Document:

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                                                                    EXHIBIT 10.3

                          DELPHI FINANCIAL GROUP, INC.

                           SECOND AMENDED AND RESTATED

                           EMPLOYEE STOCK OPTION PLAN

                                  INTRODUCTION

         Delphi Financial Group, Inc. (the "Company") adopted the Delphi
Financial Group, Inc. Employee Nonqualified Stock Option Plan effective November
6, 1987, and amended and restated such plan effective January 1, 1994. Because,
under the terms of such plan, options could only be granted thereunder within a
period of ten years from when the plan was originally approved by the Company's
stockholders, the plan was, effective as of March 20, 1997 (subject to the
approval of the stockholders of the Company), further amended and restated to
readopt such plan, as well as to consolidate prior plan amendments and
adjustments, including, among other things, the adjustment to the number of
shares available for issuance thereunder that resulted from the twenty percent
(20%) stock dividend distributed by the Company on September 30, 1996, and to
effect certain further amendments. Such plan, as so amended and restated, and as
further amended on May 9, 2000 to increase the aggregate number of shares as to
which options may be granted thereunder, is as follows:

         1.       PURPOSE

                  This Second Amended and Restated Employee Stock Option Plan
(the "Plan") is intended to be an incentive for employees of Delphi Financial
Group, Inc. (the "Company") or any of its subsidiary corporations (the
"Subsidiaries") as that term is defined in Section 424(f) of the Internal
Revenue Code of 1986, as amended from time to time (the "Code"), and other
Optionees (as herein defined) to share in future appreciation in the value of
the stock of the Company, and to encourage stock ownership by such individuals
in the Company, so that such individuals may acquire or increase a proprietary
interest in the success of the Company and its Subsidiaries, and so that they
may be encouraged to continue to provide services to the Company and its
Subsidiaries. The Plan provides for the issuance of nonqualified and incentive
stock options within the meaning of Section 422 of the Code (each, an "Option").

         2.       ADMINISTRATION

                  The Plan shall be administered by a committee appointed by the
Board of Directors of the Company (the "Committee"). The Committee shall consist
of not less than two members of the Company's Board of Directors. The Board of
Directors may from time to time remove members from, or add members to, the
Committee. Vacancies on the Committee, howsoever caused, shall be filled by the
Board of Directors. The Committee shall select one of its members as Chairman
and shall hold meetings at such times and places as it may determine. A majority
of the members of the Committee then constituting the entire Committee shall
constitute a quorum. Acts by a majority of the Committee at a meeting at which a
quorum is present, or acts reduced to or approved in writing by a majority of
the members of the Committee, shall be valid acts of the Committee. The
Committee shall from time to time in its discretion determine the individuals
who shall be granted Options and the number of Shares (as hereinafter defined)
to be subject thereto.

         3.       ELIGIBILITY

                  The persons who shall be eligible to receive Options (the
"Optionees") shall be the key employees (including officers whether or not they
are directors) of the Company or its Subsidiaries and other individuals who, in
the Committee's judgment, can make substantial contributions to the Company's
long-term profitability and value. An Optionee may be granted Options on more
than one occasion.

         4.       STOCK

                  The stock subject to the Options shall be shares (the
"Shares") of the Company's authorized but unissued or reacquired Class A common
stock, par value $.01 per share. The aggregate number of Shares as to which
Options may be
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granted shall not exceed 3,200,000. The aggregate number of Shares as to which
Options may be granted to any person in any one calendar year shall not exceed
500,000. The limitations established by the two immediately preceding sentences
shall be subject to adjustment as provided in Article 5(l) of the Plan. In the
event that any outstanding Option under the Plan for any reason expires,
terminates or is cancelled, the Shares allocable to the unexercised portion of
such Option will again be subject to Options thereafter awarded under the Plan.

         5.       TERMS AND CONDITIONS OF OPTIONS

                  When the Committee grants Options to an Optionee, a Notice of
Grant of Stock Option (an "Option Notice") shall be given to such Optionee,
which notice shall comply with and be subject to the following terms and
conditions:

                  (a) NUMBER OF SHARES. Each Option Notice shall state the
number of Shares to which the Options pertain.

                  (b) INCENTIVE STOCK OPTIONS. The Option Notice for an Option
that is intended to qualify as an incentive stock option under Section 422 of
the Code shall state that the Option is intended to so qualify, and shall
contain such provisions as may be necessary for such Option to so qualify.

                  (c) OPTION PRICE. Each Option Notice shall state the Option
price per Share, which shall be 100% of the Fair Market Value of a Share on the
date of the grant of the Option (the "Option Price"). For purposes hereof, "Fair
Market Value" shall be the closing price on the applicable date of a Share, as
reported on the New York Stock Exchange (the "NYSE"), or, if the Shares are not
then listed for trading on the NYSE, the closing price of the Shares as reported
on another recognized securities exchange or on the NASDAQ National Market
System if the Shares shall then be listed on such exchange or system. If the
Shares did not trade on the award date on the NYSE or such other applicable
exchange or system, the Fair Market Value for purposes hereof shall be the
reported closing price on the last business day on which the Shares were traded
preceding the award date.

