, Delta acquired the
interest of Troy Bates in exchange for 50,000 shares of common
stock, giving Delta a total interest of 5.5%. This approximate
3,800,000 acre contract area will be operated by Crestone Energy
Corporation. The GSEC has been applied for but has not yet been
granted. The focus of the GSEC will be to develop drillable
prospects through the acquisition and evaluation of
geophysical/geological data within the contract area. Portions
of three geologic sub-basins exist within the contract area and
the presence of hydrocarbons has been identified from some of the
exploratory wells drilled to date in nearby areas outside the
contract area. The Company has reported no reserves related to
the GSEC. Management believes the potential value of the GSEC is
entirely speculative as of this date.

The Company is not obligated to provide a fixed and
determined quantity of oil and gas in the future under existing
contracts or agreements. During the year ended June 30, 1995,
the six months ended June 30, 1994 and the year ended December
31, 1993, the Company has not had, nor does it now have, any
long-term supply or similar agreements with governments or
authorities pursuant to which the Company acted as producer. The
following table sets forth the Company's average sales prices and
average production costs (excluding amounts attributable to
recoupment gas produced) during the periods indicated:

Year Ended Six Months Year Ended
June 30, Ended June 30, December 31,
1995 1994 1993

Average sales price:
Oil (per barrel) $16.34 $13.61 $21.38

Natural Gas (per Mcf) $ 1.55 $ 1.94 $ 1.95

Production costs
(per Mcf equivalent) $ .48 $ .66 $.61

The profitability of the Company's oil and gas production
activities is affected by the fluctuations in the sale prices of
its oil and gas production. (See "Management's Discussion
and Analysis or Plan of Operations.")

(d) Productive Wells and Acreage.

The table below shows, as of June 30, 1995, the
approximate number of gross and net producing oil and gas wells
by state and their related developed acres owned by the Company.
Calculations include 100% of wells and acreage owned by Delta and
by Amber. Productive wells are producing wells capable of
production, including shut-in wells. Developed acreage consists
of acres spaced or assignable to productive wells.

Oil (3) (4) Gas (3) (4) Developed Acres (4)
Gross (1) Net (1) Gross (1) Net (2) Gross (1) Net (2)

Texas 4 1.28 0 0 1,558 393
Colorado 9 1.03 4 4 1,240 744
Oklahoma(6) 1 .056 60 4.57 24,153 1,809
Kansas 2 .29 0 0 120 39
16 2.65 64 8.57 27,071 2,985

(1) A "gross well" or "gross acre" is a well or acre in which a
working interest is held. The number of gross wells or acres is
the total number of wells or acres in which a working interest is
owned.

(2) A "net well" or "net acre" is deemed to exist when the sum
of fractional ownership interests in gross wells or acres equals
one. The number of net wells or net acres is the sum of the
fractional working interests owned in gross wells or gross acres
expressed as whole numbers and fractions thereof.

(3) All of the wells classified as "oil" wells are also
productive of various amounts of natural gas.

(4) See "Oil and Gas Reserves" below for reserve data.

(5) The Company also owns interests in additional wells in West
Virginia for which no reserves are reported because the wells are
only marginally profitable. These wells are not reflected in the
table above.

(6) Includes acreage which contains proved undeveloped reserves
as a result of potential increased density drilling and
development of additional zones within certain wells.

(e) Undeveloped Acreage.

At June 30, 1995, the Company held undeveloped acreage
by state as set forth below:

Undeveloped Acres (1) (2) (3)

Location Gross Net

California (3) 50,805 4,244

Colorado 35,773 29,645

Oklahoma 3,360 271

New Mexico 2,230 1,115
TOTAL 92,168 35,275

(1) Undeveloped acreage is considered to be those lease acres on
which wells have not been drilled or completed to a point that
would permit the production of commercial quantities of oil and
gas, regardless of whether such acreage contains proved reserves.

(2) Includes acreage owned by Amber.

(3) Consists of Federal leases offshore California near Santa
Barbara.

(f) Drilling Activity

During the periods indicated, the Company drilled or
participated in the drilling of the following productive and
nonproductive Exploratory and Development Wells:

Year Ended Six Months Ended Year Ended
June 30, 1995 June 30,1994 December 31,1993
Gross Net Gross Net Gross Net

Exploratory Wells(1):
Productive:
Oil. . . . . . . . . 0 .000 0 .000 2 .118
Gas. . . . . . . . . 1 .056 1 .056 3 .307
Nonproductive. . . . . 1 .125 0 .000 0 .000
Total. . . . . . . . . 2 .181 2 .056 5 .425

Development Wells(1):.
Productive:
Oil. . . . . . . . . 2 .112 0 .000 0 .000
Gas. . . . . . . . . 4 .186 0 .025 3 .045
Nonproductive. . . . 2 .112 0 .000 0 .000
Total. . . . . . . . . 8 .410 1 .025 3 .045

Total Wells(1):
Productive:
Oil. . . . . . . . . 2 .112 0 .000 2 .118
Gas. . . . . . . . . 5 .242 2 .081 6 .352
Nonproductive. . . . . 3 .237 0 .000 0 .000
Total Wells. . . . . 10 .591 2 .081 8 .47

(1) Does not include wells in which the Company had only a
royalty interest.

ITEM 3. LEGAL PROCEEDINGS

The Company is not engaged in any material pending legal
proceedings to which the Company or its subsidiaries are a party
or to which any of its property is subject.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

Not applicable.

PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS

(a) Market Information.

Until Delta was listed on NASDAQ on June 11, 1993,
Delta had only limited trading in the over-the-counter market.
Delta stock is not traded in certain states and will not be until
and unless Delta is able to qualify, exempt or register its
stock. At present Delta's common stock trades under the symbol
"DPTR" on NASDAQ. To date, trading volumes have been relatively
light. The following quotations reflect inter-dealer prices,
without retail mark-up, mark-down or commission and may not
represent actual transactions.

Quarter Ended High Bid Low Bid

September 30, 1993 6.75 4.75
December 31, 1993 5.87 3.50
March 31, 1994 5.75 3.62
June 30, 1994 5.25 4.37
September 30, 1994 6.00 4.75
December 31, 1994 6.87 5.75
March 31, 1995 6.87 6.75
June 30, 1995 6.75 6.00

On October 9, 1995 the closing price of the Common
Stock was $7.75 bid and $8.00 asked.

(b) Approximate Number of Holders of Common Stock.

The number of holders of record of the Company's
Common Stock at September 30, 1995 was approximately 800 which
does not include an unknown number of additional holders whose
stock is held in "street name".

The Company has not paid dividends on its stock and
does not expect to do so in the foreseeable future.

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
OPERATIONS

Background

In October 1992, Delta concluded a series of
agreements with Underwriters Financial Group, Inc. ("UFG")
(collectively, the "UFG Agreement") to participate in a plan to
reorganize and recapitalize Delta (the "Plan of Reorganization").
Prior to the reorganization, UFG owned approximately 89% of the
outstanding shares of Delta's common stock. Under the terms of
the UFG Agreement, UFG transferred its oil and gas properties and
certain other related assets to Delta as a contribution to the
capital of Delta. The assets transferred included producing and
non-producing oil and gas properties, accounts receivable, oil
field equipment, and office furniture and equipment. UFG also
transferred 4,110,660 shares of common stock of Amber to Delta.
The shares transferred represented an 88.09% interest in Amber.

Also in connection with the Plan of Reorganization,
Delta issued 1,030,000 shares of common stock to Messrs. Burdette
A. Ogle and Ronald Heck (collectively, "Ogle") in exchange for
their working interests in two federal offshore California oil
and gas units and 167,317 shares of common stock of Amber.

The oil and gas properties and shares of common
stock of Amber received from Ogle were recorded at Ogle's
predecessor cost of approximately $45,000. The assets
transferred to Delta by UFG were recorded at the predecessor cost
of the assets to UFG, as adjusted. UFG followed the full cost
method of accounting for its oil and gas properties. The
predecessor cost of the producing properties transferred was
adjusted to conform to the Company's policy of accounting for oil
and gas properties under the successful efforts method of
accounting. The predecessor cost of each oil and gas property
was further adjusted, if necessary, to reduce the amount recorded
to the estimated fair value of the oil and gas reserves
attributable to the property, if less than the adjusted
predecessor cost of the property.

Certain of the oil and gas properties transferred
had been pledged by UFG to secure existing indebtedness, which
indebtedness remained an obligation of UFG under the terms of the
UFG Agreement. To the extent the existing secured indebtedness
on a particular property exceeded its adjusted predecessor cost,
the transfer of the property was recorded in the accompanying
financial statements at its adjusted predecessor cost and a
liability was recorded in an amount equal to the asset recorded.
To the extent the existing secured indebtedness on a particular
property was less than the adjusted predecessor cost, the
property was recorded at its adjusted predecessor cost, the
related liability was recorded and the net amount was reflected
as a capital contribution by UFG. Subsequent payments by UFG
which reduce the liabilities recorded by the Company are recorded
as a reduction of the liability and a capital contribution.

3,357,003 shares of common stock of Amber
transferred to the Company by UFG are pledged to secure a note
payable to Snyder Oil Corporation (the "Snyder Note"). The
balance due on the note payable at the time of the transfer of
the Amber shares to Delta of $2,292,456 was recorded as a
liability of Delta because of the uncertainty of the ability of
UFG to fulfill its obligations under the note.

Liquidity and Capital Resources.

At June 30, 1995, the Company had a working capital
deficit of $3,815,047 compared to a working capital deficit of
$3,473,977 at June 30, 1994. The Company's working capital
deficit is in part a result of the note payable to Snyder Oil
Corporation ("Snyder") of $2,232,855 which is non recourse to
Delta and payable by its former parent, UFG. Although there is
no assurance that it will do so, the Company expects UFG to
discharge this note and the other obligations within the next
twelve months through the sale of the stock it owns in Delta
and/or through other means, at which time the Company's working
capital deficit will be correspondingly reduced. If UFG were
unable to pay the promissory note payable to Snyder, Delta's
ownership interest in Amber could be reduced to 19.74%. Although
there is no assurance that it would succeed in doing so, Delta
would attempt to make other arrangements to discharge the
promissory note and thereby retain the Amber shares securing the
promissory note (see "Future Operations" below). Nevertheless,
although the loss of these Amber shares would significantly
reduce the Company's oil and gas revenues and reserves
attributable to its ownership of Amber (see "Future Operations"
below), the properties owned directly by Delta and the revenues
therefrom would not be affected.

The Company's current liabilities also include
royalties payable in suspense of $241,233 at June 30, 1995 which
represent the Company's estimate of royalties payable on
production attributable to Amber's interest in certain wells in
Oklahoma, including production prior to the acquisition of Amber.
The Company is attempting to identify the royalty owners and
calculate the amounts owed to each owner, which it expects will
require some time. To date, no significant claims have been
asserted against Amber by royalty owners for amounts due for
prior production. The Company's current liabilities also include
royalties payable on recoupment gas produced on certain wells
owned by Amber of $669,841 at June 30, 1995. The Company is
awaiting the outcome of litigation in various courts which may
impact the method of calculating the Company's obligation for
royalties payable on recoupment gas. To date no claims have been
asserted against Amber by royalty owners for royalties due on
recoupment gas produced. The Company believes that the operators
of the affected wells have paid some of the royalties on behalf
of the Company and have withheld such amounts from revenues
attributable to the Company's interest in the wells. The Company
has contacted the operators of the wells in an attempt to
determine what amounts the operators have paid on behalf of the
Company over the past five years, which amounts would reduce the
amounts owed by the Company. To date the Company has not
received information adequate to allow it to determine the
amounts paid by the operators. During the year ended June 30,
1995, the Company settled its recoupment gas obligation. As a
result of the recoupment settlement, subsequent royalty
obligations are the responsibility of the operator.

The Company believes that it is unlikely that all
claims that might be made for payment of royalties payable in
suspense or for recoupment royalties payable would be made at one
time. Further, Amber, rather than Delta, would be directly
liable for payment of any such claims. The Company believes,
although there can be no assurance, that it may ultimately be
able to settle with potential claimants for less than the amounts
recorded for royalties payable in suspense and recoupment
royalties payable.

The Company's current liabilities include amounts
due to stockholders for consulting fees of $162,500 at June 30,
1995. Subsequent to year end, the consulting fee payable was paid
in full. The Company's current liabilities also include a note
payable to a third party that was paid subsequent to year end.

On November 18, 1994, the Company entered into an
agreement with El Paso Natural Gas Company ("El Paso") under
which Amber agreed to transfer to El Paso Amber's interest in
four wells and the associated acreage in complete satisfaction of
Amber's recoupment gas obligation. As a result of this
agreement, the Company is no longer obligated to El Paso for
recoupment gas from the remaining wells subject to the recoupment
agreement. As a result of this transaction, the Company recorded
an extraordinary gain of $493,850.

In May 1995, a portion of the convertible note
payable was transferred from a third party to Bion Technologies,
Inc. During June 1995, the Company issued 461,002 restricted
shares of the Company's common stock in satisfaction of the note
payable and related accrued interest. In connection with the
conversion, Aleron H. Larson and Roger A. Parker, officers of the
Company, entered into voting agreements granting them the right
to vote the 461,002 shares of common stock until 2004.

The Company estimates its capital expenditures for
onshore proved undeveloped properties to be approximately
$700,000 for the year ended June 30, 1996. However, the Company
is not obligated to participate in future drilling programs and
will not enter into future commitments to do so unless management
believes the Company has ability to fund such projects.

The Company's working interest share of the future
estimated development costs relating to its offshore California
proved undeveloped properties approximate $163 million. No
significant amounts are expected to be incurred during fiscal
1996 and $2.85 and $3.62 million are expected to be incurred
during fiscal 1997 and 1998, respectively. Based on current
engineering estimates the Company's share of future development
costs are expected to be $64 million through fiscal year 2002,
after which the production revenue is expected to exceed both the
operating and annual development costs. The amounts required for
development of these proved undeveloped reserves are so
substantial relative to the Company's present financial
resources, the Company may ultimately determine to farmout all or
a portion of its interest. If it were to farmout its interests,
the Company's share of proved reserves would be decreased
substantially. Alternatively, the Company may pursue other
methods of financing, including selling equity or debt
securities. There can be no assurance that the Company can
obtain any such financing. If the Company were to sell
additional equity securities to finance the development of the
properties, the existing common shareholders' interest would be
diluted significantly.

The Company received the proceeds from the exercise
of options to purchase shares of its common stock for $269,963
during the year ended June 30, 1995, $252,700 during the six
months ended June 30, 1994 and $98,750 during the year ended
December 31, 1993. Subsequent to year end, the Company completed
a sale of 231,000 shares of the Company's common stock to third
parties for $750,000 with net of proceeds to the Company of
$675,000 after payment of certain fees. Under the purchase
agreement the Company has committed to register the shares within
30 days or increase the number of shares by 25,000 with an
increase of an additional 5,000 shares each 30 days thereafter
until the expiration of six months after which the Company has
agreed to repurchase all shares issued for $750,000 and to
deliver a promissory note therefore, with interest payable at 15%
per annum from the date funds were received.

The Company expects to raise additional capital by
selling its common stock in order to fund its capital
requirements for its portion of the costs of the drilling and
completion of development wells on its proved undeveloped
properties during the next twelve months. There is no assurance
that it will be able to do so or that it will be able to do so
upon terms that are acceptable. The Company does not currently
have a credit facility with any bank and it has not determined
the amount, if any, that it could borrow against its existing
properties. The Company will continue to explore additional
sources of both short-term and long-term liquidity to fund its
working capital deficit and its capital requirements for
development of its properties including establishing a credit
facility, sale of equity or debt securities and sale of
non-strategic properties. Many of the factors which may affect
the Company's future operating performance and liquidity are
beyond the Company's control, including oil and natural gas
prices and the availability of financing.

After evaluation of the considerations described
above the Company believes that its cash flow from its existing
producing properties, proceeds from the sale of producing
properties, and other sources of funds will be adequate to fund
its operating expenses and satisfy its other current liabilities
over the next year or longer.

