10-Q

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                  ------------


                                    FORM 10-Q


       QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

                For the Quarterly Period Ended September 30, 2001

                                  ------------


                         Commission File Number 0-20872

                     ST. MARY LAND & EXPLORATION COMPANY
             (Exact name of registrant as specified in its charter)


            Delaware                                     41-0518430
  (State or other jurisdiction             (I.R.S. Employer Identification No.)
of incorporation or organization)

             1776 Lincoln Street, Suite 1100, Denver, Colorado 80203
               (Address of principal executive offices) (Zip Code)

                                 (303) 861-8140
              (Registrant's telephone number, including area code)




Indicate by check mark whether the registrant (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 [ ]

Indicate the number of shares outstanding of each of the registrant's classes of
common stock as of the latest practicable date.


As of November 7, 2001 the  registrant  had  27,733,684  shares of common stock,
$.01 par value, outstanding.



                     ST. MARY LAND & EXPLORATION COMPANY

                                      INDEX

Part I.    FINANCIAL INFORMATION                                            PAGE
                                                                            ----

           Item 1.         Financial Statements (Unaudited)

                           Consolidated Balance
                           Sheets - September 30, 2001 and
                           December 31, 2000...................................3

                           Consolidated Statements of
                           Operations - Three and Nine Months Ended
                           September 30, 2001 and 2000.........................4

                           Consolidated Statements of
                           Cash Flows - Nine Months Ended
                           September 30, 2001 and 2000.........................5

                           Consolidated Statements of
                           Stockholders' Equity - September 30, 2001
                           and December 31, 2000...............................7

                           Notes to Consolidated Financial
                           Statements - September 30, 2001.....................8

           Item 2.         Management's Discussion and Analysis
                           of Financial Condition and Results
                           of Operations......................................11

           Item 3.         Quantitative and Qualitative Disclosures
                           About Market Risk..................................21


Part II.   OTHER INFORMATION

           Item 2.         Changes in Securities and Use of Proceeds..........22

           Item 5.         Other Information..................................22

           Item 6.         Exhibits and Reports on Form 8-K...................22







PART I.  FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

            ST. MARY LAND & EXPLORATION COMPANY AND SUBSIDIARIES
                     CONSOLIDATED BALANCE SHEETS (UNAUDITED)
                      (In thousands, except share amounts)

                                    ASSETS                              September 30,      December 31,
                                                                       --------------     -------------
                                                                           2001               2000
                                                                       --------------     -------------

Current assets:
   Cash and cash equivalents                                               $   6,198         $   6,619
   Accounts receivable                                                        36,207            55,068
   Prepaid expenses and other                                                  2,414             2,134
   Refundable income taxes                                                     7,029                 -
   Accrued hedge asset                                                         5,342                 -
   Deferred income taxes                                                           -               163
                                                                       --------------     -------------
Total current assets                                                          57,190            63,984
                                                                       --------------     -------------
Property and equipment (successful efforts method), at cost:
   Proved oil and gas properties                                             457,983           385,076
   Less accumulated depletion, depreciation and amortization                (204,200)         (171,412)
   Unproved oil and gas properties, net of impairment
      allowance of $8,270 in 2001 and $7,956 in 2000                          54,957            35,497
   Other property and equipment, net of accumulated
      depreciation of $2,944 in 2001 and $3,600 in 2000                        3,244             3,250
                                                                       --------------     -------------
Total property and equipment                                                 311,984           252,411
                                                                       --------------     -------------
Other assets:
   Khanty Mansiysk Oil Corporation stock                                       1,651             1,651
   Other assets                                                                3,907             3,849
                                                                       --------------     -------------
Total other assets                                                             5,558             5,500
                                                                       --------------     -------------
Total Assets                                                               $ 374,732         $ 321,895
                                                                       ==============     =============

                      LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
   Accounts payable and accrued expenses                                   $  31,935         $  23,345
   Deferred income taxes                                                       1,860                 -
                                                                       --------------     -------------
Total current liabilities                                                     33,795            23,345
                                                                       --------------     -------------
Long-term liabilities:
   Long-term debt                                                             14,350            22,000
   Deferred income taxes                                                      42,494            24,820
   Other noncurrent liabilities                                                  616               987
                                                                       --------------     -------------
Total long-term liabilities                                                   57,460            47,807
                                                                       --------------     -------------

Commitments and contingencies
                                                                       --------------     -------------
Minority interest                                                                581               607
                                                                       --------------     -------------
Stockholders' equity:
   Common stock, $.01 par value: authorized - 100,000,000 shares:
   Issued and outstanding - 28,740,184 shares in 2001
      and 28,553,826 shares in 2000                                              287               286
   Additional paid-in capital                                                136,743           132,973
   Treasury stock - at cost: 1,009,900 shares in 2001
      and 395,600 shares in 2000                                             (16,210)           (3,339)
   Retained earnings                                                         158,155           120,075
   Unrealized net gain on marketable equity
      securities-available for sale                                               82               141
   Unrealized hedge gain                                                       3,839                 -
                                                                       --------------     -------------
Total stockholders' equity                                                   282,896           250,136
                                                                       --------------     -------------
Total Liabilities and Stockholders' Equity                                 $ 374,732         $ 321,895
                                                                       ==============     =============

              The accompanying notes are an integral part of these
                       consolidated financial statements.


                                      -3-


            ST. MARY LAND & EXPLORATION COMPANY AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
                    (In thousands, except per share amounts)

                                                   For the Three Months Ended   For the Nine Months Ended
                                                           September 30,              September 30,
                                                   ---------------------------  -------------------------
                                                       2001         2000           2001         2000
                                                   ------------- -------------  ------------ ------------
Operating revenues:
Oil and gas production                                $  41,859    $   54,066     $ 165,195    $ 134,898
Gain (loss) on sale of proved properties                    (71)            8           (21)       2,340
Other oil and gas revenue                                   374           188           939        1,062
Other revenues                                              494            52           666          247
                                                   ------------- -------------  ------------ ------------
Total operating revenues                                 42,656        54,314       166,779      138,547
                                                   ------------- -------------  ------------ ------------

Operating expenses:
Oil and gas production                                   14,756        10,307        40,249       27,355
Depletion, depreciation and amortization                 13,704         9,627        37,876       26,805
Exploration                                               4,347         2,346        14,858        6,749
Impairment of proved properties                             576           852           820        2,802
Abandonment and impairment of unproved properties           659           732         1,733        2,021
General and administrative                                2,804         2,343        10,361        7,438
Minority interest and other                                 283           (56)          662        1,178
                                                   ------------- -------------  ------------ ------------
Total operating expenses                                 37,129        26,151       106,559       74,348
                                                   ------------- -------------  ------------ ------------

Income from operations                                    5,527        28,163        60,220       64,199

Nonoperating income and (expense):
Interest income                                              73           252           408          655
Interest expense                                             (5)          (25)          (40)        (148)
                                                   ------------- -------------  ------------ ------------

Income before income taxes                                5,595        28,390        60,588       64,706
Income tax expense                                          734        11,251        21,100       25,084
                                                   ------------- -------------  ------------ ------------

Net income                                            $   4,861     $  17,139     $  39,488    $  39,622
                                                   ============= =============  ============ ============



Basic net income per common share                     $    0.17     $    0.61     $    1.41    $    1.43
                                                   ============= =============  ============ ============
Diluted net income per common share                   $    0.17     $    0.60     $    1.38    $    1.41
                                                   ============= =============  ============ ============

Basic weighted average common shares outstanding         27,790        27,920        28,052       27,690
                                                   ============= =============  ============ ============
Diluted weighted average common shares outstanding       28,252        28,535        28,620       28,151
                                                   ============= ============   ============ ============

Cash dividends declared per share                     $       -     $   0.025     $   0.050    $   0.075
                                                   ============= =============  ============ ============

              The accompanying notes are an integral part of these
                       consolidated financial statements.


                                      -4-


            ST. MARY LAND & EXPLORATION COMPANY AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
                                 (In thousands)

                                                                           For the Nine Months Ended
                                                                                  September 30,
                                                                       ---------------------------------
                                                                           2001                2000
                                                                       -------------       -------------
Reconciliation of net income to net cash provided by operating activities:
   Net income                                                              $ 39,488            $ 39,622
   Adjustments to reconcile net income to net
         cash provided by operating activities:
      Loss (gain) on sale of proved properties                                   21              (2,340)
      Depletion, depreciation and amortization                               37,876              26,805
      Impairment of proved properties                                           820               2,802
      Exploration, including exploratory dry hole expense                     5,847               1,302
      Abandonment and impairment of unproved properties                       1,733               2,021
      Deferred income taxes                                                  18,700              20,585
      Minority interest and other                                              (199)                430
                                                                       -------------       -------------
                                                                            104,286              91,227
   Changes in current assets and liabilities:
      Accounts receivable                                                     9,647             (30,333)
      Prepaid expenses and other                                             (7,607)             (1,970)
      Accounts payable and accrued expenses                                   5,543              (3,193)
                                                                       -------------       -------------
   Net cash provided by operating activities                                111,869              55,731
                                                                       -------------       -------------
   Cash flows from investing activities:
      Proceeds from sale of oil and gas properties                            1,469               1,819
      Capital expenditures                                                  (99,844)            (45,509)
      Acquisition of oil and gas properties                                  (1,620)            (13,529)
      Proceeds from distribution of KMOC stock                                7,371                   -
      Other                                                                    (118)                931
                                                                       -------------       -------------
   Net cash used in investing activities                                    (92,742)            (56,288)
                                                                       -------------       -------------
   Cash flows from financing activities:
      Proceeds from long-term debt                                           75,200              22,700
      Repayment of long-term debt                                           (82,850)            (32,700)
      Proceeds from sale of common stock                                      2,381               5,351
      Repurchase of common stock                                            (12,871)               (345)
      Dividends paid                                                         (1,408)             (2,073)
                                                                       -------------       -------------
   Net cash used in financing activities                                    (19,548)             (7,067)
                                                                       -------------       -------------
   Net decrease in cash and cash equivalents                                   (421)             (7,624)
   Cash and cash equivalents at beginning of period                           6,619              14,195
                                                                       -------------       -------------
   Cash and cash equivalents at end of period                              $  6,198            $  6,571
                                                                       =============       =============

              The accompanying notes are an integral part of these
                       consolidated financial statements.


                                      -5-


            ST. MARY LAND & EXPLORATION COMPANY AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
                                   (Continued)



Supplemental schedule of additional cash flow information and noncash investing
and financing activities:

                                                    For the Nine Months Ended
                                                         September 30,
                                                --------------------------------
                                                    2001                2000
                                                -------------       ------------
                                                         (In thousands)

Cash paid for interest                          $        356        $        745

Cash paid for income taxes                            10,428               7,127

Cash paid for exploration expenses                    14,926               6,711




In January 2000 the Company issued 8,400 shares of common stock to its directors
and recorded compensation expense of $88,368.

In June 2000 the Company received equipment valued at $1,201,000 as partial
proceeds for property sold.

In January 2001 the Company issued 8,400 shares of common stock to its directors
and recorded compensation expense of $237,852

              The accompanying notes are an integral part of these
                       consolidated financial statements.