                  (d) OPTION PRICE. The Option Notice may provide that the
Optionee may make payment of the Option Price in cash, Shares or such other
consideration as may be specified therein or as may be acceptable to the
Committee, or any combination thereof, in an amount or having an aggregate
value, as the case may be, equal to the total Option Price. Such payment shall
be made upon exercise of the Option.

                  (e)  TERM, TRANSFERABILITY AND EXERCISABILITY OF OPTIONS.

                  (i) Each Option Notice shall state the date on which the
Option shall expire (the "Expiration Date"), which shall not be later than ten
years following the date on which the Option is granted. Options are not
transferable by an Optionee other than by will or the laws of descent and
distribution, except that in the case of nonqualified stock options, if provided
in the applicable Option Notice (at the time of grant or as amended at any time
thereafter), an Option granted hereunder may be transferred for no consideration
by the Optionee to members of his or her immediate family, to a trust or trusts
established for the exclusive benefit only of one or more members of his or her
immediate family or to a partnership in which his or her immediate family
members are the only partners. Any Option held by such a transferee will
continue to be subject to the same terms and conditions that were applicable to
the Option immediately prior to the transfer, except that the Option will be
transferable by the transferee only by will or the laws of descent and
distribution. For purposes hereof, "immediate family" means the Optionee's
children, stepchildren, grandchildren, parents, stepparents, grandparents,
spouse, siblings (including half brothers and sisters), in-laws, and
relationships arising because of legal adoption. Subject to Article 5(j) hereof,
Options may be exercised by an Optionee only for so long as such person is
employed by the Company or a Subsidiary except as otherwise provided in Articles
5(f) through (i) of the Plan.

                  (ii) The Option Notice may, but need not, provide that the
Option shall become exercisable in installments rather than being exercisable
immediately in full. In such case, the Committee shall determine (A) the amount
and terms of such installments, which need not be equal, (B) the timing of such
installments, which need not

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be annual or consecutive, and (C) whether such installments shall be cumulative.
The Committee at any time may provide, in the case of an Option which is to
become exercisable in installments, for the acceleration of the times at which
the Option may become exercisable. The Committee's determination shall be
specified in the Option Notice.

                  (iii) Upon or in connection with a Change of Ownership, each
Optionee shall have the right, immediately prior to such Change of Ownership, to
exercise his or her Option without regard to any installment provisions as to
exercisability contained in such Optionee's Option Notice. For purposes of this
Plan, a "Change of Ownership" shall be deemed to have occurred (1) if
individuals who, as of the effective date of this Plan, constitute the Board of
Directors of the Company (the "Board of Directors" generally and as of the date
hereof the "Incumbent Board") cease for any reason to constitute at least a
majority of the directors constituting the Board of Directors, provided that any
person becoming a director subsequent to the effective date of this Plan whose
election, or nomination for election by the Company's shareholders, was approved
by a vote of at least three-quarters (3/4) of the then directors who are members
of the Incumbent Board (other than an election or nomination of an individual
whose initial assumption of office is (A) in connection with the acquisition by
a third person, including a "group" as such term is used in Section 13(d)(3) of
the Securities and Exchange Act of 1934, as amended (the "1934 Act"), of
beneficial ownership, directly or indirectly, of 20% or more of the combined
voting securities ordinarily having the right to vote for the election of
directors of the Company (unless such acquisition of beneficial ownership was
approved by a majority of the Board of Directors who are members of the
Incumbent Board), or (B) in connection with an actual or threatened election
contest relating to the election of the directors of the Company, as such terms
are used in Rule 14a-11 of Regulation 14A promulgated under the 1934 Act) shall
be, for purposes of this Plan, considered as though such person were a member of
the Incumbent Board; or (2) if the stockholders of the Company approve a merger,
consolidation, recapitalization or reorganization of the Company, reverse split
of any class of voting securities of the Company, or an acquisition of
securities or assets by the Company, or the sale or disposition by the Company
of all or substantially all of the Company's assets, or if any such transaction
is consummated without stockholder approval, other than any such transaction in
which the holders of outstanding Company voting securities immediately prior to
the transaction receive, with respect to such Company voting securities, voting
securities of the surviving or transferee entity representing more than 60
percent of the total voting power outstanding immediately after such
transaction, with the voting power of each such continuing holder relative to
other such continuing holders not substantially altered in the transaction; or
(3) if the stockholders of the Company approve a plan of complete liquidation of
the Company.

                  (iv) At any time and from time to time when any Option or
portion thereof is exercisable, such Option or portion thereof may be exercised
in whole or in part, as applicable; provided, however, that the Company shall
not be required to issue fractional Shares.