Results of Operations

Net Earnings (Loss). The Company's net loss for
the year ended June 30, 1995 was $3,573,317, net of a $493,850
extraordinary gain on the settlement of the Company's recoupment
gas obligation compared to a net loss of $1,310,047 for the six
months ended June 30, 1994 and a net loss of $1,774,473 for the
year ended December 31, 1993. The loss for the year ended June
30, 1995 included stock option expense of $1,508,750 for options
granted under the Company's Incentive Plan to two officers to
each purchase 177,500 shares of common stock at $1.25. In
addition, the loss for the year ended June 30, 1995 also included
a $250,000 minimum royalty to a related party as part of the
acquisition of three proved undeveloped offshore Santa Barbara,
California federal oil and gas units. The loss for the year
ended June 30, 1995 also included $559,445 for abandoned and
impaired properties. Included in the $559,445 is a write down of
its oil and gas properties of $411,791 to comply with SFAS 121
"Accounting for the impairment of long-lived assets and
long-lived assets to be disposed of". The write down of the
Company's producing oil and gas properties are primarily due to
the depressed natural gas prices. The loss for the six months
ended June 30, 1994 included $233,363 for abandoned and impaired
properties and a write-off of advances to UFG of $148,864. The
loss for the years ended December 31, 1993 included $72,366 for
abandoned and impaired properties. In addition, the loss for
the year ended December 31, 1993 included a write off of
investments and related receivables of $350,200 relating to the
Company's investments in Rio Pecos Transmission Company, LLC and
Engas Corporation.

Revenue. Total revenue for the year ended June 30,
1995 was $1,428,907 compared to $740,280 for the six months
ended June 30, 1994 and $1,923,998 for the year ended December
31, 1993. Oil and gas sales for the year ended June 30, 1995
were $1,272,989 compared to $687,811 for the six months ended
June 30, 1994 and $1,873,088 for the year ended December 31,
1993. The decrease in oil and gas sales during the year ended
June 30, 1995 resulted from a decline in the average price for
natural gas and the normal decline in production rates from the
Company's wells. Revenue from oil and gas sales includes
amortization of the Company's recoupment gas obligation of
$167,009 for the year ended June 30, 1995, $255,859 for the six
months ended June 30, 1994 and $632,116 for the year ended
December 31, 1993. Revenue was recorded as the recoupment gas
was produced and delivered to the gas purchaser. The amount of
revenue recorded varied with the amount of gas recouped by the
purchaser and the current price of gas. On November 18, 1994,
the Company entered into an agreement with El Paso Natural Gas
Company under which Amber agreed to transfer to El Paso Amber's
interest in four wells and the associated acreage in complete
satisfaction of the obligation. As a result of this agreement,
the Company is no longer obligated to El Paso for recoupment gas
from the remaining wells originally subject to the recoupment
agreement.

Production volumes and average prices received
(excluding amounts attributable to recoupment gas produced) for
the year ended June 30, 1995, the six months ended June 30, 1994
and the year ended December 31, 1993 are as follows:

Six Months
Year Ended Ended Year Ended
June 30, June 30, December 31,
1995 1994 1993

Production:

Oil (barrels) 12,261 7,125 13,259
Gas (Mcf) 582,844 173,021 490,868

Average Price:

Oil (per barrel) $16.34 $13.61 $21.38
Gas (per Mcf) $ 1.55 $1.94 $1.95

Lease Operating Expenses. Lease operating expenses
for the year ended June 30, 1995 were $369,683 compared to
$239,948 and $497,339 for the six months ended June 30, 1994 and
year ended December 31, 1993, respectively. On a MCF equivalent
basis, production expenses and taxes were $.48 per Mcf equivalent
during the year ended June 30, 1995 compared to $.66 and $.61,
respectively, per Mcf equivalent for the six months ended June
30, 1994 and the year ended December 31, 1993. The decline in
lease operating expenses on an equivalent Mcf basis can be
attributed to the decrease in recoupment royalty expense
resulting from the settlement of the recoupment gas obligation.

Depreciation and Depletion Expense. Depreciation
and depletion expense for the year ended June 30, 1995 was
$542,979 compared to $398,697 and $746,377, respectively, for the
six months ended June 30, 1994 and year ended December 31, 1993.
On a MCF equivalent basis, the depletion rate was $.71 per Mcf
equivalent during the year ended June 30, 1995 compared to $1.11
and $.91 per Mcf equivalent, respectively, for the six months
ended June 30, 1994 and year ended December 31, 1993. The
decrease in the depletion rate for 1995 is primarily a result of
the settlement of the recoupment gas obligation.

Exploration Expenses. Exploration expenses consist
of geological and geophysical costs and lease rentals.
Exploration expenses were $23,811 for the year ended June 30,
1995 compared to $86,804 and $70,883, respectively, for the six
months ended June 30, 1994 and year ended December 31, 1993.

Abandonment and Impairment of Oil and Gas
Properties. The Company recorded an expense for the abandonment
and impairment of oil and gas properties for the year ended June
30, 1995 of $559,445, including $411,791 recorded upon the
adoption of SFAS 121, compared to $233,363 and $72,366,
respectively, for the six months ended June 30, 1994 and year
ended December 31, 1993. The write down of the Company's
producing oil and gas properties was primarily due to the
depressed natural gas prices.

General and Administrative Expenses. General and
administrative expense for the year ended June 30, 1995 was
$1,589,042 compared to $587,939 and $1,014,668, respectively, for
the six months ended June 30, 1994 and years ended December 31,
1993. General and administrative expenses increased an
annualized basis from 1993 to 1994 primarily because of the
Company's increased level of activity beginning in April of 1993
after the Company's management resigned as management of the
Company's former parent, UFG, and became employed by Delta on a
full time basis. General and administrative expense increased
from an annualized basis from 1994 to 1995 primarily as a result
of additional legal and accounting costs relating to the
restatement of the Company's financial statements for the change
in method of accounting for oil and gas properties to the
successful efforts method from the full cost method along with an
increase in broker and shareholder relations expense in an
attempt to create a more liquid trading market for the Company's
common stock.

Stock Option Expense. On September 21, 1994, the
Company's Incentive Plan Committee granted to each of two
officers options to purchase 177,500 shares of common stock at
$1.25 per share under the Incentive Plan. The options are
immediately exercisable and expire September 21, 2004. Also on
September 21, 1994, each officer surrendered to the Company
177,500 warrants to purchase shares at $1.25 per share owned by
them. Stock option expense of $1,508,750 has been recorded for
the year ended June 30, 1995 based on the difference between the
option price and the quoted market price on the date of grant for
the options granted.

Minimum Royalty To Related Party. The minimum
royalty to related party represents the minimum royalty paid in
1995 pursuant to the terms of the agreement with to acquire
interests in three proved undeveloped offshore Santa Barbara,
California federal oil and gas units. The purchase price of
$8,000,000 is represented by a production payment reserved in the
documents of Assignment and Conveyance and is payable out of
three percent (3%) of the oil and gas production from the working
interests with a requirement for minimum annual payment. Delta
paid Ogle $250,000 in 1995, is to pay an additional $250,000 in
1996 and a minimum of $350,000 annually thereafter until the
earlier of: 1) when the production payments accumulate to the
$8,000,000 purchase price; 2) when 80% of the ultimate reserves
of any lease have been produced; or 3) 30 years from the date of
the conveyance.

Interest on Recoupment Gas Obligation Expense.
Imputed interest expense on the recoupment gas obligation was
$113,285 for the year ended June 30, 1995 and $99,603 and
$443,676, respectively, for the six months ended June 30, 1994
and year ended December 31, 1993.

Interest on Notes Payable. Interest on notes
payable was $539,079 for the year ended June 30, 1995 and
$255,109 and $502,962, respectively, for the six months ended
June 30, 1994 and year ended December 31, 1993. Interest expense
includes interest on the Company's convertible note payable
issued in November 1992 and interest on the Snyder Note.
Although the Company is not obligated to make payments on the
Snyder Note, the Company records interest expense pursuant to the
terms of the note. This note is non-recourse to the Company and,
although there is no assurance that it will do so, the Company
expects that its former parent, UFG, will discharge this note
during the next twelve months thereby eliminating interest
expense on this note.

On May 22, 1995, a portion of the convertible
promissory note was transferred to Bion. During June 1995, the
entire note and related accrued interest was converted into
461,002 restricted shares of the Company's common stock. In
connection with the conversion, Aleron H. Larson, Jr. and Roger
A. Parker, officers of the Company, entered into voting
agreements granting them the right to vote the 461,002 shares of
common stock until 2004.

Future Operations

The Company believes there is risk that UFG will be
unable to timely repay the Snyder Note which is currently in
default, and that the encumbered portion of the Amber shares
owned by Delta could be lost to Delta unless Delta is able to
make other arrangements to allow it to keep the shares and/or to
realize the equivalent value from UFG. Such other arrangements
might include legal action by Delta against UFG. In addition,
the Company holds certificates representing 888,063 shares of
Delta common stock which are in the name of UFG as collateral
pending the discharge of UFG's obligation to Snyder Oil
Corporation. As a result, the Company could cancel such
collateral shares and reduce the number of shares outstanding or
attempt to resell some or all of these shares and use the
proceeds therefrom to pay the debt owed by UFG encumbering the
Amber shares.

The loss of the encumbered Amber shares would
reduce Delta's ownership interest in Amber to 19.74%. Amber's
oil and gas revenue during the year ended June 30, 1995 amounted
to approximately $730,000 which constituted approximately 57% of
the Company's consolidated oil and gas revenues Amber's proved oil
and gas reserves attributable to its onshore properties are estimated
to be 5,100 Bbls of oil and 1.91 Bcf of gas. Amber's proved
undeveloped oil and gas reserves attributable to its offshore
California properties are estimated to be 10,582,000 Bbls of oil
and 12.96 Bcf of gas. A loss of the encumbered Amber shares
would significantly reduce the Company's oil and gas revenue and
reserves and have a material effect on the operations of the
Company (see Note 4 to the "Consolidated Financial Statements").

ITEM 7. FINANCIAL STATEMENTS

Financial Statements and Supplementary Data are
included herein beginning on page F-1.

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE

None.

PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE
ACT.

The following table sets forth the names, ages and
positions held with respect to each Director and Executive
Officer of the Company who served during the period ended June
30, 1995, along with the period served as a Director.

Name Age Position(s) Period of
Service

Aleron H. Larson, Jr. 50 Chairman of the Board, May 1987 to
Chief Executive Officer Present
Secretary, Treasurer
and a Director

Roger A. Parker 33 President and May 1987 to
a Director Present

Terry D. Enright 46 Director November 1987
to Present

Don Mettler 71 Director May 1993 to
Present

All directors will hold office until the next annual meeting
of shareholders. There are no arrangements or understandings
between any director of the Company and any other person or
persons pursuant to which such director was or is to be selected
as a director.

All officers of the Company will hold office until the next
annual meeting of the Company. There is no arrangement or
understanding between any such officer or any person pursuant to
which such officer is to be selected as an officer of the
Company. There is no employee who is not a designated officer or
director who is expected to make any significant contribution to
the business of the Company.

The following set forth biographical information as to the
business experience of each current officer and director of the
Company.

Aleron H. Larson, Jr., age 50, has operated as an investor
and an independent in the oil and gas industry individually and
through public and private ventures since 1978. From July of
1990 through March 31, 1993, Mr. Larson served as the Chairman,
Secretary, C.E.O. and a Director of Underwriters Financial Group,
Inc. ("UFG") (formerly Chippewa Resources Corporation), a public
company listed on the American Stock Exchange which presently
owns approximately 22% of the outstanding equity securities of
Delta. Mr. Larson submitted his resignation from all positions
with UFG effective March 31, 1993. Mr. Larson serves as
Chairman, CEO, Secretary, Treasurer and Director of Amber, a
public oil and gas company which was a majority-owned subsidiary
of UFG from August 1991 until October 1992, at which time it
became a majority-owned subsidiary of Delta. He has also served,
since 1983, as the President and Board Chairman of Western
Petroleum Corporation, a public Colorado oil and gas Company
which is now inactive. During part of 1989 and part of 1990, he
served as a Director of Apex Operating Company, Inc. and P & G
Exploration (formerly Texco Exploration, Inc.). Mr. Larson has
been principally involved in the oil and gas business since 1978.
Mr. Larson practiced law in Breckenridge, Colorado from 1971
until 1974. During this time he was a member of a law firm,
Larson & Batchellor, engaged primarily in real estate law, land
use litigation, land planning and municipal law. In 1974, he
formed Larson & Larson, P.C., and was engaged primarily in areas
of law relating to securities, real estate, and oil and gas until
1978. Mr. Larson received a Bachelor of Arts degree in Business
Administration from the University of Texas at El Paso in 1967
and a Juris Doctor degree from the University of Colorado in
1970.

Roger A. Parker, age 33, served as the President, a Director
and Chief Operating Officer of Underwriters Financial Group from
July of 1990 through March 31, 1993. Mr. Parker submitted his
resignation from all positions with UFG effective March 31, 1993.
Mr. Parker also serves as President, Chief Operating Officer and
Director of Amber. He also serves as a Director and Executive
Vice President of P & G Exploration, Inc., a private oil and gas
company (formerly Texco Exploration, Inc.). Mr. Parker has also
been the President and a Director of Apex Operating Company, Inc.
since its inception in 1987. He has operated as an investor and
an independent in the oil and gas industry individually and
through public and private ventures since 1982. He was at
various times, from 1982 to 1989, a Director, Executive Vice
President, President and Shareholder of Ampet, Inc. He was a
Director of Universal Exploration, Inc., from 1986 to 1989. He
attended the University of Colorado where he received a Bachelor
of Science in Mineral Land Management in the spring of 1983. He
is a member of the Rocky Mountain Oil and Gas Association and the
National Federation of Independent Businesses.

Terry D. Enright, age 46, has been in the oil and gas
business since 1980. Mr. Enright was a reservoir engineer until
1981 when he became Operations Engineer and Manager for Tri-Ex
Oil & Gas. In 1983, Mr. Enright founded and is President and a
Director of Terrol Energy, a private, independent oil company
with wells and operations primarily in the Central Kansas Uplift
and D-J Basin. In 1989, he formed and became President and a
Director of a related company, Enright Gas & Oil, Inc. Since
then, he has been involved in the drilling of prospects for
Terrol Energy, Enright Gas & Oil, Inc., and for others in
Colorado, Montana and Kansas. He has also participated in
brokering and buying of oil and gas leases and has been
retained by others for engineering, operations, and general oil
and gas consulting work. Mr. Enright received a B.S. in
Mechanical Engineering with a minor in Business Administration
from Kansas State University in Manhattan, Kansas in 1972, and
did graduate work toward an MBA at Wichita State University in
1973. He is a member of the Society of Petroleum Engineers and a
past member of the American Petroleum Institute and the American
Society of Mechanical Engineers.

Don E. Mettler, age 71, served as a Director and Audit
Committee member of Underwriters Financial Group, Inc. (formerly
Chippewa Resources Corporation) from June 1991 until March 31,
1993. Mr. Mettler has been active in the oil and gas field for
over 30 years. He received a B.S. Degree in Geology/Engineering
from Kansas State University in 1948, and a M.S. Degree in
Geology from Kansas University in 1955. From 1951 to 1961, Mr.
Mettler was a Geologist and District Geologist at Shell Oil
Company. From 1961-1963 he was a Geologist and then Chief
Geologist from 1963 to 1968 for Davis Oil Co., Denver, Colorado.
Mr. Mettler served as Director/Vice President of Exploration for
Petro Lewis Corporation, Denver, Colorado from 1968 to 1973.
Between 1971 to 1986, Mr. Mettler also served as Chairman of
Trustees at Randell-Moore Accelerated Schools. Between 1975-1978,
Mr. Mettler was Vice President of Exploration for Canus
Petroleum, Inc., Denver, Colorado. From 1978 to 1985, Mr. Mettler
was a Chairman/Vice President of Exploration for Tri-Ex Oil &
Gas, Inc., Denver, Colorado. From 1982 to the present, Mr.
Mettler has served as Chairman/President and principal owner of
Air Carrier International Flight Academy, Denver, Colorado, a
training school for airline pilots.

There is no family relationship among or between any of the
Directors.

Messrs. Enright and Mettler serve as the audit committee and
as the compensation committee. Messrs. Enright and Mettler also
constitute the Incentive Plan Committee for the Delta 1993
Incentive Plan for the Company.