                                      -6-


            ST. MARY LAND & EXPLORATION COMPANY AND SUBSIDIARIES
           CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED)
                      (In thousands, except share amounts)

                                                                                                          Accumulated
                                               Common Stock   Additional              Treasury Stock         Other         Total
                                           ------------------   Paid-in  Retained  --------------------- Comprehensive Stockholders'
                                             Shares    Amount   Capital  Earnings     Shares    Amount      Income        Equity
                                           ----------  ------ ---------- --------- ----------- --------- ------------- -------------


Balance, December 31, 1999                 27,893,910  $  279 $  123,974 $ 67,230    (365,600) $ (2,995) $        284   $   188,772

Comprehensive income:
    Net Income                                      -       -          -   55,620           -         -              -       55,620
    Unrealized net loss on marketable equity
       securities available for sale                -       -          -        -           -         -           (143)        (143)
                                                                                                                        ------------
Total comprehensive income                                                                                                   55,477
                                                                                                                        ------------
Cash dividends, $ 0.10 per share                    -       -          -   (2,775)          -         -              -       (2,775)
Treasury stock purchases                            -       -          -        -     (30,000)     (344)             -         (344)
Issuance for Employee Stock Purchase           32,296       -        311        -           -         -              -          311
ESPP disqualified distribution                      -       -          3        -           -         -              -            3
Sale of common stock, including income tax
       benefit of stock option exercises      619,220       6      8,597        -           -         -              -        8,603
Directors' stock compensation                   8,400       1         88        -           -         -              -           89
                                           ----------  ------ ---------- --------- ----------- --------- -------------- ------------

Balance, December 31, 2000                 28,553,826  $  286 $  132,973 $120,075    (395,600) $ (3,339) $         141  $   250,136

Comprehensive income:
    Net Income                                      -       -          -   39,488           -         -              -       34,627
    Unrealized net loss on marketable equity
       securities available for sale                -       -          -        -           -         -            (59)         (59)
    Unrealized hedge gain                           -       -          -        -           -         -          3,839        3,839
                                                                                                                        ------------
Total comprehensive income                                                                                                   43,628
                                                                                                                        ------------
Cash dividends, $ 0.05 per share                    -       -          -   (1,408)          -         -              -       (1,413)
Treasury stock purchases                            -       -          -        -    (614,300)  (12,871)             -      (10,949)
Issuance for Employee Stock Purchase Plan      19,337       -        367        -           -         -              -          149
Sale of common stock, including income tax
       benefit of stock option exercises      158,621       1      3,165        -           -         -              -        2,265
Directors' stock compensation                   8,400       -        238        -           -         -              -          238
                                           ----------  ------ ---------- --------- ----------- --------- -------------- ------------

Balance, September 30, 2001                28,740,184  $  287 $  136,743 $158,155  (1,009,900) $(16,210) $      (1,043) $   273,869
                                           ==========  ====== ========== ========= =========== ========= ============== ============

              The accompanying notes are an integral part of these
                       consolidated financial statements.


                                       -7-


            ST. MARY LAND & EXPLORATION COMPANY AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)
                                   -----------

                               September 30, 2001

Note 1 - Basis of Presentation

          The accompanying unaudited condensed consolidated financial statements
of St. Mary Land & Exploration Company and Subsidiaries ("St. Mary" or the
"Company") have been prepared in accordance with accounting principles generally
accepted in the United States for interim financial information. They do not
include all information and notes required by generally accepted accounting
principles for complete financial statements. However, except as disclosed
herein, there has been no material change in the information disclosed in the
notes to consolidated financial statements included in St. Mary's Annual Report
on Form 10-K for the year ended December 31, 2000. In the opinion of Management,
all adjustments (consisting of normal recurring accruals) considered necessary
for a fair presentation have been included. Operating results for the periods
presented are not necessarily indicative of the results that may be expected for
the full year.

          The accounting  policies followed by the Company are set forth in Note
1 to the Company's  consolidated  financial  statements in the Form 10-K for the
year ended  December 31, 2000. It is suggested  that these  unaudited  condensed
consolidated  financial  statements be read in conjunction with the consolidated
financial statements and notes included in the Form 10-K.

Note 2 - Capital Stock

          In July 2000 St.  Mary's  board of  directors  approved a  two-for-one
stock split  effected  in the form of a stock  dividend  whereby one  additional
common share of stock was  distributed  for each common share  outstanding.  The
stock split was distributed on September 5, 2000 to shareholders of record as of
the close of business on August 21,  2000.  All share and per share  amounts for
all periods presented herein have been restated to reflect this stock split.

          In August  1998 the  Company's  board of  directors  approved  a stock
repurchase  program  whereby the Company may purchase from time to time, in open
market  purchases or negotiated  sales,  up to two million  shares of its common
stock.  During the third quarter of 2001 the Company  repurchased 100,000 shares
of its common stock under the program at a weighted  average price of $19.22 per
share.  To date in 2001 we have purchased  614,300 shares at a weighted  average
price of $20.64 per share, bringing the total number of shares repurchased under
the  program  to  1,009,900  at a  weighted  average  price of $15.86 per share.
Additional  purchases  of shares by the Company  may occur as market  conditions
warrant.  Such purchases would be funded with internal cash flows and borrowings
under the Company's credit facility.

          In April 2001 the Company  sold  100,000 put options on its own common
stock for  $99,000  in cash.  These put  options  gave the  holder  the right to
require the Company to  purchase  up to 100,000  shares of its own common  stock
from the  holder at $20.22 per share on July 11,  2001.  These  options  expired
unexercised. In June 2001 the Company sold 100,000 put options on its own common
stock for  $94,000  in cash.  These put  options  gave the  holder  the right to
require the Company to  purchase  up to 100,000  shares of its own common  stock
from the holder at $19.22 per share on September 24, 2001. The holder  exercised
these options,  and the Company purchased 100,000 shares of its own common stock
at $19.22 per share on September 24, 2001.


                                      -8-


Note 3 - Income Taxes

          Federal  income  tax  expense  for the  three  and nine  months  ended
September  30, 2001 and 2000  differ from the amounts  that would be provided by
applying the  statutory  U.S.  Federal  income tax rate to income  before income
taxes primarily due to Section 29 credits,  percentage depletion, and the effect
of state income taxes.  During 2000 the Company  utilized its net operating loss
carryover and resulting  deferred tax asset from 1999. At September 30, 2001 the
Company's current portion of income tax expense was $4,910,000.

Note 4 - Long-term Debt

          On April 30,  2001 St. Mary  entered  into an  agreement  to amend the
existing long-term  revolving credit agreement.  The maximum loan amount remains
at $200.0  million.  The  lender may  periodically  re-determine  the  aggregate
borrowing base depending upon the value of St. Mary's oil and gas properties and
other  assets.  The amendment  increases the borrowing  base by $30.0 million to
$170.0 million.  The accepted  borrowing base was $40.0 million at September 30,
2001. The credit agreement has a maturity date of December 31, 2006 and includes
a revolving period that matures on June 30, 2003. The amended  agreement deletes
all references to and provisions of the short-term tranche previously  available
to  St.  Mary.  The  Company  must  comply  with  certain  covenants   including
maintenance  of  stockholders'  equity at a specified  level and  limitations on
additional  indebtedness.  The Company had $14,350,000 in outstanding borrowings
under its revolving  credit  agreement as of September 30, 2001 and the weighted
average interest rate paid for the nine months ended September 30, 2001 was 8.8%
including  commitment fees paid on the unused portion of the borrowing base. The
Company's debt to total  capitalization ratio as defined under the agreement was
4.8% as of September 30, 2001.

Note 5 - Financial Instruments

          On  January  1,  2001  the  Company  adopted  statement  of  Financial
Accounting  Standards ("SFAS") No. 133,  "Accounting for Derivative  Instruments
and Hedging  Activities."  The  adoption of SFAS No. 133 resulted in the Company
recording  a  liability  of  $45,699,000  for the fair  value of the  derivative
instruments  at  January 1, 2001.  The  Company's  adoption  entry  resulted  in
deferral of the recognition of this liability to accumulated other comprehensive
loss of  $28,587,000  at January 1, 2001.  For the first nine months of 2001 the
Company  recognized no net hedge loss from hedge  ineffectiveness  on derivative
instruments that were designated and qualified as cash flow hedging instruments.
St. Mary anticipates that all hedge  transactions will occur as expected.  Based
on current prices the Company  anticipates that $3,482,000 of the after-tax gain
amount included in accumulated and other  comprehensive  income will be included
in earnings during the next 12 months.

          The  Company  seeks to protect its rate of return on  acquisitions  of
producing  properties  by hedging cash flow when the economic  criteria from its
evaluation  and pricing  model  indicate it would be  appropriate.  Management's
strategy is to hedge cash flows from investments requiring a gas price in excess
of $2.75 per Mcf and an oil  price in excess of $22.00  per Bbl in order to meet
minimum  rate-of-return  criteria.  The Company  anticipates  this strategy will
result in the hedging of future cash flow from acquisitions.  St. Mary generally
limits its aggregate hedge position to no more than 35% of its total  production
but will  hedge up to 50% of total  production  in  certain  circumstances.  The
Company  seeks to  minimize  basis risk and index the  majority of oil hedges to
NYMEX  prices and the  majority of gas hedges to various  regional  index prices
associated with pipelines in proximity to its areas of gas production.


                                      -9-


Note 6 - Newly Issued Accounting Standards

          In June 2001 the Financial  Accounting Standards Board ("FASB") issued
SFAS No.  141,  "Business  Combinations."  Under  this  statement  all  business
combinations must be accounted for under the purchase method. The pooling method
is no longer allowed.  The statement also establishes criteria to assess when to
recognize intangible assets separately from goodwill.  SFAS No. 141 is effective
for  business  combinations  initiated  after June 30, 2001 and for all business
combinations  using the  purchase  method for which the date of  acquisition  is
after  June  30,  2001.  At  this  time  the  Company  has no  pending  business
combinations that would be affected by the adoption of this statement.

          In June  2001 the  FASB  issued  SFAS No.  142,  "Goodwill  and  Other
Intangible  Assets." This  statement  addresses the  accounting for goodwill and
other intangible  assets and provides specific guidance for testing goodwill and
other intangible  assets for impairment.  This statement is effective for fiscal
years  beginning  after December 15, 2001. The Company does not anticipate  that
the  adoption of this  statement  will have a material  effect on the  Company's
financial position or results of operations.

          In July  2001 the FASB  issued  SFAS No.  143,  "Accounting  for Asset
Retirement Obligations." This statement requires companies to recognize the fair
value  of  an  asset  retirement   liability  in  the  financial  statements  by
capitalizing that cost as part of the cost of the related  long-lived asset. The
asset  retirement  liability  should  then be  allocated  to  expense by using a
systematic  and rational  method.  The  statement is effective  for fiscal years
beginning  after June 15, 2002. The Company has not yet determined the impact of
adoption of this statement.

          In August  2001 the FASB  issued  SFAS No.  144,  "Accounting  for the
Impairment or Disposal of Long-Lived  Assets." This statement  provides a single
accounting  model  for  long-lived  assets to be  disposed  of and  changes  the
criteria  that would have to be met to classify an asset as  held-for-sale.  The
statement  also requires  expected  future  operating  losses from  discontinued
operations  to be  recognized  in the periods in which the losses are  incurred,
which is a change from the current  requirement  of  recognizing  such operating
losses as of the  measurement  date. The statement is effective for fiscal years
beginning  after  December 15, 2001.  The Company does not  anticipate  that the
adoption of the statement will have a material effect on the Company's financial
position or results of operations.