                  (f) TERMINATION OF EMPLOYMENT EXCEPT BY DEATH, DISABILITY OR
DISCHARGE FOR CAUSE. Unless otherwise specified in an Option Notice, in the
event that the employment of an Optionee by the Company or its Subsidiaries
shall terminate for any reason other than death, disability, or discharge for
cause, Options may be exercised only within three (3) months after such
termination of employment or such longer period as may be established by the
Committee at the time of grant or thereafter, but only to the extent such Option
was exercisable on the last day of employment, and in no event may an Option be
exercised after its Expiration Date. Any portion of the Option which was not
exercisable on such last day shall expire immediately. Whether authorized leave
or absence or absence for military or governmental service shall constitute
termination of employment for the purposes of the Plan shall be determined by
the Committee, which determination shall be final and conclusive.

                  (g) DEATH OR DISABILITY OF OPTIONEE. Unless otherwise
specified in an Option Notice, in the event an Optionee shall die or become
disabled while in the employ of the Company or a Subsidiary, Options may be
exercised at any time within one (1) year after the Optionee's death or
disability or such longer period as may be established by the Committee at the
time of grant or thereafter, but only to the extent that such Option was
exercisable on the last day of employment, and in no event may an Option be
exercised after its Expiration Date. During such one-year period, the Option may
be exercised by the Optionee or a representative, or in the case of death, by
the executors or administrators of the Optionee or by any person or persons who
shall have acquired the Option directly from the

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Optionee by bequest or inheritance. Whether an Optionee shall have become
disabled for the purposes of the Plan shall be determined by the Committee,
which determination shall be final and conclusive.

                  (h) DISCHARGE FOR CAUSE. If an Optionee is discharged for
cause, all unexercised Options shall terminate as of the date of his discharge.
Whether an Optionee is discharged for cause for purposes of the Plan shall be
determined by the Committee, which determination shall be final and conclusive.

                  (i) RETIREMENT. Notwithstanding the provisions of Article 5(f)
hereof, the Committee may, at the time of grant of an Option or thereafter,
permit the Optionee to exercise Options (but only to the extent the Option was
exercisable on the last date of employment) up to one (1) year following the
Optionee's retirement under the Company's or its Subsidiary's, as applicable,
retirement policy or such longer period as may be established by the Committee
at the time of grant or thereafter; provided that in no event may an Option be
exercised after its Expiration Date.

                  (j) NON-EMPLOYEE OPTIONEES. Neither the last sentence of
Article 5(e)(i) nor any of Articles 5(f) through 5(i) hereof shall apply with
respect to Options having been granted to an Optionee who is not an employee of
the Company or its Subsidiaries (a "Non-Employee Optionee"). In the case of any
such Options, the Option Notice shall set forth the applicable limitations on
the exercisability thereof, and the effect on such exercisability of death,
disability and any other events provided for therein, at the time of grant or
thereafter.

                  (k) RIGHT OF COMPANY. In the case of a termination of an
Optionee's employment by reason of death, disability, retirement or discharge
other than for cause (or, in the case of a Non-Employee Optionee, to the extent
provided in the Option Notice at the time of grant or thereafter) the Company
may, but is not obligated to, purchase unexercised Options held by such Optionee
and pay such person the amount of cash equal to (i) the aggregate Fair Market
Value of Shares underlying such Option (to the extent that such Options would
have been exercisable by the Optionee upon termination of employment) as of the
date of termination of employment (or, in the case of a Non-Employee Optionee,
the date provided in the Option Notice at the time of grant or thereafter), less
(ii) the aggregate Option Price for such Shares.

                  (l)  RECAPITALIZATION, REORGANIZATION, ETC., OF COMPANY.

                  (i) Subject to any required action by the stockholders, the
number of Shares covered by each outstanding Option, and the price per Share so
covered shall automatically be proportionately adjusted for any increase or
decrease in the number of issued shares of Class A Common Stock of the Company
resulting from a subdivision or consolidation of Shares or the payment of a
stock dividend or any other increase or decrease in the number of such shares
effected without receipt of consideration by the Company.

                  (ii) If, pursuant to any reorganization, recapitalization,
sale or exchange of assets, consolidation or merger, outstanding Class A Common
Stock of the Company is or would be exchanged for other securities of the
Company or of another corporation which is a party to such transaction, or for
property, whether or not any such transaction gives rise to a Change of
Ownership, any Options under the Plan theretofore granted shall apply to the
securities or property into which the Class A Common Stock covered thereby shall
be so changed or for which such Class A Common Stock shall be exchanged. In any
of such events, the total number and class of Shares then remaining available
for issuance under the Plan (including Shares reserved for outstanding Options
and Shares available for future grant of Options under the Plan) shall likewise
be adjusted so that the Plan shall thereafter cover the number and class of
shares equivalent to the Shares covered by the Plan immediately prior to such
event.

                  (iii) In the event of a change in the Class A Common Stock of
the Company as presently constituted, which is limited to a change of all of its
authorized shares with par value into the same number of shares with a different
par value or without par value, the shares resulting from any such change shall
be deemed to be the Class A Common Stock within the meaning of the Plan.