ITEM 10. EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION

ANNUAL COMPENSATION
NAME AND
PRINCIPAL
POSITION PERIOD SALARY BONUS

Aleron H. Larson, Jr. Year Ended
CEO, Director 6/30/95 $180,000 $ -0-
6 mos. ended
6/30/94 90,000 -0-
Year 1993 135,000(2) -0-
Year 1992 -0- -0-

Roger A. Parker Year Ended
President, 6/30/95 $180,000 $ -0-
Director 6 mos. ended
6/30/94 90,000 -0-
Year 1993 135,000(2) -0-
Year 1992 -0- -0-

LONG TERM
COMPENSATION
AWARDS

SECURITIES
UNDERLYING
NAME AND OPTIONS/ ALL OTHER
PRINCIPAL POSITION PERIOD SARS COMPENSATION

Aleron H. Larson, Jr. Year Ended
CEO, Director 6/30/95 177,500(4) $ -0-
6 mos. ended
6/30/94 -0- -0-
Year 1993 100,000(3) -0-
Year 1992 -0- -0-

Roger A. Parker Year Ended
President, 6/30/95 $177,500(4) $6,338
Director 6 mos. ended
6/30/94 -0- -0-
Year 1993 100,000(3) -0-
Year 1992 -0- -0-

(1) This table does not include compensation received during
these periods by Messrs. Larson and Parker as officers and
directors of UFG, the former parent of Delta.

(2) Includes reimbursement of certain expenses.

(3) Options to purchase shares of common stock at $3.75/share
until June 9, 2003 under the Delta 1993 Incentive Plan.

(4) Options to purchase 177,500 shares each of common stock @
$1.25/share until September 21, 2004 were granted to Aleron H.
Larson, Jr. and Roger A. Parker on September 21, 1994 under the
Delta 1993 Incentive Plan. On that date, the same parties each
surrendered for cancellation an equal number of Class D warrants
to purchase shares at $1.25 per share until August 8, 1995.

(5) These amounts represent imputed interest on a non interest
bearing advance to this officer with interest imputed at eight
percent (8%) per annum.

AGGREGATED OPTIONS/EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/VALUES

Shares Acquired Realized
Name On Exercise (#) $

Aleron H. Larson, Jr. -0- -0-
CEO

Roger A. Parker -0- -0-
President
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options Options
at FY-End (#) at FY-End ($)

Exercisable/ Exercisable/
Name Unexercisable Unexercisable

Aleron H. Larson, Jr. 284,500 $842,545/0
CEO

Roger A. Parker 284,500 842,545/0
President

(1) Includes 177,500 Options to purchase common stock exercisable
at $1.25 per share until September 21, 2004; 7,000 Class F
warrants to purchase common stock exercisable at $2.50 per share
until August 8, 1995; 100,000 options to purchase common stock
exercisable at $3.75 per share until June 9, 2003. On September
21, 1994 the Company's Incentive Plan Committee granted Messrs.
Larson and Parker each 177,500 immediately exercisable options to
purchase Common Stock exercisable at $1.25 per share until
September 21, 2004, which options were granted under the
Company's 1993 Incentive Plan. Also on September 21, 1994,
Messrs. Larson and Parker each surrendered for cancellation
177,500 Class D warrants to purchase shares at $1.25 per share.

(a) Compensation of Directors.

Directors were not compensated for serving as directors or
for any services provided as directors during the period ended
June 30, 1995.

(b) Employment Contracts and Termination of Employment and
Change-in-Control Agreement.

On September 21, 1994, the Company's Compensation Committee
authorized the Company to enter into employment agreements with
the Company's Chairman and President which employment agreements
replaced and superseded the prior employment agreements with such
persons. (See Form 8-K dated September 21, 1994). During the
period ended June 30, 1994, the Chairman and President were
compensated pursuant to provisions in the Employment agreements
which were then in effect dated December 21, 1992. Under both the
previous and current employment agreements the Chairman and
President each received a salary of $180,000 per year. The
September 21, 1994 employment agreements have five year terms and
include provisions for cars, parking and health insurance. Terms
of the September 21, 1994 employment agreements also provide that
the employees may be terminated for cause but that in the event
of termination without cause or in the event of a change in
control of the Company, as defined in Delta's 1993 Incentive
Plan, then the employees will continue to receive the
compensation provided for in the employment agreements for the
remaining terms of the employment agreements.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL SHAREHOLDERS
AND MANAGEMENT

(a) Security Ownership of Certain Beneficial Owners:

The following table presents information concerning persons
known by management to own beneficially 5% or more of the
Company's issued and outstanding voting securities of the Company
at October 9, 1995.

Name and Address Amount and Nature
Title of of Beneficial of Beneficial Percent
Class (1) Owner Ownership of Class(2)

Common Stock Aleron H. Larson,Jr. 1,777,065 shares(3) 40.49%
555 17th St., #3310
Denver, CO 80202

Common Stock Roger A. Parker 1,762,645 shares(4) 40.16%
555 17th St., #3310
Denver, CO 80202

Common Stock Aleron H. Larson,Jr. 2,264,645 shares(5) 47.70%
& Roger A. Parker
(as a group)
555 17th St., #3310
Denver, CO 80202

Common Stock Underwriters Financial 888,063 shares(6) 22.04%
Group, Inc.
80 Maiden Lane
New York, NY 10038

Common Stock Burdette A. Ogle 885,264 shares(7) 21.44%
422 White Avenue, #331
Grand Junction, CO 81501

Common Stock Corporate Relations Group 310,546 shares 7.71%
1801 Lee Road, Suite 301
Winter Park, FL 32789

Common Stock LoTayLingKyur, Inc. 289,960 shares(8) 7.02%
1345 Spruce Street, Suite I
Boulder, CO 80302

Common Stock Pow Wow, Inc. 300,000 shares(9) 6.93%
101 E. Lawren Ct.
Fern Park, FL 32730

Common Stock Fondo de Adquisiciones 300,000 shares(10) 6.93%
E. Internacionales XL SA
Apartado 1474 - 1000
San Jose, Costa Rica

Common Stock Ronald Heck 250,000 shares 6.20%
Suite I
5464 Carpinteria Avenue
Carpinteria, CA 93013

(1) Delta has an authorized capital of 300,000,000 shares of
$.01 par value common stock of which 4,029,154 shares were issued
and outstanding as of October 9 1995. Delta also has an
authorized capital of 3,000,000 shares of $.10 par value
preferred stock. In addition, Delta had outstanding warrants and
options to purchase 1,187,000 shares at prices ranging from $1.25
per share to $11.00 per share: Additionally, Delta has
outstanding options which were granted to officers, employees and
consultant to purchase up to 970,375 shares of common stock at
prices from $1.25 to $9.75 per share.

(2) The percentage set forth after the shares listed for each
beneficial owner is based upon total shares outstanding of
4,029,154. The percentage set forth after each beneficial
owner is calculated as if any warrants and/or options owned
had been exercised by such beneficial owner and as if no other
warrants and/or options owned by any other beneficial owner had
been exercised. Warrants and options are aggregated without
regard to the class of warrant or option.

(3) Includes 142,500 shares owned by Mr. Larson's wife; 7,000
Options to purchase shares of common stock at $2.50 per share
until July 25, 2005; 100,000 options exercisable at a price of
$3.75 per share until June 9, 2003; 177,500 options exercisable
at a price of $1.25 per share until September 21, 2004; 75,000
options (granted subsequent to June 30, 1995) exercisable at a
price of $6.375 per share until August 30, 2005; and 888,063
shares owned by Underwriters Financial Group, Inc.; 191,042
shares owned by Bion Environmental Technologies, Inc.; 189,960
shares owned by LoTayLingKyur, Inc.; 3,000 shares owned by Willie
Lee Lipsey and 3,000 shares owned by the Woolworth Fund, Inc.,
for which Mr. Larson has shared voting power with Mr. Parker but
for which he has no investment power. The durations of the
voting agreements affecting the aforementioned shares voted by
Messrs. Larson and Parker (unless the shares are sold to
non-affiliates) are as follows: Underwriters Financial Group,
Inc. - until December 31, 2002; Bion Environmental Technologies,
Inc. - until June 30, 2004; LoTayLingKyur, Inc. - until March
17, 2004; Willie Lee Lipsey - until December 31, 1997; Woolworth
Fund, Inc. - until December 31, 1997.

(4) Includes 128,080 shares owned by Mr. Parker directly; 7,000 Options
to purchase shares of common stock at $2.50 per share until July 25,
2005; 100,000 options exercisable at a price of $3.75 per share
until June 9, 2003; 177,500 options exercisable at a price of
$1.25 per share until September 21, 2004; 75,000 options (granted
subsequent to June 30, 1995) exercisable at a price of $6.375 per
share until August 30, 2005 and 888,063 shares owned by
Underwriters Financial Group, Inc.; 191,042 shares owned by Bion
Environmental Technologies, Inc.; 189,960 shares owned by
LoTayLingKyur, Inc.; 3,000 shares owned by Willie Lee Lipsey and
3,000 shares owned by the Woolworth Fund, Inc., for which Mr.
Parker has shared voting power with Mr. Larson but for which he
has no investment power. The durations of the voting agreements
affecting the aforementioned shares voted by Messrs. Larson and
Parker (unless the shares are sold to non-affiliates) are as
follows: Underwriters Financial Group, Inc. - until December 31,
2002; Bion Environmental Technologies, Inc. - until June 30,
2004; LoTayLingKyur, Inc. - until March 17, 2004; Willie Lee
Lipsey - until December 31, 1997; Woolworth Fund, Inc. - until
December 31, 1997.

(5) Includes all warrants, options and shares referenced in
footnotes (3) and (4) above as if all warrants and options were
exercised and as if all resulting shares, including shares
covered by the above referenced voting agreements were voted
as a group.

(6) These shares are subject to the voting agreement referenced
in footnotes (3), (4) and (5) above.

(7) Includes 785,264 shares owned by Mr. Ogle directly and
warrants to purchase 100,000 shares of common stock at $8.00 per
share until August 31, 1999 with a call provision whereby the
Company may repurchase any unexercised warrants for an aggregate
sum of $1,000 after the Company stock has traded for $10.00 per
share or greater for 30 consecutive trading days.

(8) Includes 189,960 shares held of record, 50,000 shares of
common stock underlying a currently exercisable warrant to
purchase shares at $1.25, and 50,000 shares underlying a
currently exercisable option to purchase shares at $6.00.

(9) Includes 300,000 shares underlying Options which are
currently exercisable at $5.50 per share (as to 75,000 shares),
$6.60 per share (as to 75,000 shares), $7.70 per share (as to
50,000 shares), $8.80 per share (as to 50,000 shares) and
$11.00 per share (as to 50,000 shares), respectively, subject to
adjustment under certain circumstances.

(10) Includes 300,000 shares underlying Options which are
currently exercisable at $5.50 per share (as to 75,000 shares),
$6.60 per share (as to 75,00 shares), $7.70 per share (as to
50,000 shares), $8.80 per share (as to 50,000 shares) and
$11.00 per share (as to 50,000 shares), respectively, subject to
adjustment under certain circumstances.

(b) Security Ownership of Management:

Amount
and Nature
Title of Name of Beneficial of Beneficial Percent
Class (1) Owner Ownership of Class(2)

Common Stock Aleron H. Larson, Jr. 1,777,065 40.49%
shares (3)

Common Stock Roger A. Parker 1,762,645 40.16%
shares (4)

Common Stock Terry D. Enright 21,200 00.52%
shares (5)

Common Stock Don E. Mettler 10,000 00.25%
share (6)

Common Stock Officers and Directors 2,295,845 48.11%
as a Group (4 persons) shares (7)

(1) See Note (1) to preceding table
(2) See Note (2) to preceding table
(3) See Note (3) to preceding table
(4) See Note (4) to preceding table
(5) Includes 5,000 shares owned by Mr. Enright directly and 1,200
shares owned by Enright Gas & Oil, Inc., a private oil and gas
company owned by Mr. Enright and his wife; includes 5,000 Class
D Warrants to purchase shares of common stock at $1.25 per share
until the underlying shares are registered, and includes 10,000
Class I warrants to purchase stock at $3.50 per share until June
9, 2003.
(6) Includes 10,000 Class I warrants to purchase stock at $3.50
per share until June 9, 2003.
(7) Includes 888,063 shares owned by UFG ; 191,042 shares owned
by Bion Environmental Technologies, Inc.; 189,960 shares owned by
LoTayLingKyur, Inc.; 3,000 shares owned by Willie Lee Lipsey and
3,000 shares owned by the Woolworth Fund, Inc. as of September 7,
1995 which are voted by Messrs. Larson and Parker under voting
agreements described in footnotes (3) and (4) above and includes
all warrants and options referenced in footnotes (3), (4), (5)
and (6) above.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

(a) Background and Reorganization

During the period from July, 1990 through October, 1992,
in a series of transactions, UFG acquired 1,437,340 shares of
common stock of Delta which represented approximately 89% of the
then outstanding shares of common stock of Delta.

In October 1992, Delta concluded a series of agreements
with UFG (collectively, the "UFG Agreement") to participate in a
plan to reorganize and recapitalize Delta (the "Plan of
Reorganization"). Under the terms of the UFG Agreement, UFG
transferred its oil and gas properties and certain other related
assets to Delta as a contribution to the capital of Delta. The
assets transferred included producing and non-producing oil and
gas properties, accounts receivable, oil field equipment, and
office furniture and equipment. UFG also transferred 4,110,660
shares of common stock of Amber to Delta. The shares transferred
represented an 88.09% interest in Amber.

Also in connection with the Plan of Reorganization,
Delta issued 1,030,000 shares of common stock to Messrs. Burdette
A. Ogle and Ronald Heck (collectively, "Ogle") in exchange for
their working interests in two federal offshore California oil
and gas units and 167,317 shares of common stock of Amber.

The oil and gas properties and shares of common stock of
Amber received from Ogle were recorded at Ogle's predecessor cost
of approximately $45,000. The assets transferred to Delta by UFG
were recorded at the predecessor cost of the assets to UFG, as
adjusted. UFG followed the full cost method of accounting for
its oil and gas properties. The predecessor cost of the
producing properties transferred was adjusted to conform to the
Company's policy of accounting for oil and gas properties under
the successful efforts method of accounting. The predecessor
cost of each oil and gas property was further adjusted, if
necessary, to reduce the amount recorded to the estimated fair
value of the oil and gas reserves attributable to the property,
if less than the adjusted predecessor cost of the property.

Under the terms of the UFG Agreement, UFG agreed to
assume certain existing liabilities of Delta and Amber totaling
$1,325,175. On April 14, 1993, the Company entered into an
agreement with UFG (the "Clarification Agreement") which provided
for the issuance by UFG of a non-interest bearing promissory note
payable to the Company in the amount of $1,325,175 to evidence
UFG's obligation to repay the Company for the obligations UFG had
assumed under the UFG Agreement. The Clarification Agreement
also provided for the pledge of 556,289 shares of common stock of
the Company held by UFG as collateral for performance
under the promissory note and clarification and revision of
certain other provisions of the UFG Agreement. On February 23,
1995, the Company and UFG executed and entered into a letter
agreement dated February 22, 1995, under which Delta agreed to
convert $736,932 of principal and interest due from UFG under its
promissory note dated March 31, 1993 into 491,300 shares
of UFG common stock. In addition, UFG and Delta agreed that the
remaining $736,932 owed by UFG to Delta would be satisfied by the
transfer of 92,117 shares of Delta common stock from UFG to
Delta. Delta agreed to file a registration statement
covering the registration of the remaining 888,063 shares of
Delta common stock owned by UFG. Upon the effectiveness of
the registration statement, UFG will have the right to sell all
or some of the Delta shares covered by the registration statement
at a price of not less than $6.875 or the bid price on the
effective date, whichever is higher. An escrow will be
established for the 888,063 shares pending sale to assure that
the shares are sold pursuant to the terms of the agreement and to
assure that the first proceeds are used to discharge UFG's
promissory note to Snyder Oil Corporation (Snyder) thereby
releasing to Delta the Amber Resources Company common stock
held by Snyder as collateral for the promissory note.

Certain of the oil and gas properties transferred had
been pledged to secure existing indebtedness of UFG, which
indebtedness remained an obligation of UFG under the
terms of the UFG Agreement. To the extent the existing secured
indebtedness on a particular property exceeded its adjusted
predecessor cost, the transfer of the property was recorded in
the accompanying financial statements at its adjusted predecessor
cost and a liability was recorded in an amount equal to the asset
recorded. To the extent the existing secured indebtedness on a
particular property was less than the adjusted predecessor cost,
the property was recorded at its adjusted predecessor cost, the
related liability was recorded and the net amount was reflected
as a capital contribution by UFG. Subsequent payments by UFG are
recorded as a reduction of the liability and a capital
contribution.