                                      -10-


ITEM 2.   MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF  FINANCIAL  CONDITION  AND
RESULTS  OF  OPERATIONS

          This Quarterly  Report on Form 10-Q includes  certain  statements that
may be deemed to be  "forward-looking  statements" within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act
of 1934. All statements,  other than statements of historical facts, included in
this Form 10-Q that address  activities,  events or  developments  that St. Mary
management forecasts,  expects, believes or anticipates will or may occur in the
future are forward-looking  statements.  Examples of forward-looking  statements
may include discussion of such matters as:

o         Production forecasts, lease operating expenses,  transportation costs,
          DD&A,  general and  administrative  expenses,  and  current income
          taxes for future periods,
o         the amount and nature of future  capital,  development and exploration
          expenditures,
o         the drilling of wells,
o         reserve  estimates  and the  estimates of both future net revenues and
          the present  value of future net  revenues  that are included in their
          calculation,
o         future oil and gas production estimates,
o         repayment of debt,
o         business strategies,
o         expansion and growth of operations, and
o         other similar matters.

          These statements are based on certain assumptions and analyses made by
us in light of our experience and our perception of historical  trends,  current
conditions,  expected  future  developments  and other  factors we  believe  are
appropriate  in the  circumstances.  Such  statements are subject to a number of
assumptions,  risks and uncertainties,  including such factors as the volatility
and level of oil and natural gas prices,  uncertainties  in cash flow,  expected
acquisition  benefits,   production  rates  and  reserve  replacement,   reserve
estimates, drilling and operating risks, competition,  litigation, environmental
matters, the potential impact of government regulations,  and other matters such
as those  discussed  in the "Risk  Factors"  section of St.  Mary's  2000 Annual
Report on Form 10-K, many of which are beyond our control. Readers are cautioned
that  forward-looking  statements are not guarantees of future  performance  and
that actual results or developments  may differ  materially from those expressed
or implied in the forward-looking statements.


                                      -11-


Results of Operations

         The following table sets forth selected operating data for the periods
indicated:
                                                   Three Months                     Nine Months
                                                   ------------                     -----------
                                                Ended September 30,             Ended September 30,
                                                -------------------             -------------------
                                               2001             2000            2001            2000
                                               -----            -----           -----           ----
                                         (In thousands, except per volume    (In thousands, except per
                                                       data)                        volume data)
 Oil and gas production revenues:
    Gas production                          $  27,044        $  36,244       $ 120,394       $  91,224
    Oil production                             14,815           17,821          44,801          43,674
                                            ---------        ---------       ---------       ---------
        Total                               $  41,859        $  54,066       $ 165,195       $ 134,897
                                            =========        =========       =========       =========

Net production:
   Gas (Mcf)                                    9,754            9,929          29,404          28,710
   Oil (Bbls)                                     609              711           1,812           1,825
                                            ---------        ---------       ---------       ---------
   MCFE                                        13,405           14,195          40,274          39,660
                                            =========        =========       =========       =========

Average sales price (1):
   Gas (per Mcf)                            $    2.77        $    3.65       $    4.09       $    3.18
   Oil (per Bbl)                            $   24.35        $   25.05       $   24.73       $   23.93

Oil and gas production costs:
   Lease operating expense                  $  11,441        $   6,750       $  28,805       $  18,259
   Transportation costs                           601              470
                                                                                 1,739           1,294
   Production taxes                             2,714            3,087           9,705           7,802
                                            ---------        ---------       ---------       ---------
      Total                                 $  14,756        $  10,307       $  40,249       $  27,355
                                            =========        =========       =========       =========

Additional per MCFE data:
   Sales price                              $    3.12        $    3.81       $    4.10       $    3.40
   Lease operating expense                       0.85             0.48            0.72            0.46
   Transportation costs                          0.04             0.03            0.04            0.03
   Production taxes                              0.20             0.22            0.24            0.20
                                            ---------        ---------       ---------       ---------
      Operating margin                      $    2.03        $    3.08       $    3.10       $    2.71
                                            =========        =========       =========       =========

   Depletion, depreciation and amortization $    1.02        $    0.68       $    0.94         $  0.68
   Impairment of proved properties          $    0.04        $    0.06       $    0.02         $  0.07
   General and administrative               $    0.21        $    0.17       $    0.26         $  0.19

      (1)Includes the effects of St. Mary's hedging activities.




                                      -12-


Three-Month Comparison

          Oil and Gas Production Revenues. St. Mary's quarterly oil and gas
production revenues decreased $12.2 million or 23% to $41.9 million for the
three months ended September 30, 2001 compared with $54.1 million for the same
period in 2000. This decrease was the result of an oil production volume
decrease of 14%, a gas production decrease of 2% and decreases in the average
price received for both oil and gas in the third quarter of 2001 compared to
2000. The oil production decrease reflects catch-up production amounts received
from our interest in the Eugene Island 341 well in the third quarter of 2000.
The average realized gas price decreased 24% to $2.77 per Mcf, while the average
realized oil price decreased 3% to $24.35 per Bbl. These decreases were
partially offset by St. Mary's share of revenue from wells completed in 2000 and
2001 that added $4.6 million of revenue, and our December 2000 acquisition of JN
Exploration et al properties that added $1.4 million of revenue. Average net
daily production decreased to 145.7 MMCFE for 2001 compared with 154.3 MMCFE in
2000. A general decrease in daily production from older properties was partially
offset by our December 2000 acquisition of JN Exploration et al properties that
added 6.1 MMCFE per day and wells completed in 2000 and 2001 that added 18.6
MMCFE per day for the three months ended September 30, 2001.

          St. Mary hedged approximately 30% or 184 MBbls of its oil production
for the three months ended September 30, 2001 and realized a $460,000 decrease
in oil revenue attributable to hedging compared with a $3.7 million decrease in
2000. Without these contracts we would have received an average price of $25.11
per Bbl in the third quarter of 2001 compared to $30.20 per Bbl in 2000. St.
Mary also hedged 41% of its 2001 third quarter gas production or 4.4 million
MMBtu and realized a $187,000 increase in gas revenue from hedging compared with
a $6.6 million decrease in 2000. Without these contracts we would have received
an average price of $2.75 per Mcf for the three months ended September 30, 2001
compared to $4.31 per Mcf for the same period in 2000.

          Oil and Gas Production Costs. Oil and gas production costs consist of
lease operating expense, production taxes and transportation expenses. Total
production costs increased $4.4 million or 43% to $14.8 million for the three
months ended September 30, 2001 from $10.3 million in 2000. In the third quarter
of 2001 we experienced a $2.4 million increase in non-recurring LOE as we
continued to take advantage of workover rig availability. Williston basin
acquisitions in 2000 have added $483,000 of production costs. Our JN Exploration
et al acquisition properties represented $441,000 of the total increase. St.
Mary's share of recurring LOE from wells completed in 2000 and 2001 added
another $557,000. We have also experienced higher recurring LOE costs in the
Williston basin, the Permian basin and the Gulf Coast/Gulf of Mexico as a result
of increased competition for limited availability of services and general cost
inflation. Total oil and gas production costs per MCFE increased 51% to $1.10
for the three months ended September 30, 2001 compared with $0.73 for 2000. An
$0.18 per MCFE increase was due to non-recurring LOE. The remaining increase was
due to transportation costs and general cost inflation partially offset by lower
production taxes for the three months ended September 30, 2001.

          Depreciation, Depletion, Amortization and Impairment. Depreciation,
depletion and amortization expense ("DD&A") increased $4.1 million or 42% to
$13.7 million for the three months ended September 30, 2001 from $9.6 million in
2000. DD&A per MCFE increased by 51% to $1.02 for the third quarter of 2001
compared with $0.68 in 2000. This increase reflects acquisitions and drilling
results in 2000 and 2001 that have added costs at a higher per-unit rate. The
unit rate was further affected by downward adjustments to reserves due to the
impact of pricing on the economic quantities of reserves at September 30, 2001.

          Exploration. Exploration expense increased $2.0 million or 85% to $4.3
million for the three months ended September 30, 2001 compared with $2.3 million
in 2000. The increase resulted from an $849,000 increase in exploratory dry hole
costs, a $629,000 increase in personnel costs associated with exploration
activity and a $478,000 increase in geological and geophysical expenses.

          General and Administrative. General and administrative expenses
increased $461,000 or 20% to $2.8 million for the three months ended September
30, 2001 compared with $2.3 million in 2000. Increases in compensation expense
associated with increased personnel, our incentive plans and general cost
inflation were partially offset by a $432,000 increase in COPAS overhead
reimbursement from operations.


                                      -13-


          Income Taxes. Income tax expense totaled $734,000 for the three months
ended September 30, 2001 and $11.3 million in 2000, resulting in effective tax
rates of 13.1% and 39.6%, respectively. The difference in rates between the two
periods reflects the cumulative effect on temporary differences of changes to
estimates of percentage depletion and our state income tax rate based on recent
tax filings.

          Net Income. Net income for the three months ended September 30, 2001
decreased $12.3 million or 72% to $4.9 million compared with $17.1 million in
2000. A 24% decrease in realized average gas prices and a 3% decrease in
realized average oil prices combined with a 2% decrease in gas production and a
14% decrease in oil production resulted in a $12.2 million decrease in oil and
gas production revenue. The increases in production expenses, DD&A,
exploration expense and general and administrative expenses were offset by the
decrease in income tax expense.

Nine-Month Comparison

          Oil and Gas Production Revenues. St. Mary experienced an increase in
oil and gas production revenues of $30.3 million, or 22% to $165.2 million for
the nine months ended September 30, 2001 compared with $134.9 million for the
same period in 2000. The increase was the result of a gas production volume
increase of 2% and increases in the average price received for both oil and gas
in the first nine months of 2001 compared to 2000. This increase was partially
offset by an oil production decrease of 1%. The average realized gas price
increased 29% to $4.09 per Mcf, while the average realized oil price increased
3% to $24.73 per Bbl. St. Mary's share of revenue from wells completed in 2000
and 2001 added $27.8 million of revenue, and our December 2000 acquisition of JN
Exploration et al properties added $9.8 million of revenue. Average net daily
production increased to 147.5 MMCFE for the first nine months of 2001 compared
with 144.7 MMCFE in 2000. Our December 2000 acquisition of JN Exploration et al
properties added daily production of 7.4 MMCFE for the nine months ended
September 30, 2001. Wells completed in 2000 and 2001 offset 20.7 MMCFE of
decline in daily production from older properties.

          St. Mary hedged approximately 31% or 568 MBbls of its oil production
for the nine months ended September 30, 2001 and realized a $2.3 million
decrease in oil revenue attributable to hedging compared with a $9.0 million
decrease in 2000. Without these contracts we would have received an average
price of $26.02 per Bbl for the nine months ended September 30, 2001 compared to
$28.87 per Bbl in 2000. St. Mary also hedged 42% of its gas production or 13.7
million MMBtu and realized a $20.3 million decrease in gas revenue for the nine
months ended September 30, 2001 compared with a $9.4 million decrease in gas
revenue in 2000. Without these contracts we would have received an average price
of $4.78 per Mcf for the nine months ended September 30, 2001 compared to $3.51
per Mcf for the same period in 2000.

          Oil and Gas Production Costs. Oil and gas production costs consist of
lease operating expense, production taxes and transportation expenses. Total
production costs increased $12.9 million or 47% to $40.2 million for the nine
months ended September 30, 2001 from $27.4 million in 2000. In the first nine
months of 2001 we experienced a $3.7 million increase in non-recurring LOE as we
took advantage of workover rig availability. Williston basin acquisitions in the
last half of 2000 added $1.7 million of production costs. Our JN Exploration et
al acquisition properties represented $1.6 million of the total oil and gas
production cost increase. St. Mary's share of recurring LOE from wells completed
in 2000 and 2001 added another $1.5 million. We have also experienced higher
recurring LOE costs in the Williston basin, the Permian basin and the Gulf
Coast/Gulf of Mexico as a result of increased competition for limited
availability of services and general cost inflation. In addition, higher
production taxes and transportation expenses resulting from higher oil and gas
revenues account for $1.5 million of the increase. Total oil and gas production
costs per MCFE increased 45% to $1.00 for the nine months ended September 30,
2001 compared with $0.69 for 2000. A $0.09 per MCFE increase was due to the
increase in non-recurring LOE. Another $0.06 per MCFE increase was due to
increased production taxes and transportation expenses. The remaining increase
is due to general cost inflation.