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                  (iv) Adjustments pursuant to Article 5(l)(ii) hereof shall be
made by the Committee, whose determination as to which shall be final, binding
and conclusive.

                  (v) Except as hereinbefore expressly provided in this Article
5(l), an Optionee shall have no rights by reason of any subdivision or
consolidation of shares of stock of any class or the payment of any stock
dividend or any other increase or decrease in the number of shares of stock of
any class or by reason of any dissolution, liquidation, merger or consolidation
or spin-off of assets or stock of another corporation, and any class, or
securities convertible into shares of stock of any class, shall not affect, and
no adjustment by reason thereof shall be made with respect to, the number or
price of shares of Class A Common Stock subject to the Option.

                  (vi) The grant of an Option pursuant to the Plan shall not
affect in any way the right or power of the Company to make adjustments,
reclassifications, mergers, reorganizations or changes of its capital or
business structure, to merge or to consolidate, to dissolve or liquidate or to
sell or transfer all or any part of its business or assets.

                  (m) RIGHTS AS A STOCKHOLDER. No person shall have any rights
as a stockholder with respect to any Shares covered by an Option until the date
of the issuance of the Shares to such person. No adjustments shall be made for
dividends (ordinary or extraordinary, whether in cash, securities or other
property) or distributions or other rights, except as provided in Article 5(l)
hereof.

                  (n) MODIFICATION, EXTENSION AND RENEWAL OF OPTIONS. Subject to
the terms and conditions and within the limitations of the Plan, the Committee
may modify, extend or renew outstanding Options granted under the Plan, or
accept the surrender of outstanding Options (to the extent not theretofore
exercised). Notwithstanding the foregoing, however, no modification of an Option
shall, without the consent of the Optionee, alter or impair any rights or
obligations under any Option theretofore granted under the Plan.

                  (o) INVESTMENT PURPOSE. Each Option under the Plan shall be
granted on the condition that the purchases of Shares hereunder shall be for
investment purposes and not with a view to resale or distribution, except that
in the event the Shares subject to such Option are registered under the
Securities Act of 1933, as amended (the "Act"), or in the event a resale of such
Shares without such registration would otherwise be permissible, such condition
shall be inoperative if, in the opinion of counsel for the Company, such
condition is not required under the Act, or any other applicable law, regulation
or rule of any governmental agency.

                  (p) OTHER PROVISIONS. The Option Notice shall contain such
other provisions, including, without limitation, restrictions upon exercise of
the Option or the transfer of the Shares received upon an exercise, as the
Committee shall deem advisable.

         6.       TERM OF PLAN

                  Options may be granted pursuant to the Plan from time to time
within a period of ten years from the earlier of the date of adoption of the
Plan or the date on which the Plan is approved by the stockholders of the
Company.

         7.       PROFESSIONAL ASSISTANCE; GOOD FAITH ACTIONS

                  (a) The Committee may employ attorneys, consultants,
accountants, appraisers, brokers or other persons. The Committee, the Company
and the officers and directors of the Company shall be entitled to rely upon the
advice, opinions or valuations of any such persons. All actions taken and all
interpretations and determinations made by the Committee shall be final and
binding upon all Optionees, the Company and all other interested persons. No
member of the Committee shall be personally liable for any action, determination
or interpretation made with respect to the Plan or the Options and all members
of the Committee shall be fully protected by the Company in respect to any such
action, determination or interpretation.

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                  (b) In addition to such other rights of indemnification as
they may have as directors or as members of the Committee, the members of the
Committee shall be indemnified by the Company against the reasonable expenses,
including attorneys' fees actually and necessarily incurred in connection with
the defense of any action, suit or proceeding, or in connection with any appeal
therein, to which they or any of them may be a party by reason of any action
taken or failure to act under or in connection with the Plan or any Option
granted thereunder, and against all amounts paid by them in settlement thereof
(provided such settlement is approved by independent legal counsel selected by
the Company) or paid by them in satisfaction of a judgment in any such action,
suit or proceeding except in relation to matters to which it shall be adjudged
in such action, suit or proceeding that such Committee member is liable for
negligence or misconduct in the performance of his duties; provided that within
60 days after institution of any such action, suit or proceeding the Committee
member shall in writing offer the Company the opportunity, at its own expense,
to handle and defend the same.

         8.       AMENDMENT OF THE PLAN

                  The Board of Directors of the Company or the Committee may,
insofar as permitted by law, from time to time, with respect to any Shares not
then subject to Options, suspend or discontinue the Plan or revise or amend it
in any respect whatsoever, subject to the approval of the stockholders of the
Company where such approval is required by law or regulation or pursuant to the
rules of the NYSE or, if the Shares are not listed on the NYSE, the rules of any
other exchange or market on which the Shares may be traded.

         9.       APPLICATION OF FUNDS

                  The proceeds received by the Company from the sale of Shares
pursuant to Options will be used for general corporate purposes.

         10.      NO OBLIGATION TO EXERCISE OPTION

                  The granting of an Option shall impose no obligation upon the
Optionee to exercise such Option.