3,357,003 shares of common stock of Amber transferred to
the Company by UFG are pledged to secure a note payable to Snyder
Oil Corporation (the "Snyder Note"). The balance due on the note
payable at the time of the transfer of the Amber shares to Delta
of $2,292,456 was recorded as a liability of Delta, because of
the uncertainty of the ability of UFG to fulfill its obligations
under the note.

The Company believes there is substantial risk that UFG
will be unable to timely repay the Snyder Note, which is
currently in default, and that the encumbered portion of the
Amber shares owned by Delta could be lost. The loss of the
encumbered Amber shares would reduce Delta's ownership interest
in Amber to 19.74%. Amber's revenue during the year ended
June 30, 1995 amounted to approximately $730,000 which
constituted approximately 57% of the Company's consolidated
revenues. Amber's proved oil and gas reserves attributable to
its onshore properties are estimated to be 5,100 Bbls of oil and
1.91 Bcf of gas. Amber's proved undeveloped oil and gas reserves
attributable to its offshore California properties are estimated
to be 10,582,00 Bbls of oil and 12.96 Bcf of gas. A loss of the
encumbered Amber shares would significantly reduce the Company's
oil and gas revenue and reserves and have a material
effect on the operations of the Company. (See "Financial
Statements"; Item 7 herein and "Management's Discussion and
Analysis or Plan of Operation"; Item 6.)

The UFG Agreement also contained provisions regarding
employment, voting agreements and consulting agreements for the
Company's executive officers, Aleron H. Larson, Jr. and Roger A.
Parker, and provided for the transfer to each of Messrs. Parker
and Larson 162,330 shares of the Company's outstanding common
stock owned by UFG in exchange for certain securities of UFG.
Subsequent to the reorganization, UFG owned 1,112,680 shares of
common stock.

Other Agreements/Transactions.

(a) On December 21, 1992, pursuant to the terms of an
agreement dated October 21, 1992 (see Exhibit 28.1 to Form 8-K
dated December 4, 1992), UFG executed a voting agreement (See
Form 8-K dated February 5, 1993; Exhibit 9.1) which voting
agreement gives to Aleron H. Larson, Jr., C.E.O. of Registrant,
and Roger A. Parker, President of Registrant, the right to vote
the shares of Registrant's common stock owned by UFG (unless sold
to non-affiliates in the public market) until December 31, 2002.

(b) Effective October 28, 1992, the Company entered
into a five year consulting agreement with Burdette A. Ogle and
Ronald Heck which provides for a fee of $10,000 per month. (See
Form 8-K dated December 4, 1992; Exhibit 28.2.) Messrs. Ogle and
Heck own beneficially 21.44% and 6.20%, respectively, of the
Company's outstanding common stock. To the Company's best
knowledge and belief, the $10,000 per month consulting fee paid
to Messrs. Ogle and Heck is comparable to those fees charged by
Messrs. Ogle and Heck to other companies owning interests in
offshore California for consulting services rendered to those
other companies with respect to their own offshore California
interests. It is the Company's understanding that, in the
aggregate, Mr. Ogle represents, as a consultant, a significant
percentage of all of the ownership interests in the various
properties that are located in the same general vicinity of the
Company's offshore California properties. Mr. Ogle also consults
and advises the Company relative to properties in areas other
than offshore California, relative to potential property
acquisitions and with respect to the Company's general oil and
gas business. It is the Company's opinion that the fees paid to
Messrs. Ogle and Heck for the services rendered are comparable to
fees that would be charged by similarly qualified non-affiliated
persons for similar services.

(c) As of June 30, 1995 the Company was owed $83,137 by
affiliates (Apex Operating Company, Inc. and P & G Exploration,
Inc.) of its president, Roger A. Parker. Mr. Parker, is an
officer, director and greater than 10% shareholder of both Apex
Operating Company and P & G Exploration, Inc. During the year
ended June 30, 1995, the balance Mr. Parker was indebted to the
Company was paid in full. No interest is being charged by the
Company on amounts owed by Mr. Parker and his affiliates.

(d) During the year ended December 31, 1993, Delta
acquired working interests in five gas wells, oil and gas leases
covering 11,862 gross and 6,920 net acres and options to lease an
additional 2,493 gross and 2,203 net acres in the Piceance Basin
in Mesa and Rio Blanco counties, Colorado. The terms of the
acquisition included certain drilling commitments related to the
options and the issuance by Delta of 38,803 shares of its
restricted common stock. One of the parties to the agreement was
Burdette A. Ogle, a shareholder and affiliate of the company, who
received 5,264 of these shares as his pro-rata portion based
solely upon his percentage interest in these properties.

(e) Effective February 25, 1994, Burdette A. Ogle
("Ogle"), a 21.44% shareholder of Delta, granted Delta an option
("Option") to acquire working interests in three proved
undeveloped offshore Santa Barbara California, federal oil
and gas units ("Interests"). On August 31, 1994, in an addendum
to the February 25, 1994 Agreement granting the Option, Ogle
agreed to extend the period during which the Option could be
exercised until January 3, 1995 in consideration of the issuance
by Delta to Ogle of warrants to purchase 100,000 shares
of common stock at a price of $8.00 per share until August 31,
1999 with a call provision whereby Delta may repurchase any
unexercised warrants for an aggregate sum of $1,000 after
the stock has traded at $10.00 per share or greater for thirty
consecutive trading days. On January 3, 1995, the Company
exercised its option to acquire these properties from Ogle.
Under the Purchase and Sale Agreement and related assignment and
conveyance of the interests, Ogle immediately assigned and
conveyed the Interests to Delta. The purchase price of
$8,000,000 is represented by a production payment reserved in the
documents of assignment and conveyance and is payable out of
three percent (3%) of the oil and gas production from the
Interests. Delta paid Ogle $250,000 in 1995, is to pay an
additional $250,000 in 1996 and a minimum of $350,000 annually
thereafter until: 1) the $8,000,000 purchase price was paid; 2)
80% of the ultimate reserves of any lease were produced; or 3) 30
years from the date of the conveyance. Delta already owned other
interests in these same federal units.

The terms of the transaction with Mr. Ogle were arrived at
through arms-length negotiations initiated by management of the
Company. The Company is of the opinion that the transaction is
on terms no less favorable to the Company than those which could
have been obtained from non-affiliated parties. No independent
determination of the fairness and reasonableness of the terms of
the transaction was made by any outside person. Management
believes the terms are comparable to terms that would have been
negotiated in a transaction with non-affiliates.

(f) Effective May 18, 1994, Delta entered into an
agreement ("Agreement")with LoTayLingKyur, Inc. ("LTLK") a copy
of which is attached as Exhibit 28.2 to the Form 8-K dated May
24, 1994. Under the Agreement, Delta consented to the assignment
of the convertible promissory note ("Note") dated November 30,
1992 given by Delta in favor of Stonehenge Capital Corporation
("SCC") from SCC to LTLK. In addition, LTLK executed a
Stock Voting Agreement with Delta relating to any Delta common
stock into which the promissory note might later convert under
which LTLK irrevocably appointed Aleron H. Larson, Jr. and Roger
A. Parker (the CEO and President, respectively, of Delta) as its
proxies to vote any and all such shares. The Stock Voting
Agreement also covers any stock that might be issued to LTLK
through the exercise by LTLK of its Class D warrant for 50,000
shares, which warrant has been transferred from SCC to LTLK.

(g) On September 21, 1994, the Company's Compensation
Committee authorized the Company to enter into employment
agreements with the Company's Chairman and President, which
employment agreements replaced and superseded the prior
employment agreements with such persons. (See Form 8-K dated
September 21, 1994). The September 21, 1994 employment
agreements have five year terms and include provisions for cars,
parking and health insurance. Terms of the September 21, 1994
employment agreements also provide that the employees may be
terminated for cause but that in the event of termination without
cause or in the event of a change in control of the Company, as
defined in Delta's 1993 Incentive Plan, then the employees will
continue to receive the compensation provided for in the
employment agreements for the remaining terms of the employment
agreements. (See Item 10; "Executive Compensation", herein.)

(h) On May 22, 1995, the Company was informed by
LoTayLingKyur, Inc. ("LTLK") that it had assigned a portion of
its convertible promissory note from the Company in the original
principal amount of $1,250,000 dated November 20, 1992 ("Note")
to Bion Environment Technologies, Inc. ("BION"). Thereafter, on
June 15, 1995 and on June 16, 1995, Bion and LTLK, respectively,
each agreed to convert its portion of the Note to the Company's
common stock. Copies of agreements relating to the conversions
are attached as Exhibits 99.3 and 99.4 to the Company's August
18, 1995 Form 8-K. As a result of the conversion, on July
7, 1995 the Company issued 192,160 shares of restricted common
stock to LTLK and on July 26, 1995 the Company issued 178,042
shares of restricted common stock to Bion. Both Bion
and LTLK have executed voting agreements in favor of the
Company's Chairman/CEO, Aleron H. Larson, Jr. and its President,
Roger A. Parker, for the shares purchased. The voting
agreement of LTLK, dated May 19, 1994, is incorporated by
reference from Exhibit 28.1 to the Company's Form 8-K dated May
24, 1994. The voting agreement of Bion dated June 26, 1995
is included in Exhibit 99.3 to the Company's Form 8-K dated
August 18, 1995.

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits.

The Exhibits listed in the Index to Exhibits
appearing at Page 42 are filed as part of this report.

(b) Reports on Form 8-K.

No current reports on Form 8-K were filed during
the three months ended June 30, 1995.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

(Registrant) DELTA PETROLEUM CORPORATION

By (Signature and Title) /s/Aleron H. Larson, Jr.
Aleron H. Larson, Jr., Secretary,
Chairman of the Board, Treasurer
and Principal Financial Officer

By (Signature and Title) /s/Kevin K. Nanke
Kevin K. Nanke, Controller and
Principal Accounting Officer

Pursuant to the requirements of the Securities Exchange Act
of 1934, this report has been signed below by the following
persons on behalf of the Registrant and in the capacities and on
the dates indicated.

By (Signature and Title) /s/Aleron H. Larson, Jr.
Aleron H. Larson, Jr., Director
Date 10/11/95

By (Signature and Title) /s/Roger A. Parker
Roger A. Parker, Director
Date 10/11/95

By (Signature and Title) /s/Terry D. Enright
Terry D. Enright, Director
Date 10/11/95

By (Signature and Title) /s/Don E. Mettler
Don E. Mettler, Director
Date 10/11/95

INDEX TO EXHIBITS

(2) Plan of Acquisitions, Reorganization, Arrangement,
Liquidation, or Succession. Not applicable.

(3) Articles of Incorporation and By-laws. The Articles of
Incorporation and Articles of Amendment to Articles of
Incorporation and By-laws of the Registrant were filed as
Exhibits 3.1, 3.2, and 3.3, respectively, to the Registrant's
Form 10 Registration Statement under the Securities and Exchange
Act of 1934, filed September 9, 1987, with the Securities and
Exchange Commission and are incorporated herein by reference.
Statement of Designation and Determination of Preferences of
Series A Convertible Preferred Stock of Delta Petroleum
Corporation is incorporated by Reference to Exhibit 28.3 of the
Current Report on Form 8-K dated June 15, 1988. Statement of
Designation and Determination of Preferences of Series B
Convertible Preferred Stock of Delta Petroleum Corporation is
incorporated by reference to Exhibit 28.1 of the Current Report
on Form 8-K dated August 9, 1989.

(4) Instruments Defining the Rights of Security Holders.
Not applicable.

(9) Voting Trust Agreement. Not applicable.

(10) Material Contracts.

10.1 Exchange Agreement dated August 10, 1989.
Incorporated by reference from Exhibit 28.1 to the Company's Form
8-K dated August 10, 1989.

10.2 Agreement between Daniel A. Sisk, Trustee of the
Roger A. Parker and Pamela E. Parker Trust and Delta Petroleum
Corporation dated December 7, 1989. Incorporated by reference
from Exhibit 28.1 to the Company's Form 8-K dated February 9,
1990.

10.3 Agreement between Daniel A. Sisk, Trustee of the
Roger A. Parker and Pamela E. Parker Trust and Delta Petroleum
Corporation dated December 7, 1989. Incorporated by reference
from Exhibit 28.2 to the Company's Form 8-K dated February 9,
1990.

10.4 Letter Agreement between Enright Gas & Oil, Inc.
and Delta Petroleum Corporation dated January 22, 1990.
Incorporated by reference from Exhibit 28.3 to the Company's Form
8-K dated February 9, 1990.

10.5 Exchange Agreement dated February 16, 1990.
Incorporated by reference from Exhibit 28.1 to the Company's Form
8-K dated February 20, 1990.

10.6 Purchase Agreement dated March 15, 1990.
Incorporated by reference from Exhibit 28.1 to the Company's Form
8-K dated March 15, 1990.

10.7 Purchase Agreement dated March 15, 1990.
Incorporated by reference from Exhibit 28.1 to Form 8-K dated
March 20, 1990.

10.8 Agreement between Crestone Energy Corporation and
Delta Petroleum Corporation dated July 6, 1990. Incorporated by
reference from Exhibit 28.1 to Form 8-K dated July 12, 1990.

10.9 Agreement between Crestone Energy Corporation and
Delta Petroleum Corporation dated June 28, 1990. Incorporated by
reference from Exhibit 28.2 to Form 8-K dated July 12, 1990.

10.10 Agreement between Troy Bates and Delta Petroleum
Corporation dated July 2, 1990. Incorporated by reference from
Exhibit 28.3 to Form 8-K dated July 12, 1990.

10.11 Agreement between Channel Way Industries dated
7-12-90 and Delta Petroleum Corporation dated July 6, 1990.
Incorporated by reference from Exhibit 28.4 to Form 8-K dated
July 12, 1990.

10.12 Agreement between John C. Riley and Delta Petroleum
Corporation dated July 6, 1990. Incorporated by reference from
Exhibit 28.5 to Form 8-K dated July 12, 1990.

10.13 Minutes of the Board of Directors of Delta
Petroleum Corporation dated July 6, 1990. Incorporated by
reference from Exhibit 28.6 to Form 8-K dated July 12, 1990.

10.14 Exchange Agreement dated June 30, 1990, between
High Alpine Petroleum, Inc., and Delta Petroleum Corporation.
Incorporated by reference from Exhibit 28.7 to Form 8-K dated
July 12, 1990.

10.15 Exchange offer from Delta Petroleum Corporation to
Resources Acquisition, Inc. Incorporated by reference from
Exhibit 28.8 to Form 8-K dated July 12, 1990.

10.16 Agreement between Delta Petroleum Corporation and
Chippewa Resources Corporation dated August 1, 1990. Incorporated
by reference from Exhibit 28.1 to Form 8-K dated August 15, 1990.

10.17 Letter dated August 6, 1990 from Delta Petroleum
Corporation to Ridgewood Energy Industries, Inc. Incorporated by
reference from Exhibit 28.2 to Form 8-K dated August 15, 1990.

10.18 Amended Exchange Agreement dated June 30, 1990,
dated 8-15-90 between High Alpine Petroleum, Inc. and Delta
Petroleum Corporation (replacing the first page of Exhibit 28.7
to Form 8-K dated July 12, 1990.) Incorporated by reference
from Exhibit 28.3 to Form 8-K dated August 15, 1990.

10.19 Agreement dated September 30, 1990 between Apex
Operating Company and Delta Petroleum Corporation. Incorporated
by reference from Exhibit 28.1 to the Company's Form 8-K dated
October 12, 1990.

10.20 Addendum to Agreement dated June 28, 1990, between
Crestone Energy Corporation and Delta Petroleum Corporation.
Incorporated by reference from Exhibit 28.2 to Form 8-K dated
October 12, 1990.

10.21 Agreement dated February 18, 1991 between Chippewa
Resources Corporation and Delta Petroleum Corporation.
Incorporated by reference from Exhibit 28.1 to the Company's Form
8-K dated February 26, 1991.

10.22 Addendum dated June 28, 1991 between Chippewa
Resources Corporation and Delta Petroleum Corporation.
Incorporated by reference from Exhibit 28.1 to the Company's Form
8-K dated June 28, 1991.

10.23 UFG Agreement effective October 21, 1992.
Incorporated by reference from Exhibit 28.1 to the Company's Form
8-K dated December 4, 1992.

10.24 Voting Agreement dated December 21, 1992.
Incorporated by reference from Exhibit 9.1 to the Company's Form
8-K dated February 5, 1993.

10.25 Employment Agreement with Aleron H. Larson, Jr.
Incorporated by reference from Exhibit 28.1 to the Company's Form
8-K dated February 5, 1993.