                                      -14-


          Depreciation, Depletion, Amortization and Impairment. DD&A
increased $11.1 million or 41% to $37.9 million for the nine months ended
September 30, 2001 from $26.8 million in 2000. DD&A per MCFE increased by
39% to $0.94 for the nine months ended September 30, 2001 compared with $0.68 in
2000. This increase reflects acquisitions and drilling results in 2000 and 2001
that added costs at a higher per unit rate. The DD&A per MCFE rate was
further affected by downward adjustments to reserves due to pricing adjustments
at September 30, 2001.

          Exploration. Exploration expense increased $8.1 million or 120% to
$14.9 million for the nine months ended September 30, 2001 compared with $6.7
million in 2000. The increase resulted from a $4.4 million increase in
exploratory dry holes, a $1.4 million increase in geological and geophysical
expense and an increase of $2.3 million in personnel costs associated with
exploration activity.

          General and Administrative. General and administrative expenses
increased $2.9 million or 39% to $10.4 million for the nine months ended
September 30, 2001 compared with $7.4 million in 2000. Increases in compensation
expense associated with increased personnel, our incentive plans and general
cost inflation were partially offset by a $3.2 million increase in COPAS
overhead reimbursement from operations and costs allocated to exploration
expense.

          Income Taxes. Income tax expense totaled $21.1 million for the nine
months ended September 30, 2001 and $25.1 million in 2000, resulting in
effective tax rates of 34.8% and 38.8%, respectively. The difference in rates
between the two periods reflects the cumulative effect on temporary differences
of changes to estimates of percentage depletion and our state income tax rate
based on recent tax filings.

          Net Income. Net income for the nine months ended September 30, 2001
decreased $134,000 to $39.5 million compared with $39.6 million in 2000. A 29%
increase in gas prices and a 3% increase in oil prices combined with a 2%
increase in gas production offset by a 1% decrease in oil production resulted in
a $30.3 million increase in oil and gas production revenue. This increase was
offset by corresponding increases in oil and gas production costs and DD&A
as well as an $8.1 million increase in exploration expense, and a $2.9 million
increase in general and administrative expense but also reflects a $4.0 million
decrease in income tax expense. A decrease in the pre-tax gain on the sale of
proved properties was exactly offset by decreases in proved and unproved
property impairments in 2001.

Liquidity and Capital Resources

          St. Mary's primary sources of liquidity are the cash provided by
operating activities, debt financing, sales of non-strategic properties and
access to the capital markets. Our cash needs are for the acquisition,
exploration and development of oil and gas properties and for the payment of
debt obligations, trade payables and stockholder dividends. Exploration and
development programs are generally financed from internally generated cash flow,
bank debt and cash and cash equivalents on hand. The capital expenditure budget
is continually reviewed based on changes in cash flow and other factors.

          Cash Flow. St. Mary's net cash provided by operating activities
increased $56.1 million or 101% to $111.9 million for the nine months ended
September 30, 2001 compared with $55.7 million in 2000. The increase reflects
the effect of higher oil and gas production revenues, an increase in accounts
payable and a decrease in accounts receivable for the period ended September 30,
2001.

          Exploratory dry hole costs are included in cash flows from investing
activities even though these costs are expensed as incurred. If exploratory dry
hole costs had been included in operating cash flows, the net cash provided by
operating activities would have been $106.0 million and $54.4 million in the
first nine months of 2001 and 2000, respectively.


                                      -15-


          Net cash used in investing activities increased $36.5 million or 65%
to $92.7 million for the nine months ended September 30, 2001 compared with
$56.3 million in 2000. This increase is due to increased capital expenditures
and a decrease in proceeds from the sale of oil and gas properties that are
partially offset by the receipt of $7.4 million of proceeds from the December
2000 sale of KMOC stock. Total capital expenditures, including acquisitions of
oil and gas properties, in the first nine months of 2001 increased $42.4 million
or 72% to $101.5 million compared with $59.0 million in the first nine months of
2000.

          If exploratory dry hole costs had been included in operating cash
flows rather than in investing cash flows, net cash used in investing activities
would have been $86.9 million and $55.0 million in the first nine months of 2001
and 2000, respectively.

          Net cash used in financing activities increased $12.5 million or 177%
to $19.5 million for the nine months ended September 30, 2001 compared with $7.1
million in 2000. St. Mary made net repayments of $7.7 million of debt in 2001
compared to a $10.0 net debt repayment in 2000. Additionally, we repurchased
$12.5 million more of our own common stock and received $3.0 million less in
proceeds from the sale of our common stock during the first three quarters of
2001 compared to 2000. All sales of our common stock resulted from stock option
exercises and sales under St. Mary's employee stock purchase plan.

          St. Mary had $6.2 million in cash and cash equivalents and had working
capital of $23.4 million as of September 30, 2001 compared with $6.6 million in
cash and cash equivalents and working capital of $40.6 million at December 31,
2000. The small change in cash and cash equivalents reflects that our cash
provided by operations was sufficient to cover our increased capital
expenditures, our debt repayment and our repurchase of St. Mary's common stock
during the first nine months of 2001.

          Credit Facility. On April 30, 2001 St. Mary entered into an agreement
to amend the existing long-term revolving credit agreement. The maximum loan
amount remains at $200.0 million. The lender may periodically re-determine the
aggregate borrowing base depending upon the value of St. Mary's oil and gas
properties and other assets. The amendment increases the borrowing base by $30.0
million to $170.0 million. The accepted borrowing base was $40.0 million at
September 30, 2001. The credit agreement has a maturity date of December 31,
2006, and includes a revolving period that matures on June 30, 2003. The amended
agreement deletes all references to and provisions of the short-term tranche
previously available to St. Mary. We must comply with certain covenants
including maintenance of stockholders' equity at a specified level and
limitations on additional indebtedness. As of September 30, 2001 and December
31, 2000, $14.3 million and $22.0 million, respectively, was outstanding under
this credit agreement. These outstanding balances accrue interest at rates
determined by St Mary's debt to total capitalization ratio. During the revolving
period of the loan, loan balances accrue interest at our option of either (1)
the higher of the federal funds rate plus 1/2% or the prime rate, or (2) LIBOR
plus 3/4% when our debt to total capitalization is less than 30%, up to a
maximum of either (a) the higher of the federal funds rate plus 3/4% or the
prime rate plus 1/4%, or (b) LIBOR plus 1-3/8% when our debt to total
capitalization is equal to or greater than 50%. The debt to total capitalization
ratio as defined under the agreement was 4.8% as of September 30, 2001.

          Common Stock. At the annual shareholder meeting on May 23, 2001 the
shareholders of St. Mary voted to increase the amount of authorized common
shares to 100,000,000.

          In July 2000 St. Mary's board of directors approved a two-for-one
stock split effected in the form of a stock dividend whereby one additional
common share of stock was distributed for each common share outstanding. The
stock split was distributed on September 5, 2000 to shareholders of record as of
the close of business on August 21, 2000. All share and per share amounts for
all periods presented herein have been restated to reflect this stock split.


                                      -16-


          In August 1998 St. Mary's board of directors authorized a stock
repurchase program whereby we may purchase from time-to-time, in open market
transactions or negotiated sales, up to two million of our common shares.
Through December 31, 2000 we had repurchased a total of 395,600 shares of St.
Mary's common stock under the program for $3.3 million at a weighted average
price of $8.44 per share. To date in 2001 we have repurchased an additional
614,300 shares for a weighted average price of $20.64 per share. We anticipate
that additional purchases of shares may occur as market conditions warrant. As
part of this program we sold put options in April 2001 whereby the holder had
the right to require St. Mary to purchase up to 100,000 shares of St. Mary's
common stock from the holder at $20.22 per share on July 11, 2001. We received a
$99,000 premium from this sale. These options expired unexercised. In June 2001
we sold additional put options whereby we could be required to purchase up to
100,000 shares of our common stock from the holder at $19.22 per share on
September 24, 2001. We received a $94,000 premium from this sale. The holder
exercised these options, and we repurchased the stock on September 24, 2001. Any
future purchases will be funded with internal cash flow and borrowings under St.
Mary's credit facility.

          Capital and Exploration Expenditures Incurred. St. Mary's expenditures
for exploration and development of oil and gas properties and acquisitions are
the primary use of its capital resources. The following table sets forth certain
information regarding the costs incurred by St. Mary in its oil and gas
activities during the periods indicated:

                                          Capital and Exploration Expenditures
                                          ------------------------------------
                                              Nine Months Ended September 30,
                                              -------------------------------
                                                    2001        2000
                                                    ----        ----
                                                     (In thousands)

          Development                           $   74,346   $  34,004
          Domestic Exploration                      18,451      12,326
          Acquisitions:
            Proved                                   3,819      13,349
            Unproved                                18,188       3,464
                                                ----------   ---------

          Total                                  $ 114,804   $  63,143
                                                ==========   =========

          We continuously evaluate opportunities in the marketplace for oil and
gas properties and, accordingly, may be a buyer or a seller of properties at
various times. We will continue to emphasize smaller niche acquisitions
utilizing St. Mary's technical expertise, financial flexibility and structuring
experience. In addition, we are also actively seeking larger acquisitions of
assets or companies that would afford opportunities to expand our existing core
areas, to acquire additional geoscientists or to gain a significant acreage and
production foothold in a new basin.

          St. Mary's total costs incurred for capital and exploration activities
in the first nine months of 2001 increased $51.7 million or 82% compared to the
first nine months of 2000. We spent $111.0 million in the first nine months of
2001 for unproved property acquisitions and domestic exploration and development
compared to $49.8 million for the comparable period in 2000. Unproved property
acquisitions increased by $14.7 million as a result of general leasing activity
and our acquisition of leases in the Hanging Woman Basin of Montana and Wyoming
for coalbed methane development. A 17 well pilot drilling program will commence
on this property in the fourth quarter of 2001. The remaining increase is
primarily the result of increased drilling activity.


                                      -17-


          In October 2001 we entered into a purchase and sale agreement to
acquire oil and gas properties from Choctaw II Oil & Gas, Ltd. for $41
million in cash. We plan to utilize a portion of our credit facility for the
acquisition. The properties are primarily located in the Williston basin of
Montana and North Dakota and the Green River basin in Wyoming and currently
produce an estimated 1,200 Bbls of oil and 4,600 Mcf of gas per day, net to the
interests to be acquired. The acquisition is expected to close in late November
2001 after completion of due diligence procedures.

          Outlook. Management believes that St Mary's existing capital
resources, cash flows from operations and available borrowings are sufficient to
meet its anticipated capital and operating requirements for the remainder of
2001.