         11.      APPROVAL OF STOCKHOLDERS

                  This Plan shall be effective upon its approval by the
stockholders of the Company.

         12.      NO EFFECT ON EMPLOYMENT

                  The grant of an Option pursuant to the Plan shall not be
construed to imply or to constitute evidence of any agreement, express or
implied, on the part of the Company or any Subsidiary to employ or continue to
employ any individual or which relates in any way to the responsibilities,
duties or authority of any employee or individual.

         13.      EFFECT OF PLAN UPON OTHER OPTIONS AND COMPENSATION PLANS

                  The adoption of this Plan shall not affect any other
compensation or incentive plans in effect for the Company or any Subsidiary.
Nothing in this Plan shall be construed to limit the right of the Company or any
Subsidiary to (a) establish any other forms of incentives or compensation for
employees or directors of or persons associated with the Company or any
Subsidiary, or (b) grant or assume options otherwise than under this Plan in
connection with any proper corporate purpose, including, but not by way of
limitation, the grant or assumption of options in connection with the
acquisition by purchase, lease, merger, consolidation or otherwise, of the
business, stock or assets of any corporation, firm or association.

                                      -6-SECOND AMENDMENT TO CREDIT AGREEMENT

         THIS  SECOND   AMENDMENT  TO  CREDIT   AGREEMENT   (herein  called  the
"Amendment") made as of June 27, 2000 by and among St. Mary Land and Exploration
Company,  a  Delaware   corporation   ("Borrower"),   Bank  of  America,   N.A.,
individually  and  as  Agent  ("Agent"),   and  the  undersigned   lenders  (the
"Lenders").

                              W I T N E S S E T H:

         WHEREAS,  Borrower,  Agent and Lenders entered into that certain Credit
Agreement  dated  as of June  30,  1998  (as  heretofore  amended,  modified  or
supplemented,  the  "Original  Agreement"),  for the purpose  and  consideration
therein expressed, whereby Lenders became obligated to make loans to Borrower as
therein provided; and

         WHEREAS,  Borrower,  Agent and  Lenders  desire  to amend the  Original
Agreement for the purposes described herein.

         NOW,  THEREFORE,  in  consideration  of the  premises  and  the  mutual
covenants and  agreements  contained  herein and in the Original  Agreement,  in
consideration  of the loans which may  hereafter be made by Lenders to Borrower,
and for other good and valuable  consideration,  the receipt and  sufficiency of
which are hereby acknowledged, the parties hereto do hereby agree as follows:

                                   ARTICLE I.

                           Definitions and References

         Section  1.1.  Terms  Defined  in the  Original  Agreement.  Unless the
                        --------------------------------------------
context otherwise  requires or unless otherwise  expressly  defined herein,  the
terms defined in the Original  Agreement  shall have the same meanings  whenever
used in this Amendment.

         Section  1.2.  Other  Defined  Terms.   Unless  the  context  otherwise
                        ----------------------
requires,  the  following  terms  when  used in this  Amendment  shall  have the
meanings assigned to them in this Section 1.2.

                  "Amendment" means this Second Amendment to Credit Agreement.

                  "Credit  Agreement"  means the  Original  Agreement as amended
                  hereby.

                                   ARTICLE II.

               Amendment to Original Agreement and Designation of
                          New Aggregate Borrowing Base

         Section 2.1.  Defined Terms.  The following definitions in  Section 1.1
                       -------------
of  the Original  Agreement are  hereby  amended in their  entirety  to  read as
follows:

<PAGE>

                  "'Base Rate Margin' means with respect to each Base Rate Loan:

                  (a) when the Debt to Capitalization  Ratio in effect hereunder
         is less than 0.5 to 1.0, zero, or

                  (b) when the Debt to Capitalization  Ratio in effect hereunder
         is greater than or equal to 0.50 to 1.0, 0.25%."

                  "'Eurodollar Margin' means

                  (a) during the Tranche A Revolving Period with respect to each
         Eurodollar Loan:

                           (i) when the Debt to  Capitalization  Ratio in effect
                  hereunder is less than 0.30 to 1.0, 0.75%, or

                           (ii) when the Debt to Capitalization  Ratio in effect
                  hereunder  is  greater  than or  equal to 0.30 to 1.0 but less
                  than 0.40 to 1.0, 1.00%, or

                           (iii) when the Debt to Capitalization Ratio in effect
                  hereunder  is  greater  than or  equal to 0.40 to 1.0 but less
                  than 0.5 to 1.0, 1.125%, or

                           (iv) when the Debt to Capitalization  Ratio in effect
                  hereunder is greater than or equal to 0.50 to 1.0, 1.375%; and

                  (b) after the Tranche A Revolving  Period with respect to each
         Eurodollar Loan:

                           (i) when the Debt to  Capitalization  Ratio in effect
                  hereunder is less than 0.30 to 1.0, 0.875%, or

                           (ii) when the Debt to Capitalization  Ratio in effect
                  hereunder  is  greater  than or  equal to 0.30 to 1.0 but less
                  than 0.40 to 1.0, 1.125%, or

                           (iii) when the Debt to Capitalization Ratio in effect
                  hereunder  is  greater  than or  equal to 0.40 to 1.0 but less
                  than 0.5 to 1.0, 1.375%, or

                           (iv) when the Debt to Capitalization  Ratio in effect
                  hereunder is greater than or equal to 0.50 to 1.0, 1.625%."