10.26 Employment Agreement with Roger A. Parker.
Incorporated by reference from Exhibit 28.2 to the Company's Form
8-K dated February 5, 1993.

10.27 Professional Consulting Agreement with Market
Development Group, Inc. Incorporated by reference from Exhibit
28.3 to the Company's Form 8-K dated February 5, 1993.

10.28 Consulting Agreement with Stonehenge Capital
Corporation. Incorporated by reference from Exhibit 28.4 to the
Company's Form 8-K dated February 5, 1993.

10.29 Clarification Agreement effective March 31, 1993.
Incorporated by reference from Exhibit 28.1 to the Company's Form
8-K dated April 14, 1993.

10.30 Option Amendment Agreement effective March 30,
1993. Incorporated by reference from Exhibit 28.2 to the
Company's Form 8-K dated April 14, 1993.

10.31 1993 Incentive Plan. Incorporated by reference from
Exhibit 28.1 to the Company's Form 8-K dated May 21, 1993.

10.32 Rio Pecos Documents. Incorporated by reference from
Exhibit 28.2 to the Company's Form 8-K dated May 21, 1993.

10.33 MDC Group, Inc. Amendment #3. Incorporated by
reference from Exhibit 28.1 to the Company's Form 8-K dated June
30, 1993.

10.34 MDC Group, Inc. Amendment #4. Incorporated by
reference from Exhibit 28.1 to the Company's Form 8-K dated
October 5, 1993.

10.35 Agreements and other documents relating to the
acquisition of properties. Incorporated by reference from Exhibit
28.1 to the Company's Form 8-K dated November 3, 1993.

10.36 EL Paso Natural Gas Company Agreement, dated
November 18, 1994. Incorporated by reference from Exhibit 28.1 to
the Company's Form 8-K dated November 21, 1993.

10.37 Agreement between Delta Petroleum Corporation and
Burdette A. Ogle dated February 24, 1994 for offshore Santa
Barbara California Federal oil and gas units. Incorporated by
reference from Exhibit 28.1 to the Company's Form 8-K dated
February 25, 1994.

10.38 Agreement between Delta Petroleum Corporation and
Mr. Hunt Walker for leasehold acres in the Piceance Basin of
Colorado dated January 25, 1994. Incorporated by reference from
Exhibit 28.2 to the Company's Form 8-K dated February 25, 1994.

10.39 Amendment #5 between Delta Petroleum Corporation
and MDC Group, Inc. effective December 30, 1993. Incorporated by
reference from Exhibit 28.3 to the Company's Form 8-K dated
February 25, 1994.

10.40 Addendum to agreement dated February 24, 1994
between Delta Petroleum Corporation and Burdette A. Ogle for
offshore Santa Barbara California Federal oil and gas units.
Incorporated by reference from Exhibit 28.1 to the Company's
Form 8-K dated May 24, 1994.

10.41 LoTayLingKyur, Inc. agreement effective May 18,
1994. Incorporated by reference from Exhibit 28.2 to the
Company's Form 8-K dated May 24, 1994.

10.42 Amendment #6 and #7 between Delta Petroleum
Corporation and MDC Group, Inc. effective April 30, 1994 and May
24, 1994. Incorporated by reference from Exhibit 28.3 to the
Company's Form 8-K dated May 24, 1994.

10.43 Amendment #8 between Delta Petroleum Corporation
and MDC Group effective July 15, 1994. Incorporated by reference
from Exhibit 28.1 to the Company's Form 8-K dated July 15, 1994.

10.44 Addendum #2 to agreement dated February 24, 1994
between Delta Petroleum Corporation and Burdette A. Ogle for
offshore Santa Barbara California Federal oil and gas units.
Incorporated by reference from Exhibit 28.2 to the Company's
Form 8-K dated July 15, 1994.

10.45 Memorandum of Agreement between Delta Petroleum
Corporation and Underwriters Financial Group, Inc. and attached
Letter of Intent. Incorporated by reference from Exhibit 28.1 to
the Company's Form 8-K dated August 9, 1994.

10.46 Letter Agreement between Bion Environmental
Technologies, Inc. and Delta Petroleum Corporation. Incorporated
by reference from Exhibit 28.2 to the Company's Form 8-K dated
August 9, 1994.

10.47 Addendum #3 to agreement dated February 24, 1994
between Delta Petroleum Corporation and Burdette A. Ogle.
Incorporated by reference from Exhibit 28.3 to the Company's Form
8-K dated August 9, 1994.

10.48 Addendum #4 to agreement dated February 24, 1994
between Delta Petroleum Corporation and Burdette A. Ogle for
offshore Santa Barbara California Federal oil and gas units.
Incorporated by reference from Exhibit 28.1 to the Company's
Form 8-K dated August 31, 1993.

10.49 Employment agreement for Aleron H. Larson, Jr.
Incorporated by reference from Exhibit 28.1 to the Company's Form
8-K dated September 21, 1994.

10.50 Employment agreement for Roger A. Parker.
Incorporated by reference from Exhibit 28.2 to the Company's Form
8-K dated September 21, 1994.

10.51 Burdette A. Ogle "Assignment, Conveyance and Bill
of Sale of Federal Oil and Gas Leases Reserving a Production
Payment", "Lease Interests Purchase Option Agreement" and
"Purchase and Sale Agreement". Incorporated by reference
from Exhibit 28.1 to the Company's Form 8-K dated January 3,
1995.

10.52 Bion Environmental Technologies, Inc. "Settlement
Agreement and General Release", "Letter Agreement" and
"Investment Representation Agreement". Incorporated by reference
from Exhibit 28.2 to the Company's Form 8-K dated January 3,
1995.

10.53 Troy Bates "Agreement and Assignment" and
"Investment Representation Agreement". Incorporated by reference
from Exhibit 28.3 to the Company's Form 8-K dated January 3,
1995.

10.54 Bruce Heafitz and Heafitz Energy Management, Inc.
"Agreement/Release", "Assignment and Conveyance" and "Investment
Representation Agreement". Incorporated by reference from Exhibit
28.1 to the Company's Form 8-K dated January 23, 1995.

10.55 Letter Agreement between Delta Petroleum
Corporation and Underwriters Financial Group, Inc. dated February
22, 1995. Incorporated by reference from Exhibit 28.1 to the
Company's Form 8-K dated February 22, 1995.

10.56 Agreement between Delta Petroleum Corporation and
John Lefebvre, Shareholder Relations. Incorporated by reference
from Exhibit 28.2 to the Company's Form 8-K dated February 22,
1995.

10.57 Agreement effective October 28, 1992 between Delta
Petroleum Corporation, Burdette A. Ogle and Ron Heck.
Incorporated by reference from Exhibit 28.2 to the Company's Form
8-K dated December 4, 1992.

10.58 Agreement and Promissory Note effective November
20, 1992 between Delta Petroleum Corporation and Stonehenge
Capital Corporation. Incorporated by reference to Exhibit 28.3
to the Company's Form 8-K dated December 4, 1992.

10.59 November 28, 1994 agreement between Amber Resources
Company (a 92% owned subsidiary of the Company) and El Paso
Natural Gas Company exchanging four Amber wells for satisfaction
of Amber's +967,911 recoupment gas obligation. Incorporated by
reference from Exhibit 28.1 to the Company's Form 8-K dated
November 21, 1994.

10.60 Agreement dated August 10, 1995 with Corporate
Relations Group. Incorporated by reference from Exhibit 99.1 to
the Company's Form 8-K dated August 18, 1995.

10.61 Agreements dated August 15, 1995 with Corporate
Relations Group, Inc. relating to the purchase of stock.
Incorporated by reference from Exhibit 99.2 to the Company's Form
8-K dated August 18, 1995.

10.62 Agreement with Bion Environmental Technologies,
Inc. dated June 26, 1995 including an agreement to convert a
portion of a promissory note to common stock and a stock voting
agreement in favor of the Company's President and Chairman.
Incorporated by reference to Exhibit 99.3 to the Company's Form
8-K dated August 18, 1995.

10.63 Agreement dated June 15, 1995 with LoTayLingKyur,
Inc. to convert a portion of a promissory note to common stock.
Incorporated by reference to Exhibit 99.4 to the Company's Form
8-K dated November 18, 1994.

10.64 Agreement dated May 19, 1994 with LoTayLingKyur,
Inc. Incorporated by reference to Exhibit 28.2 to the Company's
Form 8-K dated May 24, 1994.

10.65 Agreement with Miller Financial Group, Inc. dated
August 3, 1995. Incorporated by reference to Exhibit 99.5 to the
Company's Form 8-K dated August 18, 1995.

10.66 Agreement with Howard Jenkins dated July 20, 1995
for purchase of warrant. Incorporated by reference to Exhibit
99.6 to the Company's Form 8-K dated August 18, 1995.

10.67 Agreement dated August 1, 1995 with David Castaneda
relating to employment. Incorporated by reference to Exhibit 99.8
to the Company's Form 8-K dated August 18, 1995.

10.68 Agreement with LoTayLingKyur, Inc. dated June 29,
1995 relating to note extension and option grant. Incorporated
by reference to Exhibit 99.9 to the Company's Form 8-K dated
August 18, 1995.

(11) Statement Regarding Computation of Per Share Earnings.
Not applicable.

(12) Statement Regarding Computation of Ratios.
Not applicable.

(13) Annual Report to Security Holders, Form 10-Q or
Quarterly Report to Security Holders. Not applicable.

(16) Letter re: Change in Certifying Accountants.
Not applicable.

(17) Letter re: Director Resignation. Not applicable.

(18) Letter Regarding Change in Accounting Principals.
Not applicable.

(19) Previously Unfiled Documents. Not applicable.

(21) Subsidiaries of the Registrant. Not applicable.

(22) Published Report Regarding Matters Submitted to Vote of
Security Holders. Not applicable.

(23) Consent of Experts and Counsel.

23.1 Consent of KPMG Peat Marwick, LLP

23.2 Consent of Mannon and Associates, Inc.

23.3 Consent of Kent B. Lina, P.E.

(24) Power of Attorney. Not applicable.

(27) Financial Data Schedule.

(99) Additional Exhibits. Not applicable.

Independent Auditors' Report

The Board of Directors and Stockholders
Delta Petroleum Corporation:

We have audited the accompanying consolidated balance sheets of
Delta Petroleum Corporation (the Company) and subsidiary as of
June 30, 1995 and 1994 and the related consolidated statements of
operations, stockholders' equity, and cash flows for the year
ended June 30, 1995, the six months ended June 30, 1994 and the
year ended December 31, 1993. These financial statements are the
responsibility of the Company's management. Our responsibility
is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the financial
position of Delta Petroleum Corporation and subsidiary as of June
30, 1995 amd 1994 and the results of their operations and their cash flows
for the year ended June 30, 1995, the six months ended June 30,
1994 and the year ended December 31, 1993 in conformity with
generally accepted accounting principles.

As discussed in Notes 2 and 4 to the consolidated financial
statements, a portion of the shares of Amber Resources Company, a
majority owned consolidated subsidiary of the Company, are
pledged to secure a note payable by the Company's former parent,
which note is currently in default. Significant uncertainty
exists as to the former parent's ability to ultimately repay or
otherwise satisfy the obligation. The ultimate outcome of this
matter cannot presently be determined. Accordingly, the
consolidated financial statements do not include any adjustments
that would result if the holder of the note were to foreclose on
the Amber shares held as collateral and the Company were
otherwise unable to satisfy the obligation and retain the shares.

As discussed in Note 11 to the consolidated financial statements,
the Company has an investment in certain undeveloped offshore
California properties of $6,786,580 at June 30, 1995.

The Company's ability to ultimately develop the properties is
subject to a number of significant uncertainties, including the
operators ability to obtain the necessary permits and
authorizations relating to the development activities.
Accordingly, the Company's ability to realize its investment in the
offshore California properties is uncertain and is ultimately
dependent on its ability to develop the properties and/or to sell
some or all of its interests in the properties. The consolidated
financial statements do not include any adjustments that would
result if the Company could not realize its investment in the
properties.

As discussed in Notes 1 and 3 to the financial statements, the
Company adopted the provisions of Statement of Financial Accounting
Standards No. 121 "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to be Disposed of" and Statement
of Financial Accounting Standards No. 115 "Accounting for Certain
Investments in Debt and Equity Securities" in the year ended
June 30, 1995.

/s/KPMG Peat Marwick
KPMG Peat Marwick LLP

Denver, Colorado
October 10, 1995

<TABLE>

DELTA PETROLEUM CORPORATION
AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS

June 30, June 30,
1995 1994

ASSETS

<S> <C> <C>
Current Assets:
Cash $55,833 6,860
Trade accounts receivable, net of
allowance for doubtful accounts
of $48,722 in 1995 and $92,552 in 1994 327,185 314,942
Other current assets 2,100 21,166

Total current assets 385,118 342,968

Property and Equipment:
Oil and gas properties, at cost (using
the successful efforts method
of accounting) (Notes 2 and 11):
Undeveloped offshore California
properties 6,786,580 6,648,580
Undeveloped foreign properties 318,840 146,340
Undeveloped onshore domestic properties 498,799 503,111
Developed onshore domestic properties 2,703,762 4,609,475
Office furniture and equipment 60,830 55,670
10,368,811 11,963,176

Less accumulated depreciation and depletion (1,426,818) (1,926,611)

Net property and equipment 8,941,993 10,036,565

Investment in Bion Environmental
Technologies, Inc. (Bion) (Note 3) 316,525 666,667

Accounts receivable from officer
and affiliates (Note 9) 83,137 124,815

$9,726,773 11,171,015
</TABLE>

<TABLE>

DELTA PETROLEUM CORPORATION
AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS, CONTINUED

June 30, June 30,
1995 1994

<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
Note payable (Note 4) $100,000 -
Accounts payable trade 602,738 373,085
Accrued interest payable 8,000 132,322
Other accrued liabilities 182,998 88,939
Consulting fees payable to stockholders (Note 9) 162,500 102,500
Royalties payable held in suspense 241,233 231,875
Recoupment gas royalties payable 669,841 643,841
Liabilities payable by Underwriters Financial
Group (UFG) (the Company's former parent)
(Notes 2 and 5):
Note payable, including accrued interest 2,232,855 2,091,761
Encumbrances payable - 152,622

Total current liabilities 4,100,165 3,816,945

Convertible note payable (Note 6) - 1,250,000

Recoupment gas obligation - 967,911

Stockholders' Equity (Note 7)
Preferred stock, $.10 par value;
authorized 3,000,000 shares; none issued - -
Common stock, $.01 par value;
authorized 300,000,000 shares, issued 3,550,882
shares in 1995 and 2,949,847 shares in 1994 35,509 29,498
Obligation payable in common stock 46,400 -
Additional paid-in capital 15,627,201 11,465,704
Unamortized consulting expense - (100,000)
Cumulative unrealized loss (Note 3) (350,142) -
Accumulated deficit (9,832,360) (6,259,043)

Total stockholders' equity 5,526,608 5,136,159

Commitments and contingencies (Notes 2,4,9 and 10)
$9,726,773 11,171,015

See accompanying notes to consoldiated financial statements.
</TABLE>

<TABLE>

DELTA PETROLEUM CORPORATION
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
<CAPTION>

Year Ended Six Months Year Ended
June 30, ended June 30, December 31,
1995 1994 1993
Revenue:

<S> <C> <C> <C>
Oil and gas sales, including recoupment
gas $167,009 in 1995 and $255,859 in
1994 and $632,116 in 1993 (Note 1) $1,272,989 687,811 1,873,088
Gain on sale of oil and gas properties 113,721 - -
Other revenue 42,197 52,469 50,910

Total Revenue 1,428,907 740,280 1,923,998

Expenses:

Lease operating expenses 369,683 239,948 497,339
Depreciation and depletion 542,979 398,697 746,377
Exploration expenses 23,811 86,804 70,883
Abandoned and impaired properties 559,445 233,363 72,366
Minimum royalty to related party (Note 9) 250,000 - -
General and administrative 1,589,042 587,939 1,014,668
Stock option expense (Note 7) 1,508,750 - -
Interest on notes payable 539,079 255,109 502,962
Interest on recoupment gas obligation (Note 1) 113,285 99,603 443,676
Write-off of advances to UFG (Note 9) - 148,864 -
Write-off of investments and related
receiveables (Note 3) - - 350,200

Total Expenses 5,496,074 2,050,327 3,698,471

Loss before extraordinary item (4,067,167) (1,310,047) (1,774,473)