          We now anticipate spending approximately $180.0 million for capital
and exploration expenditures in 2001 with $138.0 million allocated for ongoing
exploration and development and $42.0 million for acquisitions of producing
properties. Anticipated ongoing exploration and development expenditures for
each of St. Mary's core areas is as follows:

o         Mid-Continent region                    $55.0 million
o         Gulf Coast and Gulf of Mexico region    $39.0 million
o         ArkLaTex region                         $15.0 million
o         Williston Basin                         $26.0 million
o         Permian Basin and other                 $ 3.0 million

          The amount not funded from our internally generated cash flow in 2001
can be funded from our credit facility. The amount and allocation of future
capital and exploration expenditures will depend upon a number of factors
including the number and size of available acquisition opportunities and our
ability to assimilate these acquisitions. Also, the impact of oil and gas prices
on investment opportunities, the availability of capital and borrowing
capability and the success of our development and exploratory activity could
lead to funding requirements for further development.

          Natural gas prices declined further during the quarter reflecting a
drop in demand associated with the downturn in the economy as well as high gas
volumes in storage relative to prior years. We enter this winter season with
very high storage. Stronger prices will depend on a colder winter and a
recovering economy. Oil prices fell some at the end of the quarter but still
remain in historically normal ranges. With declining demand we anticipate that
oil prices we receive in the future will reflect OPEC policy and discipline. Our
production base and balance sheet continue to be strong. We have experienced
general cost inflation in both the drilling and service sector of our industry.
We note however that rig and service availability are easing and that costs have
flattened or declined modestly. Our recent experience in the acquisition market
for properties has been varied. We were successful in our bid for properties
from Choctaw II Oil & Gas, Ltd., but we generally feel that the market
continues to be overheated. We remain disciplined and patient. We are currently
forecasting the following information for St. Mary for 2001:

o         Production                                    53-55 BCFE
o         Lease operating expense, including
          production taxes and transportation           $0.95-1.05/MCFE
o         Depreciation, depletion and amortization      $0.95-1.05/MCFE
o         General and administrative expense            $0.24-0.28/MCFE
o         Income taxes to be paid in the current year
          are expected to approximate between 5% and
          10% of total tax expense and will depend
          upon prices we receive and actual expenditures
          for intangible drilling costs
o         Discretionary cash flows-a common industry
          financial measure computed as net income
          using a NYMEX gas price of $4.44 and a NYMEX
          oil price of $26.38 plus depreciation,
          depletion, amortization, impairments,
          deferred taxes and exploration expense        $4.75-$5.25/common share


                                      -18-


          St. Mary seeks to protect its rate of return on acquisitions of
producing properties by hedging cash flow when the economic criteria from its
evaluation and pricing model indicate it would be appropriate. Management's
strategy is to hedge cash flows from investments requiring a gas price in excess
of $2.75 per Mcf and an oil price in excess of $22.00 per Bbl in order to meet
minimum rate-of-return criteria. We anticipate this strategy will result in the
hedging of future cash flow from acquisitions. We generally limit St. Mary's
aggregate hedge position to no more than 35% of total production but will hedge
up to 50% of total production in certain circumstances. We seek to minimize
basis risk and index the majority of oil hedges to NYMEX prices and the majority
of gas hedges to various regional index prices associated with pipelines in
proximity to St. Mary's areas of gas production. Please see the discussion in
Accounting Matters below. Including hedges entered into since September 30, 2001
we have hedged as follows:


Swaps:
                     Average         Quantity        Average
    Product       Volumes/month        Type        Fixed price       Duration
    -------       -------------        ----        -----------       --------
  Natural Gas        193,000          MMBtu             $3.56     10/01 - 12/01
  Natural Gas        204,000          MMBtu             $3.15     01/02 - 12/02
  Natural Gas        100,000          MMBtu             $2.74     01/03 - 12/03

      Oil             49,400           Bbls            $25.66     10/01 - 12/01
      Oil            119,600           Bbls            $24.73     01/02 - 12/02
      Oil             79,800           Bbls            $22.71     01/03 - 12/03

Collars:
                    Average
    Product      Volumes/month    Ceiling Price    Floor Price      Duration
    -------      -------------    -------------    -----------      --------
  Natural Gas    150,000 MMBtu         $2.9400          $2.3000    10/01 - 12/01
  Natural Gas    150,000 MMBtu         $2.9000          $2.3000    10/01 - 12/01
  Natural Gas    250,000 MMBtu         $2.8775          $2.3540    10/01 - 12/01
  Natural Gas    250,000 MMBtu         $2.8192          $2.3540    10/01 - 12/01
  Natural Gas    250,000 MMBtu         $3.5000          $2.4000    10/01 - 12/01
  Natural Gas    350,000 MMBtu         $5.8000          $3.0000    10/01 - 12/01

      Oil          7,500 Bbls         $20.6400         $16.4400    10/01 - 12/01
      Oil          7,500 Bbls         $20.9000         $16.7000    10/01 - 12/01
      Oil         15,000 Bbls         $27.2200         $19.0000    10/01 - 12/01
      Oil          7,000 Bbls         $21.0000         $18.0000    10/01 - 12/01
      Oil         10,000 Bbls         $25.1000         $19.5000    10/01 - 12/01

          If all these commodity hedging contracts had closed on September 30,
2001 St. Mary would have received approximately $5.8 million based on
quarter-end pricing. As of that date we had no margin deposits outstanding to
counterparties.


                                      -19-


Accounting Matters

          On January 1, 2001 we adopted Statement of Financial Accounting
Standards ("SFAS") No. 133, "Accounting for Derivative Instruments and Hedging
Activities." The adoption of SFAS No. 133 resulted in St. Mary recording a
liability of $45.7 million for the fair value of the derivative instruments at
January 1, 2001. The adoption entry resulted in deferral of the recognition of
this liability to accumulated other comprehensive loss of $28.6 million at
January 1, 2001. For the first nine months of 2001 we recognized no net hedge
gain or loss from hedge ineffectiveness on derivative instruments that were
designated and qualified as cash flow hedging instruments. We anticipate that
all hedge transactions will occur as expected. Based on current prices we
anticipate that $3.5 million of the after tax income amount included in
accumulated and other comprehensive income will be included in earnings during
the next 12 months.

          In June 2001 the FASB issued SFAS No. 141, "Business Combinations."
Under this statement all business combinations must be accounted for under the
purchase method. The pooling method is no longer allowed. The statement also
establishes criteria to assess when to recognize intangible assets separately
from goodwill. SFAS No. 141 is effective for business combinations initiated
after June 30, 2001 and for all business combinations using the purchase method
for which the date of acquisition is after June 30, 2001. At this time we have
no pending business combinations that would be affected by the adoption of this
statement.

          In June 2001 the FASB issued SFAS No. 142, "Goodwill and Other
Intangible Assets." This statement addresses the accounting for goodwill and
other intangible assets and provides specific guidance for testing goodwill and
other intangible assets for impairment. This statement is effective for fiscal
years beginning after December 15, 2001. We do not anticipate that the adoption
of this statement will have a material effect on our financial position or
results of operations.

          In July 2001 the FASB issued SFAS No. 143, "Accounting for Asset
Retirement Obligations." This statement requires companies to recognize the fair
value of an asset retirement liability in the financial statements by
capitalizing that cost as part of the cost of the related long-lived asset. The
asset retirement liability should then be allocated to expense by using a
systematic and rational method. The statement is effective for fiscal years
beginning after June 15, 2002. We have not determined the impact of adoption of
this statement.

          In August 2001 the FASB issued SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets." This statement provides a single
accounting model for long-lived assets to be disposed of and changes the
criteria that would have to be met to classify an asset as held-for-sale. The
statement also requires expected future operating losses from discontinued
operations to be recognized in the periods in which the losses are incurred,
which is a change from the current requirement of recognizing such operating
losses as of the measurement date. The statement is effective for fiscal years
beginning after December 15, 2001. We do not anticipate that the adoption of the
statement will have a material effect on St. Mary's financial position or
results of operations.


                                      -20-


ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

          St. Mary holds derivative contracts and financial instruments that
have cash flow and net income exposure to changes in commodity prices or
interest rates. Financial and commodity-based derivative contracts are used to
limit the risks inherent in some crude oil and natural gas price changes that
have an effect on us. In prior years we have occasionally hedged interest rates,
and may do so in the future should circumstances warrant.

          Our board of directors has adopted a policy regarding the use of
derivative instruments. This policy requires every derivative used by St. Mary
to relate to underlying offsetting positions, anticipated transactions or firm
commitments. It prohibits the use of speculative, highly complex or leveraged
derivatives. Under the policy, the Chief Executive Officer and Vice President of
Finance must review and approve all risk management programs that use
derivatives. The board of directors periodically reviews these programs.

          Commodity Price Risk. St. Mary uses various hedging arrangements to
manage its exposure to price risk from its natural gas and crude oil production.
These hedging arrangements have the effect of locking in for specified periods,
at predetermined prices or ranges of prices, the prices we will receive for the
volumes to which the hedge relates. Consequently, while these hedging
arrangements are structured to reduce our exposure to decreases in prices
associated with the hedged commodity, they also limit the benefit we might
otherwise receive from any price increases associated with the hedged commodity.
The derivative gain or loss effectively offsets the loss or gain on the
underlying commodity exposures that have been hedged. The fair values of the
swaps are estimated based on quoted market prices of comparable contracts and
approximate the net gains or losses that would have been realized if the
contracts had been closed out at quarter-end. The fair values of the futures are
based on quoted market prices obtained from the New York Mercantile Exchange.

          A hypothetical $0.10 per MMBtu change in St. Mary's quarter-end market
prices for natural gas swaps and futures contracts on a notional amount of 8.4
million MMBtu would cause a potential $416,000 change in net income before
income taxes for contracts in place on September 30, 2001. A hypothetical $1.00
per Bbl change in our quarter-end market prices for crude oil swaps and future
contracts on a notional amount of 2.7 MMBbls would cause a potential $2.3
million change in net income before income taxes for oil contracts in place on
September 30, 2001. These hypothetical changes were discounted to present value
using a 7.5% discount rate since the latest expected maturity date of certain
swaps and futures contracts is greater than one year from the reporting date.

          Interest Rate Risk. Market risk is estimated as the potential change
in fair value resulting from an immediate hypothetical one percentage point
parallel shift in the yield curve. A sensitivity analysis presents the
hypothetical change in fair value of those financial instruments held by St.
Mary at September 30, 2001 which are sensitive to changes in interest rates. For
fixed-rate debt, interest rate changes affect the fair market value but do not
impact results of operations or cash flows. Conversely for floating rate debt,
interest rate changes generally do not affect the fair market value but do
impact future results of operations and cash flows, assuming other factors are
held constant. The carrying amount of our floating rate debt approximates its
fair value. At September 30, 2001 we had floating rate debt of $14.4 million and
had no fixed rate debt. Assuming constant debt levels, the impact on results of
operations and cash flows for the remainder of the year resulting from a
one-percentage-point change in interest rates would be approximately $36,000
before taxes.


                                      -21-


PART II.  OTHER INFORMATION

ITEM 2.   Changes in Securities and Use of  Proceeds
          ------------------------------------------
          (c) In June 2001 St. Mary sold to a different single purchaser 100,000
          put options on its own common stock for $94,000 in cash. Those put
          options gave the holder the right to require St. Mary to purchase up
          to 100,000 shares of its own common stock from the holder at $19.22
          per share on September 24, 2001. The holder exercised those options,
          and St. Mary was required to purchase 100,000 shares of its own common
          stock at 19.22 per share. The above securities were not registered
          under the Securities Act of 1933 in reliance on the exemption from
          registration provided by Section 4(2) of the Securities Act for
          transactions by an issuer not involving any public offering since the
          two purchasers are accredited investors and the option documents
          reflect the fact that the purchasers purchased the securities for
          their own account without a view to the distribution thereof.