                  "'Permitted  Investments'  means  (a)  Cash  Equivalents,  (b)
         Investments  by Borrower in any of its wholly owned  Subsidiaries,  and
         (c) so long as no  Default  or Event of  Default  has  occurred  and is
         continuing  and the Facility  Usage does not exceed the Borrowing  Base
         then in effect,  (1) loans to or  guaranties of  obligations  of or the
         acquisition  of  capital  stock or equity  interest  in Summo  Minerals
         Corporation  or a direct  property  interest in any  property  owned by
         Summo Minerals  Corporation  provided that

                                       2

<PAGE>

         the aggregate  amount of such loans,  guaranties of  obligations of and
         consideration  paid by  Borrower  for  such  capital  stock  equity  or
         property  interest  does  not  exceed  the sum of  $12,500,000  and (2)
         repurchases  of capital  stock of Borrower  provided that the aggregate
         amount paid by Borrower in connection with such  repurchases  shall not
         exceed $20,000,000."

                  "'Tranche A Maturity Date' means December 31, 2006."

                  "'Tranche  A  Revolving  Period'  means  the  period  from and
                  including the date hereof until June 30, 2003."

                  "'Tranche B Maturity Date' means June 26, 2001."

         Section 2.2. Extension of Tranche A Revolving Period.  Borrower may, at
                      ----------------------------------------
its option and from time to time during the Tranche A Revolving Period,  request
that the  Tranche A  Revolving  Period be  extended  for a period of one year by
delivering to Agent,  not more than sixty (60) days and not less than forty-five
(45) days prior to the last day of the then current Tranche A Revolving  Period,
a written request that the Lenders extend the Tranche A Revolving Period.  Agent
shall  forthwith  provide a copy of such  request to each of the  Lenders.  Each
Lender shall,  within thirty (30) days after the date such Lender  receives such
request from Agent, either (i) notify Agent in writing of its acceptance of such
request,  and the  terms and  conditions,  if any,  upon  which  such  Lender is
prepared  to extend the  Tranche A Revolving  Period,  or (ii)  notify  Agent in
writing that such request has been  denied.  In the event any Lender  determines
not to grant any such extension, Agent shall promptly so notify Borrower.

         Section 2.3.  Tranche B Loan Commitment Fee.  Section  2.5(c)(i) of the
                       ------------------------------
Original  Agreement is hereby  deleted in its  entirety  and  replaced  with the
following:

                  "(i) when the Debt to Capitalization Ratio in effect hereunder
         is less than 0.50 to 1.0, 0.25% per annum;"

         Section  2.4.  Regularly  Scheduled  Payments of Principal of Tranche A
Note. Section 2.7(c) of the Original Agreement is hereby deleted in its entirety
and replaced with the following:

                  "(c)  Regularly  Scheduled  Payments of Principal of Tranche A
         Note.  The  principal of the Tranche A Note shall be due and payable in
         fourteen (14) quarterly  installments,  each of which shall be equal to
         the  greater  of (i)  one-fourteenth  (1/14)  of the  aggregate  unpaid
         principal  balance  of the  Tranche A Note at the end of the  Tranche A
         Revolving  Period or (ii)  sixty  percent  (60%) of the Net Oil and Gas
         Revenues during the applicable Accounting Quarter, and shall be due and
         payable on the last day of each Fiscal Quarter, beginning September 30,
         2003 and continuing  regularly  thereafter until the Tranche A Maturity
         Date, at which time the unpaid principal  balance of the Tranche A Note
         and all interest accrued thereon shall be due and payable in full."

         Section 2.5. Indebtedness.  Section 7.1(h) of the Original Agreement is
                      -------------
hereby deleted in its entirety and replaced with the following:

                                       3

<PAGE>

                 "(h)  Miscellaneous  items of  Indebtedness  not  described in
         subsections (a) through (h) which do not in the aggregate  (taking into
         account  all  such  Indebtedness  of  all  Restricted  Persons)  exceed
         $3,000,000 at any one time outstanding."

         Section 2.6. New  Aggregate  Borrowing  Base.  Pursuant to Section 2.9,
                      --------------------------------
Agent  hereby  notifies  Borrower  that the  Aggregate  Borrowing  Base shall be
$40,000,000 from the date hereof until the next Determination Date.

         Section 2.7. Schedule 1. Schedule 1 of the Original Agreement is hereby
                      -----------
deleted in its entirety and replaced with Schedule 1 attached hereto.

                                  ARTICLE III.