Extraordinary gain on settlement of
recoupment gas obligation (Note 1) 493,850 - -

Net loss ($3,573,317) (1,310,047) (1,774,473)

Loss per common share:

Loss before extraordinary item ($1.33) (0.45) (0.63)
Extraordinary gain on settlement of
recoupment gas obligation 0.16 - -
Net loss ($1.17) (0.45) (0.63)

Weighted average number of common
shares outstanding 3,052,341 2,919,844 2,821,791

See accompanying notes to financial statements.
</TABLE>

<TABLE>
DELTA PETROLEUM CORPORATION
AND SUBSIDIARY
Consolidated Statement of Stockholders' Equity
Year ended June 30, 1995, Six Months Ended
June 30, 1994 and Year Ended December 31, 1993

Obligation Additional Unamortized
Common Stock payable in paid-in consulting
Shares Amount common stock capital expense

<S> <C> <C> <C> <C> <C>
Balance, January 1, 1993 2,795,299 $27,953 - 8,840,829 (200,000)
Shares issued for cash 4,445 44 - 9,956 -
Shares issued for cash upon exercise of
options (Note 7) 20,790 208 - 98,542 -
Shares issued for undeveloped and producing
oil and gas properties (Note 9) 38,803 388 - 181,415 -
Shares issued for services (Note 7) 18,750 188 - 84,812 -
Capital contributions from UFG (Note 2) - - - 1,043,026 -
Decrease in advances to UFG (Note 9) - - - - -
Net loss - - - - -

Balance, December 31, 1993 2,878,087 28,781 - 10,258,580 (200,000)

Shares issued for cash upon exercise of
options (Note 7) 53,200 532 - 252,168 -
Shares issued for undeveloped oil and gas
properties (Note 7) 18,560 185 - 87,975 -
Capital contributions from UFG (Note 2) - - - 866,981 -
Amortization of consulting expense (Note 7) - - - - 100,000
Decrease in advances to UFG (Note 9) - - - - -
Write-off of advances to UFG (Note 9) - - - - -
Net loss - - - - -

Balance, June 30, 1994 2,949,847 29,498 - 11,465,704 (100,000)

Cumulative effect of adoption of SFAS 115
(Note 3) - - - - -
Unrealized loss on equity securities (Note 3) - - - - -
Shares issued for cash 39,000 390 - 134,200 -
Capital contributions from UFG (Note 2) - - - 284,073 -
Shares issued for cash upon exercise of
options (Note 7) 63,150 632 - 269,331 -
Shares isued for undeveloped oil and gas
properties (Note 7) 90,000 900 - 309,600 -
Shares issued for services (Note 7) 20,000 200 - 68,800 -
Treasury stock contributed by UFG (Note 2) - - - 633,304 -
Retirement of treasury stock (Note 2) (92,117) (921) - (632,383) -
Stock options granted as compensation (Note 7) - - - 1,508,875 -
Shares to be issued to former employee under a
severance agreement - - 46,400 - -
Shares issued for reduction of note payable
and accrued interest (Note 6) 461,002 4,610 - 1,516,697 -
Amortization of consulting expense (Note 7) - - - - 100,000
Shares issued for settlement agreement (Note 9) 20,000 200 - 69,000 -
Net loss - - - - -

Balance, June 30, 1995 3,550,882 $35,509 46,400 15,627,201 -
</TABLE>

<TABLE>
Cumulative
unrealized
Advances Treasury gain Accumulated
to UFG stock (loss) deficit Total

<S> <C> <C> <C> <C> <C>
Balance, January 1, 1993 (224,911) - - (3,174,523) 5,269,348

Shares issued for cash - - - - 10,000
Shares issued for cash upon exercise of
options (Note 7) - - - - 98,750
Shares issued for undeveloped and producing
oil and gas properties (Note 9) - - - - 181,803
Shares issued for services (Note 7) - - - - 85,000
Capital contributions from UFG (Note 2) - - - - 1,043,026
Decrease in advances to UFG (Note 9) 52,718 - - - 52,718
Net loss - - - (1,774,473) (1,774,473)

Balance, December 31, 1993 (172,193) - - (4,948,996) 4,966,172

Shares issued for cash upon exercise of
options (Note 7) - - - - 252,700
Shares issued for undeveloped oil and gas
properties (Note 7) - - - - 88,160
Capital contributions from UFG (Note 2) - - - - 866,981
Amortization of consulting expense (Note 7) - - - - 100,000
Decrease in advances to UFG (Note 9) 23,329 - - - 23,329
Write-off of advances to UFG (Note 9) 148,864 - - - 148,864
Net loss - - - (1,310,047) (1,310,047)

Balance, June 30, 1994 - - - (6,259,043) 5,136,159

Cumulative effect of adoption of SFAS 115
(Note 3) - - 266,666 - 266,666
Unrealized loss on equity securities (Note 3) - - (616,808) - (616,808)
Shares issued for cash - - - - 134,590
Capital contributions from UFG (Note 2) - - - - 284,073
Shares issued for cash upon exercise of
options (Note 7) - - - - 269,963
Shares isued for undeveloped oil and gas
properties (Note 7) - - - - 310,500
Shares issued for services (Note 7) - - - - 69,000
Treasury stock contributed by UFG (Note 2) - (633,304) - - -
Retirement of treasury stock (Note 2) - 633,304 - - -
Stock options granted as compensation (Note 7) - - - - 1,508,875
Shares to be issued to former employee under a
severance agreement - - - - 46,400
Shares issued for reduction of note payable
and accrued interest (Note 6) - - - - 1,521,307
Amortization of consulting expense (Note 7) - - - - 100,000
Shares issued for settlement agreement (Note 9) - - - - 69,200
Net loss - - - (3,573,317) (3,573,317)

Balance, June 30, 1995 - - (350,142) (9,832,360) 5,526,608

See accompanying notes to consolidated financial statements.
</TABLE>

<TABLE>

DELTA PETROLEUM CORPORATION
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
<CAPTION>

Six Months
Year Ended Ended Year Ended
June 30, June 30, December 31,
1995 1994 1993

<S> <C> <C> <C>
Cash flows from operating activities:
Net loss ($3,573,317) (1,310,047) (1,774,473)
Adjustments to reconcile net loss to cash
provided by (used in) operating activities:
Recoupment gas revenue (167,009) (255,859) (632,116)
Interest on recoupment gas obligation 113,285 99,603 443,676
Interest on note payable by UFG 371,094 193,875 382,500
Depreciation and depletion 542,979 398,697 746,377
Gain on sale of oil and gas properties (113,721) - -
Abandoned and impaired properties 559,445 233,363 72,366
Extraordinary gain on settlement of
recoupment gas obligation (493,850) - -
Write-off of advances to UFG - 148,864 -
Write-off of investment and related receivable - - 350,200
Amortization of consulting expense 100,000 100,000 -
Stock option expense 1,508,875 - -
Stock issued to former employee under
severence agreement 46,400 - -
Common stock issued for services 69,000 - 85,000
Common stock issued for settlement 69,200 - -
Net changes in current assets and
and current liabilities:
Decrease (increase) in trade accounts
receivable (12,243) 63,537 (36,855)
Decrease (increase) in other current assets 19,066 304 (21,370)
Increase (decrease) in accounts payable trade 131,104 (65,452) 455,248
Increase (decrease) in accrued interest payable 146,985 30,617 87,107
Increase in other accrued liabilities 94,059 15,330 49,186
Increase in consulting fees payable
to stockholder 60,000 30,000 72,500
Increase (decrease) in accounts payable
to affiliate - - (34,608)
Increase in royalties payable in suspense 9,358 20,023 59,381
Increase in recoupment gas royalties payable 26,000 55,484 139,453
Net cash provided by (used in) operating activities (493,290) (241,661) 443,572

Cash flows from investing activities:
Additions to property and equipment (373,556) (148,484) (282,195)
Proceeds from sale of oil and gas properties 369,588 - -
Increase in investments - - (150,000)
Net cash provided by (used in) investing activities (3,968) (148,484) (432,195)

Cash flows from financing activities:
Borrowings under note payable 100,000 - -
Payment of notes payable - - (26,623)
Issuance of common stock for cash 134,590 252,700 108,750
Stock issued for cash upon exercise of option 269,963 - -
Decrease (increase) in advances to UFG - 23,329 52,718
Decrease (increase) in accounts receivable from
officer and affiliates 41,678 (3,770) (21,476)
Net cash provided by (used in) financing activities 546,231 272,259 113,369

Net increase (decrease) in cash 48,973 (117,886) 124,746

Cash at beginning of period 6,860 124,746 0

Cash at end of period $55,833 6,860 124,746

Supplemental cashflow information:
Cash paid for interest $20,796 30,414 27,188

Non-cash financing activities:
Stock issued for oil and gas properties $310,500 88,160 181,803

See accompanying notes to consolidated financial statements

</TABLE>

DELTA PETROLEUM CORPORATION
AND SUBSIDIARY
Notes to Consolidated Financial Statements
June 30, 1995, June 30, 1994 and December 31, 1993

(1) Summary of Significant Accounting Policies

Organization and Principles of Consolidation

Delta Petroleum Corporation (Delta) was organized December
21, 1984 and is principally engaged in acquiring,exploring,
developing and producing oil and gas properties. The
Company owns interests in undeveloped oil and gas
properties in Federal Units offshore California, near Santa
Barbara, an interest in a venture to explore an undeveloped
property in the Philippines, and developed and undeveloped
oil and gas properties in the continental United States.

At June 30, 1995, the Company owned 4,277,977 shares of the
common stock of Amber Resources Company (Amber),
representing 91.68% of the outstanding common stock of
Amber. Amber is a public company also engaged in
acquiring, exploring, developing and producing oil and gas
properties.

The consolidated financial statements include the accounts
of Delta and Amber (collectively, the Company). All
intercompany balances and transactions have been eliminated
in consolidation.

The Company changed its year-end from December 31 to June
30 effective in 1994.

Cash Equivalents

Cash equivalents consist of money market funds. For
purposes of the statements of cash flows, the Company
considers all highly liquid investments with original
maturities of three months or less to be cash equivalents.

Property and Equipment

The Company follows the successful efforts method of
accounting for its oil and gas activities. Accordingly,
costs associated with the acquisition, drilling, and
equipping of successful exploratory wells are capitalized.
Geological and geophysical costs, delay and surface rentals
and drilling costs of unsuccessful exploratory wells are
charged to expense as incurred. Costs of drilling
development wells, both successful and unsuccessful, are
capitalized.

Upon the sale or retirement of oil and gas properties, the
cost thereof and the accumulated depreciation and depletion
are removed from the accounts and any gain or loss is
credited or charged to operations.

Depreciation and depletion of capitalized acquisition,
exploration and development costs is computed on the units-
of-production method by individual fields as the related
proved reserves are produced. Capitalized costs of unproved
properties are assessed periodically and a provision for
impairment is recorded, if necessary, through a charge to
operations.

Furniture and equipment are depreciated using the straight-
line method over estimated lives ranging from three to five
years.

Impairment of Long-Lived Assets

Statement of Financial Accounting Standards No. 121
"Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed of" (SFAS 121) was issued
in March 1995. This statement requires that long-lived
assets be reviewed for impairment when events or changes in
circumstances indicate that the carrying value of such
assets may not be recoverable. This review consists of a
comparison of the carrying value of the asset with the
asset's expected future undiscounted cash flows without
interest costs.

Estimates of expected future cash flows are to represent
management's best estimate based on reasonable and
supportable assumptions and projections. If the expected
future cash flows exceed the carrying value of the asset, no
impairment is recognized. If the carrying value of the
asset exceeds the expected future cash flows, an impairment
exists and is measured by the excess of the carrying value
over the estimated fair value of the asset. Any impairment
provisions recognized in accordance with SFAS 121 are
permanent and may not be restored in the future.

In the fourth quarter of fiscal 1995, the Company adopted
SFAS 121 for its proved oil and gas properties. The
Company's proved properties were assessed for impairment on
an individual field basis and the Company recorded an
impairment provision of $411,791 attributable to certain
producing properties.

Prior to the adoption of SFAS 121, the Company assessed its
proved oil and gas properties on an aggregate basis using
undiscounted future net revenue, calculated using constant
prices and costs.

Gas Balancing

The Company uses the sales method of accounting for gas
balancing of gas production. Under this method, all
proceeds from production credited to the Company are
recorded as revenue until such time as the Company has
produced its share of the related estimated remaining
reserves. Thereafter, additional amounts received are
recorded as a liability.

As of June 30, 1995, the Company had produced approximately
145,000 Mcf more than its entitled share of production. The
undiscounted value of this imbalance is approximately
$220,000 using the lower of the price received for the
natural gas, the current market price or the contract price,
as applicable.

Recoupment Gas Obligation

Certain oil and gas properties were acquired by Amber
subject to a recoupment agreement with a gas purchaser.
Under the terms of the recoupment agreement, the gas
purchaser was entitled to receive up to 75% of future
production to recoup gas purchased in connection with the
settlement of a previous take or pay contract covering the
properties. The gas purchaser had recourse only to the
properties subject to the agreement.

The obligation under the recoupment agreement was accounted
for in a manner similar to a production payment. The
estimated present value of the obligation at the date of the
acquisition of the properties was recorded as a liability.
The liability was calculated based on remaining volumes of
gas due, using the price of gas at the date of the
acquisition of the properties, discounted at 15% over the
period the gas was expected to be recouped. The liability
was periodically increased by the accretion of the discount
and was reduced as the gas was delivered to the gas
purchaser. The gas produced and delivered to the gas
purchaser (recoupment gas) is recorded as revenue at the
then current price of natural gas. Any difference between
the revenue recorded for the recoupment gas and the
reduction in the recoupment obligation was accounted for as
an increase or decrease in interest expense.

The Company was responsible for royalties and for production
costs associated with the properties subject to the
recoupment agreement.

On November 18, 1994, the Company entered into an agreement
with El Paso Natural Gas Company (El Paso) under which Amber
agreed to transfer to El Paso, Amber's interest in four
wells and the associated acreage in complete satisfaction of
Amber's recoupment gas obligation. As a result of this
agreement, the Company is no longer obligated to El Paso for
recoupment gas from the remaining wells originally subject
to the recoupment agreement. As a result of this
transaction, the Company recorded an extraordinary gain of
$493,850 in fiscal 1995.

Recoupment Gas Royalties Payable

Recoupment gas royalties represent royalties due on
recoupment gas produced and delivered to the gas purchaser
pursuant to the terms of the recoupment agreement described
above. The Company has estimated the liability to the
royalty owners based on the market price of the gas during
the period the gas was produced and delivered to the gas
purchaser.

Income Taxes

The Company uses the asset and liability method of
accounting for income taxes as set forth in Statement of
Financial Accounting Standards No. 109 (SFAS No. 109),
Accounting for Income Taxes. Under the asset and liability
method, deferred tax assets and liabilities are recognized
for the future tax consequences attributable to differences
between the financial statement carrying amounts of existing
assets and liabilities and their respective tax bases and
operating loss and tax credit carryforwards. Deferred tax
assets and liabilities are measured using enacted income tax
rates expected to apply to taxable income in the years in
which those differences are expected to be recovered or
settled. Under SFAS No. 109, the effect on deferred tax
assets and liabilities of a change in income tax rates is
recognized in the results of operations in the period that
includes the enactment date.

Income (Loss) Per Common Share

Income (loss) per share is computed by dividing the net
income or loss for the period by the weighted average number
of shares of common stock outstanding during the period.
Common stock options and warrants have not been considered
in the calculation of earnings per share as their effect is
antidilutive.

(2) Plan of Reorganization

In October 1992, Delta concluded a series of agreements with
Underwriters Financial Group, Inc. (UFG) (collectively, the
UFG Agreement) to participate in a plan to reorganize and
recapitalize Delta (the Plan of Reorganization). Prior to
the reorganization, UFG owned approximately 89% of the
outstanding shares of Delta's common stock. Under the terms
of the UFG Agreement, UFG transferred its oil and gas
properties and certain other related assets to Delta as a
contribution to the capital of Delta. The assets
transferred included producing and non-producing oil and gas
properties, accounts receivable, oil field equipment, and
office furniture and equipment. UFG also transferred
4,110,660 shares of common stock of Amber to Delta. The
shares transferred represented an 88.09% interest in Amber.

Also in connection with the Plan of Reorganization, Delta
issued 1,030,000 shares of common stock to Messrs. Burdette
A. Ogle and Ronald Heck (collectively, Ogle) in exchange for
their working interests in two federal offshore California
oil and gas property and 167,317 shares of common stock of
Amber.