ITEM 5.  Other Information
         -----------------
                    In St. Mary's proxy statement dated April 12, 2001 for the
          2001 annual meeting of stockholders held on May 23, 2001, St. Mary
          disclosed under the caption "Future Stockholder Proposals" that if
          notice of a St. Mary stockholder proposal for the annual meeting of
          stockholders in 2002 for which the stockholder will conduct his or her
          own proxy solicitation is not received by March 1, 2002, proxies
          solicited by the St. Mary board of directors may use their
          discretionary voting authority when the matter is raised at the
          meeting, without including any discussion of the matter in the proxy
          statement.

                    However, on July 19, 2001, the St. Mary board of directors
          adopted amendments to the St. Mary by-laws to establish advance notice
          requirements and deadlines for notice of business (including director
          nominations) to be properly presented by a stockholder at an annual
          meeting of stockholders that supersedes the deadline disclosed in the
          April 12, 2001 proxy statement. Those by-law provisions generally
          require that advance written notice in proper form (as set forth in
          the by-laws) of stockholder proposals for matters to be brought before
          the next regularly scheduled annual stockholders meeting, including
          the nominations of directors be received by St. Mary not less than 75
          days nor more than 105 days before the first anniversary date of the
          immediately preceding annual meeting of stockholders. Accordingly,
          notice of stockholder proposals for the annual meeting of stockholders
          in 2002 must be received by St. Mary between February 7, 2002 and
          March 9, 2002. If a stockholder proposal or director nomination is not
          made in accordance with the by-laws, as amended, such proposal or
          nomination shall be disregarded at the meeting of stockholders.

ITEM 6.   Exhibits and Reports on Form 8-K
          --------------------------------
          (a)      Exhibit       Description
                   -------       -----------
                   3.1           Restated    By-Laws   of  St Mary  Land   &
                                 Exploration Company as amended in July 2001
                   10.1          Form of Change of Control Severance Agreements

          (b)      No  reports  on Form 8-K  were filed during the quarter ended
                   September 30, 2001.


                                      -22-


                                   SIGNATURES
                                   ----------


         Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.

                                  ST. MARY LAND & EXPLORATION COMPANY


November 9, 2001                  By  /s/ MARK A. HELLERSTEIN
                                      -----------------------------------
                                      Mark A. Hellerstein
                                      President and Chief Executive Officer


November 9, 2001                  By  /s/ RICHARD C. NORRIS
                                      -----------------------------------
                                      Richard C. Norris
                                      Vice President - Finance, Secretary
                                      and Treasurer


November 9, 2001                  By  /s/ GARRY A. WILKENING
                                      -----------------------------------
                                      Garry A. Wilkening
                                      Vice President - Administration and
                                      Controller

EX-3.(II)

                                                                     EXHIBIT 3.1                                                                                                                                7/19/01



                                RESTATED BY-LAWS

                                       OF

                       ST. MARY LAND & EXPLORATION COMPANY

                                ----------------

                                      NAME

          1. The title of this  Corporation  is St. Mary Land &  Exploration
Company.

                                     OFFICE

          2. This  Corporation may establish or discontinue,  from time to time,
such  offices and places of business  within or without the State of Delaware as
the Board of  Directors  may deem  proper for the  conduct of the  Corporation's
business.

                                      SEAL

          3. The corporate seal of this Corporation shall have inscribed thereon
the  name of  this  Corporation  and the  year  of its  creation  and the  words
"Corporate Seal, Delaware."

                             STOCKHOLDERS' MEETINGS

          4. (a) The  annual  meeting of the  Stockholders  shall be held on the
third  Thursday  in May of each year,  or at such other time,  at the  principal
office of the Corporation,  or such other place,  within or without the State of
Colorado,  as the Board of Directors may determine,  when the Stockholders shall
elect a Board of Directors for the ensuing year and transact such other business
as may come before it.

             (b) Special meetings of the Stockholders shall be held at the place
prescribed for the annual  meetings,  unless  otherwise  ordered by the Board of
Directors,  and may be called by the Chairman of the Board and the  President or
on the written  request of any four  Directors  who may include the  Chairman of
Board or the President.

             (c)  Except as  otherwise  provided  by law or the  Certificate  of
Incorporation, the holders of one-third (1/3) of the shares of the capital stock
entitled to vote at the meeting present in person or by proxy shall constitute a
quorum at all  meetings of the  Stockholders.  In the  absence of a quorum,  the
holders of a majority of such shares of stock  present in person or by proxy may
adjourn any meeting from time to time,  until a quorum shall be present.  At any
such  adjourned  meeting at which a quorum may be present,  any  business may be
transacted which might have been transacted at the meeting as originally called.
No notice of any adjourned  meeting need be given other than by  announcement at
the meeting that is being  adjourned,  provided that if the  adjournment  is for
more than thirty  (30) days,  or if after the  adjournment  a new record date is
fixed for the adjourned meeting, then a notice of the adjourned meeting shall be
given to each Stockholder of record entitled to vote at the meeting.

             (d) Each Stockholder of record,  as determined  pursuant to Article
16 of these By-Laws,  shall be entitled to one vote either in person or by proxy
for each  share of  capital  stock  registered  in his name on the  books of the
Corporation,  provided,  that, each  stockholder of record of a fractional share
shall be entitled to a vote equal to such fractional share.  Except as otherwise
provided by law, by the  Certificate of  Incorporation  or by Article 5 of these
By-Laws,  all  elections  of  directors  and all  other  actions  to be taken by
Stockholders  shall be decided by the vote of the  holders of a majority  of the
shares  of  capital  stock  present  in person  or by proxy at the  meeting  and
entitled to vote in the election or on the action.

             (e) Notice of the  meetings and the conduct of the same shall be as
prescribed  by the  Board  of  Directors,  subject  to  applicable  law  and the
provisions of these By-Laws.

             (f) Any action  required to be taken, or which may be taken, at any
meeting of Stockholders may be taken without a meeting, without prior notice and
without a vote,  if a consent  in  writing,  setting  forth the action so taken,
shall be signed by the holders of shares of outstanding capital stock having not
less than the minimum  number of votes that would be  necessary  to authorize or
take such  action at a meeting  at which all  shares of stock  entitled  to vote
thereon were present and voted;  provided,  that prompt  notice of the taking of
corporate action without a meeting by less than unanimous  written consent shall
be given to those Stockholders who have not consented in writing.

             (g) At an annual  meeting of the  Stockholders,  only such business
shall be conducted as shall have been properly brought before the meeting. To be
properly brought before an annual meeting, business must be (i) specified in the
notice of meeting (or any  supplement  thereto)  given by or at the direction of
the  Board  of  Directors  (or any  duly  authorized  committee  thereof),  (ii)
otherwise  properly  brought before the annual meeting by or at the direction of
the Board of Directors  (or any duly  authorized  committee  thereof),  or (iii)
otherwise  properly  brought before the annual meeting by any Stockholder of the
Corporation  (A) who is a  Stockholder  of record  on the date of the  giving of
notice  provided  for in this  subsection  (g) and on the  record  date  for the
determination  of  Stockholders  entitled to vote at such annual meeting and (B)
who complies with the notice procedures set forth in this subsection (g).

             In addition to any other applicable  requirements,  for business to
be properly brought before an annual meeting by a Stockholder,  such Stockholder
must have given timely notice thereof in proper written form to the Secretary of
the Corporation.

             To be  timely,  a  Stockholder's  notice to the  Secretary  must be
delivered to, or mailed and received at, the principal  executive offices of the
Corporation not less than  seventy-five (75) days nor more than one hundred five
(105)  days prior to the first  anniversary  date of the  immediately  preceding
annual meeting of the Stockholders,  provided,  however, that if the date of the
annual  meeting is called for a date that is not within  twenty (20) days before
or after such anniversary  date, in order to be timely notice by the Stockholder
must be so  delivered  or  received  not later than the close of business on the
tenth (10th) day following the day on which public disclosure of the date of the
annual meeting is first made.

             To be in  proper  written  form,  a  Stockholder's  notice  to  the
Secretary  must set forth as to each  matter the  Stockholder  proposes to bring
before the annual meeting (i) a brief  description of the proposal desired to be
brought before the annual  meeting and the reasons for conducting  such business
at the  annual  meeting,  (ii) the  name  and  address,  as they  appear  on the
Corporation's  books, of the  Stockholder  proposing such business and any other
Stockholders known by such Stockholder to be supporting such proposal, (iii) the
class and number of shares of the  Corporation's  capital  stock which are owned
beneficially  and of record by the  Stockholder on the date of such  Stockholder
notice and by any other  Stockholders known by such Stockholder to be supporting
such proposal on the date of such Stockholder  notice, (iv) a description of all
arrangements or understandings  between such Stockholder and any other person or
persons (including their names) in connection with the proposal of such business
by such  Stockholder  and any  material  interest  of such  Stockholder  in such
proposal and (v) a  representation  that such  Stockholder  intends to appear in
person or by proxy at the  annual  meeting  to bring  such  business  before the
meeting.

             No  business  shall  be  conducted  at an  annual  meeting  of  the
Stockholders  except  business  brought  before the annual meeting in accordance
with the procedures set forth in this subsection (g),  provided,  however,  that
once business has been properly  brought before the annual meeting in accordance
with such procedures, nothing in this subsection (g) shall be deemed to preclude
discussion by any Stockholder of any such business. If the Chairman of an annual
meeting  determines  that  business was not properly  brought  before the annual
meeting in accordance with the foregoing procedures,  the Chairman shall declare
to the meeting that the business was not properly brought before the meeting and
such business shall not be transacted.

             (h) Only persons who are nominated in accordance with the following
procedures  shall be eligible for the election as Directors of the  Corporation.
Nominations of persons for election to the Board of Directors may be made at any
annual  meeting  of  the  Stockholders,   or  at  any  special  meeting  of  the
Stockholders  called for the  purpose  of  electing  Directors  (i) by or at the
direction of the Board of Directors (or any duly authorized  committee thereof),
or (ii) by any Stockholder of the Corporation (A) who is a Stockholder of record
on the date of the giving of the notice  provided for in this subsection (h) and
on the record date for the  determination  of Stockholders  entitled to vote for
the election of  Directors at such meeting and (B) who complies  with the notice
procedures set forth in this subsection (h).

             In addition to any other applicable requirements,  for a nomination
to be made by a  Stockholder  such  Stockholder  must have given  timely  notice
thereof in proper written form to the Secretary of the Corporation.

             To be  timely,  a  Stockholder's  notice to the  Secretary  must be
delivered to, or mailed and received at, the principal  executive offices of the
Corporation (i) in the case of an annual meeting of the  Stockholders,  not less
than  seventy-five  (75) days nor more than one hundred five (105) days prior to
the first  anniversary  date of the immediately  preceding annual meeting of the
Stockholders,  provided,  however,  that if the date of the  annual  meeting  is
called  for a date that is not  within  twenty  (20) days  before or after  such
anniversary  date,  in order to be timely notice by the  Stockholder  must be so
delivered  or received  not later than the close of business on the tenth (10th)
day  following  the day on which  public  disclosure  of the date of the  annual
meeting  is  first  made,  and  (ii) in the  case of a  special  meeting  of the
Stockholders  called for the purpose of electing  Directors,  not later than the
close of  business on the tenth  (10th) day  following  the day on which  public
disclosure of the date of such meeting is first made.