                           Conditions of Effectiveness

         Section 3.1.  Effective Date. This Amendment shall become  effective as
                       ---------------
of the date first above written when and only when:

                  (a) Agent shall have received all of the following, at Agent's
         office,   duly  executed  and  delivered  and  in  form  and  substance
         satisfactory to Agent, all of the following:

                           (i)      this Amendment;

                           (ii) a certificate of the Secretary of Borrower dated
                  the  date  of  this   Amendment   certifying:   (i)  that  the
                  resolutions attached to that certain Omnibus Certificate dated
                  as of June 30, 1998 (the "Original Certificate") authorize the
                  execution,  delivery  and  performance  of this  Amendment  by
                  Borrower;  (ii)  that the  names  and true  signatures  of the
                  officers of the Borrower attached to the Original  Certificate
                  are authorized to sign this  Amendment;  and (iii) that all of
                  the  representations  and  warranties  set forth in Article IV
                  hereof  are  true  and  correct  at and as of the time of such
                  effectiveness;

                           (iii) for subsequent  delivery to each Lender,  (A) a
                  new Tranche A Note for each Lender with appropriate insertions
                  payable to the order of the appropriate  Lender,  each in form
                  attached  hereto as Exhibit  A-1 and (B) a new  Tranche B Note
                  for each Lender  with  appropriate  insertions  payable to the
                  order of the appropriate  Lender, each in form attached hereto
                  as Exhibit A-2;

                           (iv) several  Assignment and Acceptances of even date
                  herewith by and between (i) U.S.  Bank  National  Association,
                  Comerica  Bank-Texas,  Borrower  and  Agent,  (ii)  U.S.  Bank
                  National  Association,  Norwest Bank Colorado,  N.A., Borrower
                  and  Agent,  and (iii) Bank of  America,  N.A.,  Norwest  Bank
                  Colorado,  N.A. and Borrower,  each in form attached hereto as
                  Exhibit B;

                                       4

<PAGE>

                           (v) such  other  supporting  documents  as Agent  may
                  reasonably request; and

                  (b) Borrower  shall have paid,  in  connection  with such Loan
         Documents,  all fees and reimbursements to be paid to Agent pursuant to
         any Loan  Documents,  or  otherwise  due Agent and  including  fees and
         disbursements of Agent's attorneys.

                                   ARTICLE IV.

                         Representations and Warranties

         Section 4.1.  Representations  and Warranties of Borrower.  In order to
                       --------------------------------------------
induce  each  Lender  to enter  into this  Amendment,  Borrower  represents  and
warrants to each Lender that:

                  (a) The representations and warranties  contained in Article V
         of the Original Agreement are true and correct at and as of the time of
         the effectiveness hereof.

                  (b) Borrower has duly taken all action  necessary to authorize
         the execution and delivery by it of this Amendment and to authorize the
         consummation   of  the   transactions   contemplated   hereby  and  the
         performance of its obligations  hereunder.  Borrower is duly authorized
         to borrow funds under the Credit Agreement.

                  (c) The execution and delivery by Borrower of this  Amendment,
         the  performance  by  Borrower  of its  obligations  hereunder  and the
         consummation of the  transactions  contemplated  hereby do not and will
         not  (i)  conflict   with  any  provision  of  (1)  any  Law,  (2)  the
         organizational  documents of Borrower, or (3) any agreement,  judgment,
         license,  order or permit applicable to or binding upon Borrower,  (ii)
         result in the  acceleration of any  Indebtedness  owed by Borrower,  or
         (iii)  result in or require the creation of any Lien upon any assets of
         properties of Borrower.  Except as expressly  contemplated  in the Loan
         Documents  no  consent,  approval,  authorization  or order of,  and no
         notice to or filing  with,  and  Tribunal or third party is required in
         connection  with the execution,  delivery or performance by Borrower of
         this Amendment or to consummate any transactions contemplated hereby.

                  (d) When duly executed and  delivered,  each of this Amendment
         and the Credit Agreement will be a legal,  valid and binding obligation
         of Borrower,  enforceable in accordance with its terms,  except as such
         enforcement may be limited by bankruptcy, insolvency or similar Laws of
         general application relating to the enforcement of creditors' rights.

                  (e) The audited annual  Consolidated  financial  statements of
         Borrower  dated as of  December  31, 1999 and the  unaudited  quarterly
         Consolidated  financial  statements  of Borrower  dated as of March 31,
         2000 fairly present Borrower's  Consolidated financial position at such
         dates  and  the  Consolidated  results  of  Borrower's  operations  and
         Borrower's Consolidated cash flows for the periods ending on such dates
         for Borrower.

                                       5

<PAGE>

         Copies of such financial statements have heretofore been
         delivered to each Lender.  Since such dates no Material  Adverse Change
         has occurred.

                                   ARTICLE V.

