TO: COLORADO OIL & GAS CONSERVATION COMMISSION

SURFACE OWNER’S APPLICATION

TO HOLD HEARING FOR A REVIEW BY THE FULL COMMISSION OF THE DECISION OF THE DIRECTOR TO ISSUE PERMITS AND MOTION FOR STAY OF PERMITS TO DRILL

RE: Surface Owner: Rocky’s Autos, Inc.

Well: Rocky 16-34A; Rocky 11-34A; Rocky 8-3A

Weld County

Wattenberg Field 90750

Operator: Kerr-McGee Rocky Mountain Corp.

Operator No.: 47120

Rocky’s Autos, Inc. (“Rocky’s), as the surface owner of the property to be affected by the above-identified wells, hereby petitions the Oil and Gas Conservation Commission of the State of Colorado for a hearing on the decision of the Director to issue the drilling permits identified above. As grounds for its application, Rocky’s states as follows:

1. In July of 2002, Kerr-McGee sent a letter informing Rocky’s that it intended to seek permits to drill the above-referenced wells. The Surface Owner, Rocky’s Autos, Inc. first discovered in December, 2002 that Kerr-McGee had filed an application for a permit to drill the above wells, when counsel for Rocky’s came across the application during an internet search.

2. On December 2, 2002, counsel for Rocky’s sent an Objection to the Oil and Gas Commission, requesting that these wells be drilled directionally from already existing sites to minimize the destruction of the surface. (Attached hereto as Exhibit 1). Further, Rocky’s objected because Kerr-McGee had not fulfilled its obligation to conduct meaningful and complete consultations before commencing drilling operations as required by Rule 306. As set forth in Gerrity v. Magnes, 946 P.2d 913 (Colo. 1997), Kerr-McGee has an obligation to make reasonable accommodations to minimize the surface damage. Finally, Surface Owner requested a hearing before the drilling permit was approved.

3. On December 13, 2002, counsel for Kerr-McGee responded in a letter (Attached hereto as Exhibit 2), stating that further consultation was necessary and that it would drill directionally from the existing well sites for the incremental costs of drilling at $75,000 per well, which the Surface Owner would have to pay. Counsel further agreed with the Gerrity decision that it must give due regard to the interests of the surface owner in this matter.

4. After a meeting with Surface Owner on February 13, 2003, Kerr-McGee sent a letter of February 21, 2003 (Attached hereto as Exhibit 3). In this letter, Kerr-McGee outlined its intent for straight-hole drilling, access roads, flowlines, drill sites, batteries, etc. Further, Kerr-McGee denied all requests made by Rocky’s for certain reasonable accommodations so as to minimize the surface damage. Kerr-McGee’s letter advised Surface Owner it would begin drilling the first week of March.

5. Counsel for the Surface Owner responded Kerr-McGee’s threats by sending a letter on February 25, 2003 to the Oil and Gas Conservation Commission (Attached hereto as Exhibit 4). Surface Owner stated that Kerr-McGee had not used its best efforts to consult in good faith with the Surface Owner; that Kerr-McGee denied Rocky’s requests for certain reasonable accommodations so as to minimize the surface damage; and that reasonable alternative suggestions were unreasonably rejected. Kerr-McGee left no time for Surface Owner to respond to their take-it or leave-it plan to drill the wells. Surface Owner cited Amoco which cited Gerrity wherein “The mineral owner to justify his conduct must show that it was ‘reasonable and necessary.’” The Surface Owner once again requested the Commission to investigate all of these issues and to hold a hearing prior to approving the drilling permits.

6. On February 28, 2003, Kerr-McGee responded to Surface Owner’s above objection by writing to the Colorado Oil & Gas Conservation Commission. Kerr-McGee claims that it consulted in good faith yet admits that the parties have not agreed on one single fundamental point regarding the drilling of the proposed wells. Kerr-McGee states it has not attempted to negotiate surface damages for the proposed wells because of Surface Owners position on drilling locations. Kerr-McGee does not want to drill the wells as directional wells at its own expense.

7. Surface Owner believes that the reasonableness for directional drilling has already been established. A mineral rights owner for property directly adjacent to the property at issue here previously determined that the alternative of directional drilling wells was reasonable under the same circumstances presented in this matter. Several wells in the same area have been directionally drilled by EnCana Energy Resources (“EnCana”). These drilled wells all occurred from one location to three well sites. Unlike Kerr-McGee’s “take-it-or-leave-it” demands, EnCana found that it was reasonable to directionally drill these wells from one location so as to minimize surface damage. Further, EnCana paid for the incremental increase in this directional drilling and agreed to pay reasonable compensation for any damages caused by unreasonable use of the surface.

8. Directional drilling would not be at a steep angle or for great horizontal distances as compared with vertical drilling distances. Further, access would be easily convenient from an already existing group of wellheads for directional drilling. This would minimize the extensive damage to the land that would occur if access roads, pads, batteries and all the other attendant equipment is brought in for three different wells. Kerr-McGee plans a well in an area of great scenic beauty, including streams, ponds and trees. No monetary amount will replace the natural beauty lost if a well is placed there. Other parts of the land where Kerr-McGee intends to put wells is agricultural.

9. At this time, much of the surface is irrigated for use as agriculture. There are also two homes on the property. Although the long-range plan of the Surface Owner is to develop the land, some of it is presently used to grow crops and planting season is commencing. Some of the wells proposed by Kerr-McGee will be placed on top of, or immediately next to, pivot wells used for irrigation of the property. Conducting the drilling operations proposed by Kerr-McGee will cause damage to the existing use of the land. It will also interfere with irrigation and the present growing season as well as future development plans.

10. Surface Owner has asked for a Stay of the permits issued for drilling. This matter has been pending for some time. Granting the Stay until the full commission can hear this matter will result in only a short delay.

11. Counsel for Surface Owner conferred with counsel for Kerr-McGee regarding this stay. Although counsel for Kerr-McGee was willing to continue to discuss a resolution of this dispute, he was not willing to agree to a stay until a hearing can be scheduled.

Relief Requested: Surface Owner requests that a stay of the permits to drill the above referenced wells be issued until such time as a hearing before the full commission concerning the Director’s decision to issue the permits can be conducted at the next regularly scheduled time.

DATED: March 2003.

MILLER & STEIERT, P.C.

On behalf of Surface Owner

Gary M. Clexton

1901 W. Littleton Blvd.

Littleton, CO 80120

(303) 798-2525 FAX: (303) 798-2526

Attorney for Rocky’s Autos, Inc.

VERIFIED BY PARTY W/SUFFICIENT KNOWLEDGE TO CONFIRM FACTS CONTAINED HEREIN:

David Rothrock, President

Rocky’s Autos, Inc.

CERTIFICATE OF MAILING

I hereby certify that the above SURFACE OWNER’S APPLICATION

TO HOLD HEARING FOR A REVIEW BY THE FULL COMMISSION OF THE DECISION OF THE DIRECTOR TO ISSUE PERMITS AND MOTION FOR STAY OF PERMITS TO DRILL was served to the persons entitled to receive notice, by mailing same in the United States Mails, postage prepaid, this day of March 2003, addressed to:

G. Donohue Kane

Gorsuch Kirgis LLP

Tower 1, Suite 1000

1515 Arapahoe Street

Denver, CO 80202

Attorney for Kerr-McGee

PERSONS ENTITLED TO NOTICE

Gary M. Clexton, Esq.