             To be in  proper  written  form,  a  Stockholder's  notice  to  the
Secretary must set forth (i) as to each person whom the Stockholder  proposes to
nominate for election as a Director,  (A) the name,  age,  business  address and
residence address of the person,  (B) the principal  occupation or employment of
the  person,  (C) the  class  and  number  of  shares  of  capital  stock of the
Corporation that are owned beneficially and of record by the person, and (D) any
other information  relating to the person that would be required to be disclosed
in a proxy  statement or other filings  required to be made in  connection  with
solicitations of proxies for election of directors pursuant to Section 14 of the
Securities  Exchange Act of 1934, as amended (the "Exchange Act"), and the rules
and regulations  promulgated  thereunder,  and (ii) as to the Stockholder giving
the notice, (A) the name and address, as they appear on the Corporation's books,
of such  Stockholder,  (B) the class and  number of shares of the  Corporation's
capital stock which are owned  beneficially and of record by such Stockholder on
the date of such  Stockholder  notice,  (C) a description of all arrangements or
understandings  between such Stockholder and each proposed nominee and any other
person or persons  (including  their names) pursuant to which the  nomination(s)
are to be made by such Stockholder,  (D) a representation  that such Stockholder
intends to appear in person or by proxy at the meeting to  nominate  the persons
named in the notice and (E) any other  information  relating to such Stockholder
that would be required to be  disclosed in a proxy  statement  or other  filings
required to be made in connection with  solicitations of proxies for election of
directors  pursuant  to  Section  14 of the  Exchange  Act  and  the  rules  and
regulations promulgated thereunder. Such notice must be accompanied by a written
consent of each  proposed  nominee to being named as a nominee and to serve as a
Director if elected.

             No person  shall be  eligible  for  election  as a Director  of the
Corporation unless nominated in accordance with the procedures set forth in this
subsection  (h). If the Chairman of the meeting of the  Stockholders  determines
that a nomination was not made in accordance with the foregoing procedures,  the
Chairman shall declare to the meeting that the nomination was defective and such
defective nomination shall be disregarded.


                                    DIRECTORS

          5. (a) The property and business of this Corporation  shall be managed
by a Board of at least three Directors.

             (b) The  number  of  Directors  may be fixed  from  time to time by
resolution by the Board of Directors but shall not be less than three; the Board
of  Directors  may at any  regular or  special  meeting  increase  its number by
electing  additional members to hold office until the next annual meeting of the
Stockholders,  or until their successors shall be elected and qualified or until
their earlier resignation or removal.

             (c)  Regular  meetings of the Board of  Directors  shall be held at
such times as may be  determined  by resolution of the Board of Directors and no
notice shall be required for any regular meeting.  Except as otherwise  provided
by law, any business may be  transacted  at any regular  meeting of the Board of
Directors.

             (d) Special  meetings of the Board of Directors  shall be called by
the Secretary on the request of the  President,  or on the request in writing of
any two other Directors stating the purpose or purposes of such meeting.  Notice
of any special  meeting shall be in form approved by the  President.  Notices of
special  meetings  shall be mailed  to each  Director,  addressed  to him at his
residence or usual place of  business,  not later than three (3) days before the
day on which the meeting is to be held, or shall be sent to him at such place by
telegraph,  cable  or  other  form of  recorded  communication  or be  delivered
personally or by  telephone,  not later than the day before such day of meeting.
Notice  of any  meeting  of the  Board  of  Directors  need  not be given to any
Director if he shall sign a written  waiver  thereof  either before or after the
time stated  therein,  or if he shall  attend a meeting,  except when he attends
such  meeting for the express  purpose of  objecting,  at the  beginning  of the
meeting,  to the transaction of any business because the meeting is not lawfully
called or convened.  Neither the business to be  transacted  at, nor the purpose
of, any  special  meeting of the Board of  Directors  need be  specified  in any
notice or written waiver of notice. Unless limited by law, by the Certificate of
Incorporation or by these By-Laws, any and all business may be transacted at any
special meeting.

             (e) A majority of the whole Board of Directors  (the whole Board of
Directors  being the number of  Directors  fixed by  resolution  of the Board of
Directors  from time to time) shall  constitute a quorum for the  transaction of
business at any meeting of the Board of  Directors.  The act of the  majority of
the Directors present at a meeting at which a quorum is present shall be the act
of the Board of Directors unless  otherwise  provided by law, the Certificate of
Incorporation  or these  By-Laws.  A majority  of the  Directors  present at any
meeting may adjourn the meeting from time to time without  further  notice other
than announcement at the meeting.  If at any meeting a quorum is not present,  a
majority of the  Directors  present  may  adjourn the meeting  from time to time
without notice other than announcement at the meeting until a quorum is present.

             (f) Any action  required or permitted to be taken at any meeting of
the Board of  Directors,  or of any  committee  thereof,  may be taken without a
meeting if all members of the Board of Directors,  or of such committee,  as the
case may be, consent thereto in writing,  and such written consent is filed with
the minutes of the  proceedings of the Board of Directors or of such  committee.
Furthermore,  members of the Board of Directors,  or any committee thereof,  may
participate  in a meeting of the Board of Directors,  or of such  committee,  by
means of conference telephone or other similar communications equipment by means
of which all persons  participating  in the  meeting  can hear each  other,  and
participation in a meeting pursuant to this provision shall constitute  presence
in person at such meeting.

             (g) In case of any increase in the number of  Directors,  or of any
vacancy in the Board of Directors, the additional Director or Directors shall be
elected, or, as the case may be, the vacancy or vacancies shall be filled by the
Board of Directors at any meeting by the  affirmative  vote of a majority of the
remaining  Directors,  notwithstanding  that the remaining Directors may be less
than a quorum, or by the sole remaining Director.  The Directors so chosen shall
hold  office  until the next  annual  meeting of  Stockholders  and until  their
successors  are  elected  and  qualify or until  their  earlier  resignation  or
removal.

             (h) By resolution  of the Board of  Directors,  any Director may be
paid any one or more of the  following:  his expenses,  if any, of attendance at
meetings;  a fixed  sum for  attendance  at  meetings;  or a  stated  salary  as
Director.  Nothing herein  contained shall be construed to preclude any Director
from serving the Corporation in any capacity as an officer,  employee,  agent or
otherwise, and receiving compensation therefor.

             (i) The Board of Directors shall have power to elect or appoint all
necessary  officers  and  committees,  to employ  agents,  factors,  clerks  and
workmen,  to require any of them to give such bond for the faithful discharge of
their  duties as may be deemed  wise,  to fix their  compensation,  to prescribe
their  duties,  to dismiss any appointed  officer or employee,  and generally to
control all the officers of the Corporation.

             (j) The Board of Directors may, by resolution  passed by a majority
of  the  whole  Board  of  Directors  as   specified  in  the   Certificate   of
Incorporation,  designate one or more committees, each to consist of one or more
of the  Directors  of the  Corporation,  and may  appoint  chairmen  of any such
committees. To the extent provided in the resolution designating such committee,
and to the  extent  permitted  by law,  each such  committee  shall have and may
exercise the powers of the Board of Directors in the  management of the business
and affairs of the Corporation, and may authorize the seal of the corporation to
be affixed to all  papers  which may  require  it.  The Board of  Directors  may
designate one or more Directors as alternate  members of any committee,  who may
replace any absent or disqualified member at any meeting of the committee.

             (k) The Board of Directors, in addition to the powers and authority
expressly conferred upon them by these By-Laws, may exercise all such powers and
do all such things as may be exercised or done by the Corporation,  but subject,
nevertheless, to the provisions of the law, of the Certificate of Incorporation,
and of these By-Laws.

             (l) A  Director  of the  Company  may be  removed  by a vote of the
Stockholders  for cause,  as  determined by the written  opinion of  independent
counsel of the Company.

                                    OFFICERS

          6. The officers of the  corporation  shall be a Chairman of the Board,
President,  one or more Vice Presidents,  a Secretary, a Treasurer,  one or more
Assistant Secretaries,  one or more Assistant Treasurers,  a Controller and such
other  officers as may from time to time be elected or appointed by the Board of
Directors.  The  determination of whether or not to fill such positions shall be
within the discretion of the Board of Directors, except as otherwise provided by
law. Any offices  except those of President and Vice  President or President and
Secretary  may be held by the  same  person.  All  officers  shall  serve at the
pleasure of the Board of  Directors.  Any officer may be removed by the Board of
Directors  at anytime  with or without  cause.  A vacancy in any office shall be
filled by the Board of Directors.

                              CHAIRMAN OF THE BOARD

          7. The  Chairman  of the Board  shall  preside at all  meetings of the
Stockholders  and at all  meetings  of the  Board of  Directors.  He shall  have
general  powers and duties of management and such other powers and duties as may
be prescribed by the Board of Directors or the By-Laws.

                                    PRESIDENT

          8. The President  shall be a member of the Board of Directors,  and he
shall be the chief  executive  officer  of the  Corporation  and shall  exercise
general  supervision and administration over all its affairs and shall have such
further  duties as are incident to the office of President or  prescribed by law
or as shall from time to time be designated by the Board of Directors. He shall,
in the  absence of the  Chairman  of the Board,  preside at all  meetings of the
Stockholders and Directors. He shall sign or countersign as may be necessary all
such bills, notes, checks, contracts and other instruments as may pertain to the
business  and  affairs  of  the  Corporation,  and  he  shall  sign,  when  duly
authorized, all contracts,  orders, deeds, liens, licenses and other instruments
of a  special  nature.  He  shall,  as far as may  be  possible  and  desirable,
familiarize  himself with and exercise  supervision  over the affairs of this or
any other corporation in which this Corporation may be interested.

                                 VICE-PRESIDENT

          9. In the absence of the President or in the event of his inability or
refusal to act, the  Vice-President,  if any (or, if there be more than one, the
Vice Presidents in the order designated by the President, subject to revision by
the Board of Directors,  and, absent such designation or revision,  in the order
of their first election to that office),  shall perform the duties and discharge
the  responsibilities  of the  President.  They shall have such other duties and
powers as shall from time to time be  designated by the Board of Directors or by
the President.

                                    SECRETARY

          10. The  Secretary  shall be sworn to the  faithful  discharge  of his
duties and shall keep full minutes of all the meetings of the  Stockholders  and
of the Board of  Directors,  and shall  perform  the same duty for the  standing
committees  when  required.  He  shall  issue  all  calls  for  meetings  of the
Stockholders  and Directors and shall notify all officers and Directors of their
election. He shall have charge of the seal of the Corporation and affix the same
to any  instrument  requiring it. He shall have charge of the stock  certificate
books, stock transfer books, and stock ledgers,  and such other books and papers
as the Board of Directors may place in his charge. He shall make such reports to
the Board of  Directors  as they may  require,  and he shall also  prepare  such
reports and statements as may be required by the provisions of the law.

                               ASSISTANT SECRETARY

          11.  The  Assistant  Secretary  (or if there  be more  than  one,  the
Assistant  Secretaries  in the order  designated  by the  President,  subject to
revision by the Board of Directors, and, absent such designation or revision, in
the  order of their  first  election  to that  office)  shall,  in the  absence,
disability, or refusal to act of the Secretary, be vested with all the powers of
the Secretary and shall perform all his duties. He shall assist the Secretary in
the performance of his duties, and shall have such powers and perform such other
duties as the Board of Directors may from time to time direct.

                                    TREASURER

          12.  The  Treasurer  shall  be the  custodian  of all  the  funds  and
securities  of the  Corporation  and shall keep full and  accurate  records  and
accounts in books  provided  for that  purpose of all  receipts,  disbursements,
credits,   assets,   liabilities  and  general  financial  transactions  of  the
Corporation.  He shall endorse for  collection or deposit,  to the credit of the
Corporation,  all bills, notes,  checks and other negotiable  instruments of the
Corporation  coming into his hands in such depositories and safe deposits as may
be  designated  by the Board of  Directors.  He shall  disburse the funds of the
Corporation  as may be  ordered  by the  specific  instructions  of the Board of
Directors or any committee  established thereby,  taking proper vouchers for all
such  disbursements,  and he shall give bond to the  Corporation in such sum and
with  such  surety  as shall  be  satisfactory  to the  proper  officers  of the
Corporation.