                                  Miscellaneous

         Section 5.1.  Ratification  of  Agreements.  The Original  Agreement as
                       -----------------------------
hereby  amended is hereby  ratified  and  confirmed  in all  respects.  The Loan
Documents,  as  they  may  be  amended  or  affected  by the  various  Amendment
Documents,  are hereby ratified and confirmed in all respects.  Any reference to
the Credit  Agreement in any Loan Document  shall be deemed to be a reference to
the  Original  Agreement  as  hereby  amended.   The  execution,   delivery  and
effectiveness of this Amendment shall not, except as expressly  provided herein,
operate  as a waiver of any right,  power or remedy of Lenders  under the Credit
Agreement,  the Notes, or any other Loan Document nor constitute a waiver of any
provision of the Credit Agreement, the Notes or any other Loan Document.

         Section 5.2. Survival of Agreements. All of Borrower's representations,
                      -----------------------
warranties,  covenants  and  agreements  herein shall  survive the execution and
delivery of this Amendment and the performance  hereof,  including the making or
granting of the Loans,  and shall further  survive until all of the  Obligations
are  paid in full to each  Lender  and all of  Lender  Parties'  obligations  to
Borrower  are  terminated.  All  statements  and  agreements  contained  in  any
certificate  or instrument  delivered by Borrower  hereunder or under the Credit
Agreement  to any  Lender  shall be deemed  representations  and  warranties  by
Borrower or agreements  and covenants of Borrower under this Amendment and under
the Credit Agreement.

         Section 5.3. Loan Documents. This Amendment is a Loan Document, and all
                      ---------------
provisions in the Credit Agreement pertaining to Loan Documents apply hereto.

         Section 5.4.  Governing Law. This Amendment  shall be deemed a contract
                       --------------
and  instrument  made  under  the laws of the  State of  Colorado  and  shall be
construed and enforced in accordance  with and governed by the laws of the State
of Colorado and the laws of the United States of America,  without regard to the
principles of conflicts of law.

         Section 5.5. Counterparts. This Amendment may be separately executed in
                      -------------
any  number  of  counterparts  and  by  different  parties  hereto  in  separate
counterparts,  each of which when so executed  shall be deemed to constitute one
and the same Amendment.

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

                                       6

<PAGE>

         IN WITNESS  WHEREOF,  this  Amendment  is executed as of the date first
above written.

                                             ST. MARY LAND & EXPLORATION COMPANY

                                             By:/S/RICHARD C. NORRIS
                                                --------------------
                                                Name:RICHARD C. NORRIS
                                                Title:VICE PRESIDENT - FINANCE

                                                Address:

                                                1776 Lincoln Street
                                                Denver, Colorado 80203
                                                Attention: Richard C. Norris
                                                Fax: (303) 861-0934

<PAGE>

                                             BANK OF AMERICA, N.A.
                                             Agent, LC Issuer and Lender

                                             By: /S/TRACEY S. BARCLAY
                                                 --------------------
                                                 Tracey S. Barclay
                                                 Principal

                                                 Address:

                                                 901 Main Street, 64th Floor
                                                 Dallas, Texas 75202
                                                 Fax:     (214) 290-8371

                                                 with a copy to:

                                                 Tracey S. Barclay
                                                 Bank of America, N.A.
                                                 Energy Group
                                                 333 Clay Street, Suite 4550
                                                 Houston, TX  77002
                                                 fax:     (713) 651-4807

<PAGE>

                                             COMERICA BANK-TEXAS,
                                             a Lender

                                             By:/S/DAVID MONTGOMERY
                                                -------------------
                                                David Montgomery
                                                Vice President

                                                Address:
                                                P.O. Box 650282
                                                MC 6593
                                                Dallas, Texas 75265-0282
                                                Telephone:   (214) 969-6565
                                                Fax:         (214) 969-6561

<PAGE>

                                             WELLS FARGO BANK WEST, N.A.,
                                             formerly  known  as
                                             NORWEST BANK OF COLORADO, N.A., a
                                             Lender

                                             By:/s/THOMAS M. FONCANNON
                                                ----------------------
                                                Thomas M. Foncannon
                                                Senior Vice President

                                                Address:

                                                1740 Broadway
                                                Denver, Colorado  80274-8699
                                                Attention:  Thomas M. Foncannon
                                                Fax:   (303) 863-5196

<PAGE>
<TABLE>
<CAPTION>

                                   SCHEDULE 1

                               LENDER COMMITMENTS
                                                                          MAXIMUM ALLOCATIONS
                                                                  -------------------------------------
                               PERCENTAGE       MAXIMUM LOAN          TRANCHE A          TRANCHE B
NAME OF LENDER                    SHARE            AMOUNT               LOAN               LOAN
---------------------------- ---------------- ------------------  ------------------ ------------------
<S>                          <C>              <C>                 <C>                <C>
Bank of America, N.A.              50%        $  100,000,000      $  100,000,000     $   25,000,000
Comerica Bank-Texas                25%        $   50,000,000      $   50,000,000     $   12,500,000
Wells Fargo Bank West, N.A.        25%        $   50,000,000      $   50,000,000     $   12,500,000
</TABLE>

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