The oil and gas properties and shares of common stock of
Amber received from Ogle were recorded at Ogle s predecessor
cost of approximately $45,000. The assets transferred to
Delta by UFG were recorded at the predecessor cost of the
assets to UFG, as adjusted. UFG followed the full cost
method of accounting for its oil and gas properties. The
predecessor cost of the producing properties transferred
was adjusted to conform to the Company s policy of
accounting for oil and gas properties under the successful
efforts method of accounting. The predecessor cost of each
oil and gas property was further adjusted, if necessary, to
reduce the amount recorded to the estimated fair value of
the oil and gas reserves attributable to the property at the
time of the transfer, if less than the adjusted predecessor
cost of the property.

The Clarification Agreement also provided for the pledge of
556,289 shares of common stock of the Company held by UFG as
collateral for performance under the promissory note and
provided for the clarification and revision of certain other
provisions of the UFG Agreement. In February 1995, UFG
transferred 92,117 shares of the Company's common stock, and
491,300 shares of UFG common stock to the Company in
satisfaction of amounts due under the note receivable from
UFG and, further, agreed that the remaining 888,063 shares
of the Company's common stock owned by UFG would be held
by Delta pending discharge of UFG's obligations to Snyder
Oil Corporation, described below. The note receivable from
UFG had not been previously recorded in the Company's
financial statements. The market value of the Company's
common stock received from UFG was accounted for as a
capital contribution and an increase in treasury stock. The
treasury stock was subsequently retired. Trading on UFG's
common stock has been suspended by the American Stock
Exchange, therefore, the value of the 491,300 shares of
UFG's common stock owned by the Company is uncertain.
Accordingly, the Company has not placed any value on the
shares received.

Certain of the oil and gas properties transferred had been
pledged by UFG to secure existing indebtedness of UFG, which
indebtedness remained an obligation of UFG under the terms
of the UFG Agreement. To the extent the existing secured
indebtedness on a particular property exceeded its adjusted
predecessor cost, the transfer of the property was recorded
in the accompanying financial statements at its adjusted
predecessor cost and a liability was recorded in an amount
equal to the asset recorded. To the extent the existing
secured indebtedness on a particular property is less than
the adjusted predecessor cost, the property was recorded at
its adjusted predecessor cost, the related liability was
recorded and the net amount was reflected as a capital
contribution by UFG. Subsequent payments by UFG which
reduce the liabilities recorded by the Company are accounted
for as a reduction of the liability and a capital
contribution. Amounts reflected as capital contributions by
UFG were $284,073 during the year ended June 30, 1995,
$866,981 during the six months ended June 30, 1994 and
$1,043,026 during the year ended December 31, 1993.

3,357,003 shares of common stock of Amber transferred to the
Company by UFG are pledged to secure a note payable to
Snyder Oil Corporation (the Snyder Note). The balance due
on the note payable at the time of the transfer of the Amber
shares to Delta of $2,292,456 was recorded as a liability of
Delta, because of uncertainties regarding UFG s ability to
fulfill its obligations under the note.

The Company believes there is substantial risk that UFG will
be unable to repay the Snyder Note, which is currently in
default and that the encumbered portion of the Amber shares
owned by Delta could be lost. The loss of the encumbered
Amber shares would reduce Delta s ownership interest in
Amber to approximately 19.74%. Amber s oil and gas revenue
during the year ended June 30, 1995 amounted to
approximately $730,000 which constituted approximately 57%
of the Company s consolidated oil and gas revenue. A loss
of the encumbered Amber shares would significantly reduce
the Company s oil and gas revenue and reserves and have a
material affect on the financial condition and results of
operations of the Company (see note 5).

In connection with the Plan of Reorganization, UFG entered
into a voting agreement granting to Aleron H. Larson and
Roger A. Parker, officers of the Company, the right to vote
the shares of the Company s common stock owned by UFG until
December 31, 2002.

(3) Investments

On April 9, 1992, UFG issued a convertible promissory note
to Bion Environmental Technologies, Inc. (Bion) in exchange
for 125,000 unregistered shares of common stock of Bion and
a warrant to purchase an additional 125,000 shares of common
stock of Bion for $10 per share. Bion is a publicly traded
company in the business of designing, marketing and
overseeing the installation of treatment systems for the
bio-conversion of wastewater. During 1992, UFG transferred
the shares of common stock of Bion to the Company in
exchange for 133,333 shares of the Company s common stock.

The shares of Bion received were recorded at UFG s
predecessor cost of $666,667. The Company subsequently
received 1,610 shares of common stock of Bion for rent and
other services provided by the Company. The 126,610 shares
of common stock of Bion owned by the Company are subject to
certain restrictions on their transfer. The shares of Bion
represent approximately 8.7% of the outstanding shares of
Bion as of June 30, 1995.

The Company adopted Statement of Financial Standards No. 115
as of July 1, 1994. The Company's investment in Bion is
classified as an available for sale security and reported at
its fair market value, with unrealized gains and losses
excluded from earnings and reported as a separate component
of stockholders' equity. Prior to July 1, 1994, the
Company's investment in Bion was accounted for at the lower
of cost or market.

The cost and estimated market value of its investment in
Bion at June 30, 1995 and 1994 is as follows:

Unrealized Estimated
Gain Market
Cost (Loss) Value

1995 $666,667 (350,142) 316,525

1994 $666,667 266,666 933,333

As of October 10, 1995, the estimated market value of the
Company's investment in Bion, based on the quoted bid price
of Bions common stock, was $540,000.

During the year ended December 31, 1993, the Company wrote
off its investment in the common stock of two other
companies totaling $255,000 and a related note receivable
for $95,200 from one of the companies.

(4) Note Payable

In December 1994, the Company borrowed $100,000 from a
third party. The note is unsecured and is payable on or
before September 1, 1995, with interest at 18%. In
connection with the borrowing, the Company granted options
to purchase 50,000 shares of the Company's common stock at
$6.00 per share, expiring the later of September 30, 1997
or 30 days after registration of the underlying shares.
Subsequent to year end, the note payable and accrued
interest was paid in full.

(5) Note Payable by UFG

At June 30, 1995 and 1994, the note payable by UFG
recorded in the accompanying consolidated financial
statements represents UFG s obligation under the Snyder
Note, which was recorded upon the transfer of the common
stock of Amber to the Company by UFG in connection with
the Plan of Reorganization (see note 2). The note payable
bears interest at 18% and was due January 15, 1994.
The note is currently in default. Past due amounts
accrue interest compounded at 18% per year. The note
is secured by 3,357,003 shares of common stock of Amber.
The note has been recorded in the accompanying consolidated financial
statements as a liability of the Company since a portion of
the common shares of Amber owned by the Company are
pledged to secure the note and because of the uncertainties
regarding UFG s ability to fulfill its obligations under
the note (see note 2).

Although the Company is not obligated to make payments on
the note, the Company records interest expense pursuant to
the terms of the note. Payments of principal and interest
by UFG to Snyder are recorded as a reduction of the note
and accrued interest payable with a corresponding
adjustment to additional paid-in capital. During the year
ended June 30, 1995, the six months ended June 30, 1994 and
the year ended December 31, 1993, payments to Snyder by UFG
amounted to $230,000, $59,570, and $717,500, respectively.

As discussed in note 2, the Company believes there is
substantial risk that UFG will be unable to perform its
obligations under the note and, as a result, the encumbered
portion of the Amber shares could be lost, thereby reducing
the Company s interest in Amber to 19.74%.

The net assets and liabilities of Amber included in the
accompanying consolidated financial statements are
summarized as follow:

June 30, June 30,
1995 1994
Assets:

Current assets $ 103,809 66,058
Oil and gas properties:
Undeveloped offshore
California properties 5,007,086 4,821,069
Developed onshore
properties, net 776,046 1,823,950
5,886,941 6,711,077

Liabilities:

Current liabilities 1,189,557 926,948
Recoupment gas obligation - 967,911

1,189,557 1,894,859

Net assets $4,697,384 4,816,218

The revenue and expenses of Amber included in the
accompanying consolidated financial statements for the year
ended June 30, 1995, the six months ended June 30, 1994
and the year ended December 31, 1993 are as follows:

1995 1994 1993

Revenue $788,619 368,339 1,078,444
Expenses (1,401,303) (617,523) (1,445,242)
Extraordinary
gain 493,850 - -

Net loss $ (118,834) (249,184) (366,798)

(6) Convertible Note Payable

Effective November 30, 1992, the Company acquired certain
oil and gas properties from a third party in exchange for
a convertible note payable in the amount of $1,250,000.
The note was unsecured and was payable on or before
November 20, 1999, with interest at 9% payable at
maturity.

On May 22, 1995, a portion of the convertible
promissory note was transferred to Bion.

During June 1995, the entire note and related accrued
interest was converted into 461,002 restricted shares of
the Company's common stock. In connection with the
conversion, Aleron H. Larson, Jr. and Roger A. Parker,
officers of the Company, entered into a voting agreement
granting them the right to vote the 461,002 shares of
common stock until 2004.

(7) Stockholders Equity

Common Stock

During the year ended June 30, 1995, the six months ended
June 30, 1994 and the year ended December 31, 1993, the
Company issued shares of its common stock in exchange for
oil and gas properties, for services rendered in
connection with a severance agreement, and in connection
with a settlement agreement. The transactions were
recorded at the estimated fair value of the common stock
issued, which was based on the quoted market price of the
stock at the time of issuance.

Subsequent to June 30, 1995, the Company received the
proceeds form the exercise of options to purchase shares of
its common stock for $269,963 during the year ended June
30, 1995, $252,700 during the six months ended June 30,
1994 and $98,750 during the year ended December 31, 1993.
Subsequent to year end, the Company completed a sale of
231,000 shares of the Company's common stock to third
parties for $750,000 with net proceeds to the Company of
$675,000 after payment of certain fees. Under the purchase
agreement the Company has committed to register the shares
within 30 days or increase the number of shares by 25,000
with an increase of an additional 5,000
shares each 30 days thereafter until the expiration of six
months after which the Company has agreed to repurchase all
shares issued for $750,000 and to deliver a promissory note
therefore, with interest payable at 15% per annum from the
date funds were received.

Incentive Stock Options

The Company s 1993 Incentive Plan (the Incentive Plan) was
adopted by the Board of Directors on May 24, 1993 and
ratified and adopted by the shareholders on October 5,
1993. The Company has reserved 500,000 shares of common
stock (or 20% of the issued and outstanding common stock of
the Company, whichever equates to a greater number of
shares during the term of the Incentive Plan) for issuance
upon the exercise of options granted under the Incentive
Plan. Options under the Company's Incentive Plan are
immediately exercisable upon issuance.

As of June 30, 1995, the following options were outstanding:

Options Exercise Expiration
Outstanding Price Date

355,000 $1.25 9/21/04
210,000 3.75 6/09/03
14,350 4.75 6/09/03

On September 21, 1994, the Company s Incentive Plan
Committee granted to each of two officers options to
purchase 177,500 shares of common stock at $1.25 per share
under the Incentive Plan. The options are immediately
exercisable and expire September 21, 2004. Also on
September 21, 1994, each officer surrendered to the Company
177,500 warrants to purchase shares at $1.25 per share
owned by them. Stock option expense of $1,508,750 has been
recorded for the year ended June 30, 1995 based on the
difference between the option price and the quoted market
price on the date of grant for the options granted.

Other Warrants/and Options

In addition to options outstanding under the Incentive
Plan, the following warrants/and options were outstanding
as of June 30, 1995:

Number Exercise Expiration
Outstanding Price Date

59,000(1) $ 1.25 8/08/95
28,000(2) 2.50 8/08/95
20,000 3.50 6/09/03
50,000 5.50 3/02/98
50,000(3) 6.00 9/30/97
60,000 6.88 2/15/97
100,000 8.00 8/31/99

(1) Subsequent to June 30, 1995, the warrants were
extended to thirty days after registration of the
underlying shares.

(2) Subsequent to year end, two officers of the Company
each exchanged 7,000 warrants for options to
purchase 7,000 shares at $2.50 per share under the
Company's 1993 Incentive Plan. The options are
immediately exercisable and expire July 25, 2005.

(3) The 50,000 options issued at $6.00 expire the later
of expiration date or thirty days after
registration of the underlying shares.

Consulting Agreement

During 1992, the Company entered into an agreement with
an unrelated party to consult with the Company in
assembling and disseminating public information about
the Company for a period ending in December 1994. The
Company issued 92,000 shares of its common stock for
services rendered in 1992. The shares issued were placed
into escrow and were released from escrow over
approximately a two-year period. The fair value of the
common stock issued of $368,000 was estimated
based on the quoted market price of the common stock and
was charged to operations in 1992.

Under the terms of the agreement, the Company also
issued options to purchase 650,000 shares of common
stock exercisable at various dates through 1998 at
prices ranging from $4.75 to $7.75. Options to purchase
20,790 shares at $4.75 per share were exercised in 1993
for total proceeds of $98,750. Options to purchase
53,200 shares were exercised during the six months ended
June 30, 1994 for total proceeds of $252,700. Options
to purchase 12,500 shares were exercised during the year
ended June 30, 1995 for total proceeds of $59,375. At
June 30, 1995, there were remaining options outstanding
under the agreement to purchase 50,000 shares of common
stock at $5.50 per share, expiring in March 1998.

Under the terms of the agreement, the Company also
issued 50,000 shares of common stock for services
rendered in 1994. The shares were placed in escrow and
were released from escrow in January 1995. The fair
value of the common stock issued of $200,000 was
estimated based on the quoted market price of the common
stock at the time it was issued and was charged to
unamortized consulting expense. Unamortized consulting
expense was recorded as a component of stockholders
equity and amortized ratably over the calendar year
1994.

(8) Income Taxes

At June 30, 1995 and 1994, the Company s significant
deferred tax assets and liabilities are summarized as
follows:

1995 1994
Deferred tax assets:
Net operating loss
carryforwards $4,173,000 3,608,000
Allowance for doubtful
accounts not deductible
for tax purposes 19,000 35,000
Consulting fees payable
to stockholders not
deductible until paid 62,000 39,000
Recoupment gas obligation - 368,000
Gross deferred tax assets 4,254,000 4,050,000

Less valuation allowance ( 2,354,000) (1,900,000)
Net deferred tax assets 1,900,000 2,150,000
Deferred tax liabilities -
oil and gas properties,
principally due to
differences in basis and
depreciation and depletion ( 1,900,000) (2,150,000)

Net deferred tax asset $ - -

No income tax benefit has been recorded for the year ended
June 30, 1995, the six months ended June 30, 1994 or the
year ended December 31, 1993 since the benefit of the net
operating loss carryforward and other net deferred tax
assets arising in those periods has been offset by an
increase in the valuation allowance for such net deferred
tax assets.

At June 30, 1995, the Company had net operating loss
carryforwards for regular and alternative minimum tax
purposes of approximately $11,000,000 and $10,800,000,
respectively. If not utilized, the tax net operating loss
carryforwards will expire during the period from 1996
through 2010. Net operating loss carryforwards
attributable to Amber prior to 1993 of approximately
$4,100,000 are available only to offset future taxable
income of Amber and are further limited to approximately
$430,000 per year, determined on a cumulative basis.

(9) Related Party Transactions

Accounts Receivable from Officer and Affiliates

At June 30, 1995, the Company had $83,137 of receivables
from affiliates of an officer of the Company primarily for
production taxes and other expenses on wells owned by the
affiliates and operated by the Company. The amounts are
due on open account and are non-interest bearing.

During the year ended December 31, 1993, the Company
advanced an officer of the Company $33,877. During 1993,
the officer repaid $5,679 of the advances. During the six
months ended June 30, 1994, the Company made additional
advances of $4,053 to the officer. During the year ended
June 30, 1995, the advances were paid in full.

Transactions with UFG

The Company entered into other transactions with UFG in
addition to the transactions entered into with UFG in
connection with the Plan of Reorganization described in
note 2 and the acquisition of the Company s investment in
Bion described in note 3. These additional transactions
are described below.

The Company issued 50,000 shares of common stock to UFG in
1992 in exchange for a note receivable from an unrelated
company in the amount of $95,200. The note receivable was
written off in 1993 in connection with the write-off of the
Company s investment in that company. See note 3.

Subsequent to the Plan of Reorganization, the Company paid
certain amounts on behalf of UFG, which amounts were
reflected as advances to UFG in the accompanying financial
statements. The advances to UFG were classified as a
reduction of stockholders equity due to their related
party nature. Subsequent to June 30, 1994, UFG was unable
to complete its obligations under an agreement, which
included among things, the repayment of the advances with
registered shares of common stock of UFG, and the agreement
expired by its terms. As a result the Company wrote-off
the advances during the six months ended June 30, 1994.

Transactions with Other Stockholders

In connection with the transaction with Ogle described in
note 2, the Company entered into a consulting agreement
with Ogle effective December 1, 1992 which provides for a
monthly fee of $10,000 for a period of five years. For the
first three months of the agreement $2,500 is payable
currently and for the remainder of the term of the
agreement $5,000 of the monthly fee is payable currently.
Subsequent to June 30, 1995, the accrued consulting fees
payable were paid in full.

During 1993, the Company issed 38,308 shares of its common
stock in exchange for interests in certain producing oil and
gas properties and undeveloped properties. The properties
were recorded at the estimated fair value of the stock
issued, based on the quoted market price of the common stock
on the date of the acquisition. Ogle received 5,264 of the
shares issued.

Effective February 24, 1994, Ogle granted the Company an
option to acquire working interests in three proved
undeveloped offshore Santa Barbara, California, federal oil
and gas units. In August 1994, the Company issued a warrant
to Ogle to purchase 100,000 shares of the Company's common
stock for five years at a price of $8 per share in
consideration of the agreement by Ogle to extend the
Expiration date of the option to January 3, 1995.
On January 3, 1995, the Company exercised the option from
Ogle to acquire the working interests in three proved
undeveloped offshore Santa Barbara, California, federal oil
and gas units. The purchase price of $8,000,000 is
represented by a production payment reserved in the
documents of Assignment and Conveyance and will be paid out
of three percent (3%) of the oil and gas production from the
working interests with a requirement for minimum annual
payments. Delta paid Ogle $250,000 in 1995, is to pay an
additional $250,000 in 1996 and a minimum of $350,000
annually thereafter until the earlier of: 1) when the
production payments accumulate to the $8,000,000 purchase
price; 2) when 80% of the ultimate reserves of any lease
have been produced; or 3) 30 years from the date of the
conveyance. Under the terms of the agreement, the Company
may reassign the working interests to Ogle upon notice of
not more than 14 months nor less than 12 months, thereby
releasing the Company of any further obligations to Ogle
after the reassignment.

Until such time as the property has been developed and
placed into production, the Company is recording the minimum
annual payments under the agreement as an expense, similar
to the accounting treatment afforded a delay rental. If and
when the property is placed on production, the Company
intends to account for the royalty interest retained by the
seller in a manner similar to the treatment afforded a
royalty interest retained by a landowner.

Delta agreed to issue 20,000 shares of its restricted common
stock to Bion to induce Bion to enter into an agreement with
UFG wherein both Bion and UFG agreed to release Delta and
its officers from any claims that either Bion or UFG might
have against Delta.

(10) Commitments

The Company rents an office in Denver under an operating
lease which expires in March 1998. Rent expense, net of
sublease rental income, for the year ended June 30, 1995,
the six months ended June 30, 1994 and the year ended
December 31, 1993 was approximately $62,000, $45,000 and
$87,000, respectively. Future minimum payments under
noncancelable operating leases are as follows:

1996 $ 99,426
1997 99,426
1998 72,949
1999 12,604

(11) Disclosures About Capitalized Costs, Cost Incurred and
Major Customers

Capitalized costs related to oil and gas producing
activities are as follows:

June 30, June 30,
1995 1994
Undeveloped offshore
California properties $6,786,580 6,648,580
Undeveloped foreign
properties 318,840 146,340
Undeveloped onshore
domestic properties 498,799 503,111
Developed onshore domestic
properties 2,703,762 4,609,475
10,307,981 11,907,506
Accumulated depreciation
and depletion (1,366,770) (1,874,564)

$8,941,211 10,032,942

Cost incurred in oil and gas producing activities for the
year ended June 30, 1995, the six months ended June 30,
1994 and the year ended December 31, 1993 are as follows:

1995 1994 1993
Unproved property
acquisition costs $310,500 156,111 160,000
Proved property
acquisition costs 71,935 66,401 170,642
Exploration expenses 23,811 86,804 70,883
Development costs 296,325 14,124 133,356
$ 702,571 323,440 534,881

The Company's sales of oil and gas to individual customers
which exceeded 10% of the Company's total oil and gas sales
were:

Six Months
Year Ended Ended Year Ended
June 30, June 30, December 31,
1995 1994 1993

A 27% 4% 7%
B 19% - -
C 15% 37% 33%
D 6% 9% 17%
E 2% 4% 10%
F - 15% 17%

(12) Information Regarding Proved Oil and Gas Reserves
(Unaudited)

Proved oil and gas reserves are the estimated quantities of
crude oil, natural gas, and natural gas liquids which
geological and engineering data demonstrate with reasonable
certainty to be recoverable in future years from known
reservoirs under existing economic and operating
conditions. Proved developed oil and gas reserves are those
expected to be recovered through existing wells with
existing equipment and operating methods. The
determination of oil and gas reserves is highly complex and
interpretive. The estimates are subject to continuing
changes as additional information becomes available.

The Company s Offshore California proved undeveloped
reserves are attributable to its interests in four federal
units (plus one additional lease) located offshore
California near Santa Barbara. While these interests
represent ownership of substantial oil and gas reserves
classified as proved undeveloped, the cost to develop the
reserves will be very substantial. The Company may be
required to farm out all or a portion of its interests in
these properties if it cannot fund its share of the
development costs. There can be no assurance that the
Company can farm out its interests on acceptable terms. If
the Company were to farm out its interests in these
properties, its share of the proved reserves attributable
to the properties would be decreased substantially. The
Company may also incur substantial dilution of its
interests in the properties if it elects to use other
methods of financing the development costs.

These units have been formally approved and are regulated
by the Minerals Management Service of the Federal
Government. However, due to a history of opposition to
offshore drilling and production in California by some
individuals and groups, the process of obtaining all of
the necessary permits and authorizations to develop the
properties will be lengthy and even after all required
approvals are obtained, lawsuits may possibly be filed to
attempt to further delay the development of the properties.
While the Federal Government has recently attempted to
expedite this process, there can be no assurance that it
will be successful in doing so. The Company does not have
a controlling interest in and does not act as the operator
of any of the offshore California properties and
consequently will not control the timing of
either the development of the properties or the
expenditures for development. Management and its
independent engineering consultant have considered these
factors relating to timing of the development of the
reserves in the preparation of the
reserve information relating to these properties. As
additional information becomes available in the future, the
Company s estimates of the proved undeveloped reserves
attributable to these properties could change, and such
changes could be substantial.

<TABLE>

DELTA PETROLEUM CORPORATION
AND SUBSIDIARY
Notes to Consolidated Financial Statements, Continued

(12) Information Regarding Proved Oil and Gas Reserves (Unaudited)-Continued

Future net cash flows presented below are computed using year-end prices and
costs and exclude amounts attributable to recoupment gas. Future corporate
overhead expenses and interest expense have not been included.

Offshore
Onshore California Total

<S> <C> <C> <C>
December 31, 1993:

Future cash inflows $24,534,944 400,297,853 424,832,797
Future costs:
Production 7,262,875 75,224,293 82,487,168
Development 3,714,727 84,676,117 88,390,844
Income taxes - 82,685,791 82,685,791

Future net cash flows 13,557,342 157,711,652 171,268,994

10% discount factor 7,718,149 131,707,511 139,425,660

Standardized measure of discounted future
net cash flows $5,839,193 26,004,141 31,843,334

June 30, 1994:

Future cash inflows $17,920,081 400,297,854 418,217,935
Future costs:
Production 5,676,783 75,224,293 80,901,076
Development 2,389,701 84,676,117 87,065,818
Income taxes - 80,766,817 80,766,817

Future net cash flows 9,853,597 159,630,627 169,484,224

10% discount factor 5,200,183 131,709,162 136,909,345

Standardized measure of discounted future
net cash flows $4,653,414 27,921,465 32,574,879

June 30, 1995

Future cash inflows $7,483,671 712,615,718 720,099,389
Future costs:
Production 3,043,357 134,494,357 137,537,714
Development 1,142,281 163,303,136 164,445,417
Income taxes - 136,491,549 136,491,549

Future net cash flows 3,298,033 278,326,676 281,624,709

10% discount factor 1,324,722 234,880,292 236,205,014

Standardized measure of discounted future
net cash flows $1,973,311 43,446,384 45,419,695

</TABLE>

<TABLE>

DELTA PETROLEUM CORPORATION
AND SUBSIDIARY
Notes to Consolidated Financial Statements
<CAPTION>

(12) Information Regarding Proved OIl and Gas Reserves (Unaudited)-Continued

A summary of changes in estimated quantities of proved reserves, net of
recoupment gas, for the year ended June 30, 1995, the six months ended
June 30, 1994 and the year ended December 31, 1993 are as follows:

Onshore Offshore
GAS OIL GAS OIL
(MCF) (BBLS) (MCF) (BBLS)

<S> <C> <C> <C> <C> <C>
Balance at January 1, 1993 5,493,738 192,149 37,580,553 32,514,986
Purchases of reserves in place 2,124,741 1,368 - -
Revisions of quantity estimates 4,443,696 (14,922) (45,560) (88,807)
Production (490,868) (13,259) - -
Balance at December 31, 1993 11,571,307 165,336 37,534,993 32,426,179

Purchases of reserves in place 147,753 - - -
Extensions and discoveries 122,645 107 - -
Revisions of quantity estimates (2,722,831) (15,709) - -
Production (173,021) (7,125) - -
Balance at June 30, 1994 8,945,853 142,609 37,534,993 32,426,179

Purchases of reserves in place - - 24,538,651 24,618,773
Extensions and discoveries 6,502 13 - -
Revisions of quantity estimates (3,571,359) (9,545) - -
Sales of properties (635,267) - - -
Production (582,844) (12,261) - -
Balance at June 30, 1995 4,162,885 120,816 62,073,644 57,044,952

Proved developed reserves:
December 31, 1992 4,677,392 93,135 - -
December 31, 1993 5,071,384 74,198 - -
June 30, 1994 4,658,634 61,590 - -
June 30, 1995 2,494,934 42,918 - -

</TABLE>
<TABLE>

DELTA PETROLEUM CORPORATION
AND SUBSIDIARY
Notes to Consolidated Financial Statements, Continued

(12) Information Regarding Proved Oil and Gas Reserves (Unaudited) - Continued

The principal sources of changes in the standardized measure of discounted
net cash flows during the year ended June 30, 1995, the six months ended
June 30, 1994 and the year ended December 31, 1993 are as follows:

Year Ended Six Months Year Ended
June 30, Ended June 30, December 31,
1995 1994 1993

<S> <C> <C> <C>
Beginning of year $32,574,879 31,843,334 42,494,068

Sales of oil and gas produced during the
period , net of production costs (759,226) (194,002) (743,633)
Net change in prices and production costs (124,704) (244,694) (18,104,274)
Changes in estimated future development costs (133,136) 289,563 (381,599)
Purchase of reserves in place 22,899,681 43,315 757,966
Extensions, discoveries and improved recovery 4,616 17,005 -
Revisions of previous quantity estimates and (5,757,236) (667,831) (2,210,231)
other
Net change in income taxes (6,120,256) (103,978) 5,781,630
Sales of reserves in place (422,411) -
Accretion of discount 3,257,488 1,592,167 4,249,407

End of year $45,419,695 $32,574,879 31,843,334

</TABLE>

The stanardized measure of discounted future net cash flows relating to proved
oil and gas reserves and the changes in standardized measure of discounted
future net cash flows relating to proved oil and gas reserves were prepared
in accordance with the provisions of Statement of Financial Accounting
Standards No. 69. Future cash inflows were computed by applying current prices
at year-end to estimated future production. Future production and development
costs are computed by estimating the expenditures to be incurred in developing
and producing the proved oil and gas reserves at year-end, based on year-end
costs and assuming continuation of existing economic conditions. Future income
tax expenses are calculated by applying appropriate year-end tax rates of
future pre-tax net cash flows relating to proved oil and gas reserves, less the
tax basis of properties involved and tax credits and loss carryforwards
relating to oil and gas producing activities. Future net cash flows are
discounted at a rate of 10% annually to derive the standardized measure
of discounted future net cash flows. This calculation procedure does not
necessarily result in an estimate of the fair market value or the present
value of the Company's oil and gas properties.

Consent of Independent Auditors

The Board of Directors
Delta Petroleum Corporation:

We consent to the incorporation by reference in the registration
statement No. 33-87106 on Form S-8 of Delta Petroleum Corporation
(the Company) of our report dated October 10, 1995 relating to the
consolidated balance sheets of Delta Petroleum Corporation and
subsidiary as of June 30, 1995 and 1994, and the related
consolidated statements of operations, stockholders equity, and
cash flows for the year ended June 30, 1995, the six months ended
June 30, 1994 and the year ended December 31, 1993, which report
appears in the June 30, 1995 Annual Report on Form 10-KSB of Delta
Petroleum Corporation for the period ending June 30, 1995.

Our report contains an explanatory paragraph that states that a
portion of the shares of Amber Resources Company, a majority owned
consolidated subsidiary of the Company, are pledged to secure a
note payable by the Company s former parent, which note is
currently in default. Significant uncertainty exists as to the
former parent s ability to repay or otherwise satisfy the
obligation. The ultimate outcome of this matter cannot presently
be determined. Accordingly, the consolidated financial statements
do not include any adjustments that would result if the holder of
the note were to foreclose on the Amber shares held as collateral
and the Company were otherwise unable to satisfy the obligation and
retain the shares.

Our report also contains an explanatory paragraph that states that
the Company has an investment in certain undeveloped offshore
California properties of $6,786,580 at June 30, 1995. The
Company s ability to ultimately develop the properties is subject
to a number of significant uncertainties, including the operator s
ability to obtain the necessary permits and authorizations relating
to the development activities. Accordingly, the Company s ability
to realize its investment in the offshore California properties is
uncertain and is ultimately dependent on its ability to develop the
properties and/or to sell some or all of its interests in the
properties. Accordingly, the consolidated financial statements do
not include any adjustments that would result if the Company could
not realize its investment in the properties.

Our report also refers to the Company's adoption of Statement of
Financial Accounting Standards No. 121 "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be
Disposed of" and Statement of Financial Accounting Standards No.
115 "Accounting for Certain Investments in Debt and Equity
Securities" in the year ended June 30, 1995.

/s/KPMG Peat Marwick
KPMG Peat Marwick LLP

Denver, Colorado
October 10, 1995

CONSENT OF PETROLEUM ENGINEER

Board of Directors
Delta Petroleum Corporation

I hereby consent to the use of my report dated July 1, 1995
relating to the oil and gas reserves of Delta Petroleum Corporation
in Delta's Form 10-KSB for the period ended June 30, 1995, which
report may be referenced in or appear as an exhibit in such
document.

/s/Robert W. Mannon
Mannon Associates

CONSENT OF PETROLEUM ENGINEER

Board of Directors
Delta Petroleum Corporation

I hereby consent to the use of my report relating to the oil
and gas reserves of Delta Petroleum Corporation in Delta's Form 10-
KSB for the period ended June 30, 1995, which report may be
referenced in or appear as an exhibit in such document.

/s/Kent B. Lina
Kent B. Lina, P.E.

[ARTICLE] 5
[CIK] 0000821483
[NAME] DELTA PETROLEUM CORP.
<TABLE>
<S> <C>
[PERIOD-TYPE] YEAR
[FISCAL-YEAR-END] JUN-30-1995
[PERIOD-END] JUN-30-1995
[CASH] 55,833
[RECEIVABLES] 375,907
[ALLOWANCES] 48,722
[CURRENT-ASSETS] 385,118
[PP&E] 10,368,811
[DEPRECIATION] 1,426,818
[TOTAL-ASSETS] 9,726,773
[CURRENT-LIABILITIES] 4,100,165
[COMMON] 35,509
[OTHER-SE] 5,491,099
[TOTAL-LIABILITY-AND-EQUITY] 9,726,773
[SALES] 1,272,989
[TOTAL-REVENUES] 1,428,907
[TOTAL-COSTS] 5,496,074
[INCOME-CONTINUING] (4,067,167)
[EXTRAORDINARY] 493,850
[NET-INCOME] (3,573,317)
[EPS-PRIMARY] (1.17)
</TABLE>