                               ASSISTANT TREASURER

          13.  The  Assistant  Treasurer  (or,  if there be more than  one,  the
Assistant  Treasurers  in the order  designated  by the  President,  subject  to
revision by the Board of Directors, and, absent such designation or revision, in
the  order of their  first  election  to that  office)  shall,  in the  absence,
disability or refusal to act of the Treasurer,  be vested with all the powers of
the Treasurer and shall perform all his duties. He shall assist the Treasurer in
the performance of his duties, and shall have such powers and perform such other
duties as the Board of Directors may from time to time direct.

                                   CONTROLLER

          14. The  Controller  shall exercise and perform such powers and duties
with  respect  to  the  administration  of  the  business  and  affairs  of  the
Corporation  as may  from  time to  time  be  assigned  to him by the  Board  of
Directors.

                                 OFFICER PRO TEM

          15. In the absence of any officer, the Board of Directors may delegate
his powers and duties to any other  officers  or to any  Director,  for the time
being.

                                      STOCK

          16.(a)  Every Stockholder shall be entitled to have a certificate,  in
such form as the Board of Directors  shall from time to time approve,  signed by
or in the name of the Corporation by the President or any  Vice-President and by
the Treasurer, an Assistant Treasurer,  the Secretary or an Assistant Secretary,
certifying the number of shares owned by him.

             (b) Any or all the signatures on a certificate  may be a facsimile.
In case  any  officer,  transfer  agent or  registrar  who has  signed  or whose
facsimile  signature has been placed upon a certificate  shall have ceased to be
such officer,  transfer agent or registrar before such certificate is issued, it
may be  issued  by the  Corporation  with the  same  effect  as if he were  such
officer, transfer agent or registrar at the date of issue.

             (c) A  record  of the  name  and  address  of the  holder  of  such
certificate,  the number of shares  represented  thereby,  and the date of issue
thereof,  shall be made on the  Corporation's  books.  The Corporation  shall be
entitled  to treat  the  holder of record of any share or shares of stock as the
holder in fact  thereof,  and  accordingly,  shall not be bound to recognize any
equitable  or other  claim to or  interest in any share on the part of any other
person whether or not it shall have express or other notice  thereof,  except as
required by the laws of Delaware.

             (d) Any person  claiming a stock  certificate  in lieu of one lost,
stolen, mutilated or destroyed shall give the Corporation an affidavit as to his
ownership of the certificate and of the facts as to its loss, theft,  mutilation
or destruction.  He shall also, if required by the Board of Directors,  give the
Corporation  a bond,  in such form and amount as may be approved by the Board of
Directors, sufficient to indemnify the Corporation against any claim that may be
made  against it on account of the alleged loss or theft of the  certificate  or
the issuance of a new certificate.

             (e) The  Corporation  may maintain one or more transfer  offices or
agencies,  each under the control of a transfer agent designated by the Board of
Directors,  where the shares of stock of the Corporation  shall be transferable.
The Corporation may also maintain one or more registry  offices,  each under the
control of a registrar designated by the Board of Directors, wherein such shares
of stock shall be registered.

             (f) Transfer of shares shall, except as provided in paragraph 16(d)
of this Article,  be made on the books of the  Corporation  only by direction of
the person named in the  certificate  or his attorney,  lawfully  constituted in
writing,  and only  upon  the  surrender  for  cancellation  of the  certificate
therefor,  duly endorsed or  accompanied  by a written  assignment of the shares
evidenced thereby.

             (g) In order that the  Corporation  may determine the  Stockholders
entitled  to  notice  of or to  vote  at  any  meeting  of  Stockholders  or any
adjournment  thereof,  or entitled to receive  payment of any  dividend or other
distribution  or allotment of any rights,  or entitled to exercise any rights in
respect of any change, conversion or exchange of stock or for the purpose of any
other lawful action,  the Board of Directors may fix, in advance, a record date,
which  shall not be more than  sixty nor less than ten days  before  the date of
such meeting, nor more than sixty days prior to any other action.

                        INSPECTION OF BOOKS AND ACCOUNTS

          17.  Except  as  otherwise  provided  by law  and the  Certificate  of
Incorporation,  the Directors shall determine from time to time whether, and, if
allowed,  when and under what  conditions and regulations the accounts and books
of the  Corporation,  or any of  them,  shall be open to the  inspection  of the
Stockholders,  and the  Stockholders'  rights in this  respect  are and shall be
restricted and limited accordingly.

                            ALTERATION AND AMENDMENT

          18. The Board of Directors  may by a majority vote of the whole Board,
adopt,  amend or repeal these  By-Laws at any regular  meeting or at any special
meeting.

                                DEFERRED MEETINGS

          19. If any meeting  provided for in these  By-Laws  should fall upon a
legal holiday,  the same shall be held upon the next succeeding  business day at
the same hour and place.

                     INDEMNIFICATION OF OFFICERS, DIRECTORS
                         EMPLOYEES AND AGENTS: INSURANCE

          20.(a)  The  Corporation  shall  indemnify  any person who was or is a
party  or is  threatened  to be  made a  party  to any  threatened,  pending  or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative  (other than an action by or in the right of the  Corporation)  by
reason of the fact that he is or was a Director,  officer,  employee or agent of
the  Corporation,  or is or was  serving at the  request of the  Corporation  as
Director, officer, employee or agent of another corporation,  partnership, joint
venture,  trust or other  enterprise,  against  expenses  (including  attorneys'
fees),  judgments,  fines and amounts paid in settlement actually and reasonably
incurred by him in connection  with such action,  suit or proceeding if he acted
in good faith and in a manner he reasonably  believed to be in or not opposed to
the best interests of the Corporation,  and, with respect to any criminal action
or proceeding,  had no reasonable cause to believe his conduct was unlawful. The
termination of any action,  suit or proceeding by judgment,  order,  settlement,
conviction,  or upon a plea of nolo contendere or its equivalent,  shall not, of
itself,  create a presumption that the person did not act in good faith and in a
manner  which  he  reasonably  believed  to be in or not  opposed  to  the  best
interests  of the  Corporation,  and,  with  respect to any  criminal  action or
proceeding, had reasonable cause to believe that his conduct was unlawful.

             (b) The  Corporation  shall  indemnify  any  person who was or is a
party  or is  threatened  to be  made a  party  to any  threatened,  pending  or
completed  action or suit by or in the  right of the  Corporation  to  procure a
judgment  in its  favor  by  reason  of the fact  that he is or was a  Director,
officer,  employee  or agent of the  Corporation,  or is or was  serving  at the
request of the Corporation as a Director,  officer, employee or agent of another
corporation,  partnership,  joint  venture,  trust or other  enterprise  against
expenses (including  attorneys' fees) actually and reasonably incurred by him in
connection  with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the  Corporation and except that no  indemnification  shall be
made in respect of any claim, issue or matter as to which such person shall have
been adjudged to be liable to the Corporation unless and only to the extent that
the Court of  Chancery  or the court in which  such  action or suit was  brought
shall determine upon application that, despite the adjudication of liability but
in view of all  the  circumstances  of the  case,  such  person  is  fairly  and
reasonably  entitled to indemnity for such expenses  which the Court of Chancery
or such other court shall deem proper.

             (c) To the extent  that a Director,  officer,  employee or agent of
the Corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in subsections (a) and (b), or in defense
of any claim, issue or matter therein,  he shall be indemnified against expenses
(including   attorneys'  fees)  actually  and  reasonably  incurred  by  him  in
connection therewith.

             (d) Any  indemnification  under  subsections  (a)  and (b)  (unless
ordered by a court) shall be made by the  Corporation  only as authorized in the
specific  case  upon a  determination  that  indemnification  of  the  Director,
officer, employee or agent is proper in the circumstances because he has met the
applicable  standard  of  conduct  set forth in  subsections  (a) and (b).  Such
determination  shall be made (1) by the Board of Directors by a majority vote of
a quorum  consisting of Directors  who were not parties to such action,  suit or
proceeding, or (2) if such a quorum is not obtainable,  or, even if obtainable a
quorum of disinterested  directors so directs, by independent legal counsel in a
written opinion.

             (e)  Expenses  incurred by an officer or  Director  in  defending a
civil or criminal action, suit or proceeding shall be paid by the Corporation in
advance of the final disposition of such action, suit or proceeding upon receipt
of an  undertaking  by or on behalf of such  Director  or  officer to repay such
amount  if it shall  ultimately  be  determined  that he is not  entitled  to be
indemnified  by the  Corporation as authorized in this Article 20. Such expenses
incurred  by other  employees  and  agents  may be so paid upon  such  terms and
conditions, if any, as the Board of Directors deems appropriate.

             (f) (i) The  indemnification  and advancement of expenses  provided
by, or granted  pursuant to, the other  subsections of this Article shall not be
deemed exclusive of any other rights to which those seeking  indemnification  or
advancement  of expenses may be entitled  under any by-law,  agreement,  vote of
Stockholders or disinterested Directors, or otherwise,  both as to action in his
official  capacity  and as to action in  another  capacity  while  holding  such
office; and (ii) the indemnification and advancement of expenses provided by, or
granted  pursuant  to,  this  Article  shall,  unless  otherwise  provided  when
authorized or ratified, continue as to a person who has ceased to be a Director,
officer,  employee  or  agent,  and shall  inure to the  benefit  of the  heirs,
executors and administrators of such a person.

             (g) The Company may purchase  and  maintain  insurance on behalf of
any  person  who  is or  was a  Director,  officer,  employee  or  agent  of the
Corporation,  or is or was  serving  at the  request  of  the  Corporation  as a
Director, officer, employee or agent of another corporation,  partnership, joint
venture,  trust or other enterprise  against any liability  asserted against him
and incurred by him in any such capacity,  or arising out of his status as such,
whether or not the  Corporation  would have the power to  indemnify  him against
such liability under the provisions of this section.

             (h) The  provisions  of this Article 20 shall be separable  and the
invalidity  of all or any part  thereof  as applied  to any  particular  type of
liability  or any  particular  person  shall  not  preclude  application  of any
remaining  portion thereof to such situation or such person,  nor application of
the provisions of this Article to any other situation or person.

                            COMPENSATION TO DIRECTORS

          21. By resolution of the Board of Directors,  any Director may be paid
any one or more of the  following:  his  expenses,  if  any,  of  attendance  at
meetings,  a fixed  sum for  attendance  at  meetings;  or a  stated  salary  as
Director.  Nothing herein  contained shall be construed to preclude any Director
from serving the Corporation in any capacity as an officer,  employee,  agent or
otherwise, and receiving compensation therefor.

                              CONFLICTS OF INTEREST

          22.  No  Director  may  pursue  for  his own  account  a  business  or
investment  opportunity if he has obtained knowledge of such opportunity through
his  affiliation  with  the  Corporation,   provided  that  the  Corporation  is
interested in pursuing such  opportunity  and provided that the  Corporation  is
financially or otherwise able to pursue such opportunity. No officer or employee
of the  Corporation  may pursue for his own  account an oil and gas  opportunity
unless (a) with respect to a non-officer  of the  Corporation,  such  employee's
pursuit  of such  opportunity  has  been  approved  by a senior  officer  of the
Corporation  with full knowledge of such  opportunity and (b) with respect to an
officer of the Corporation,  such officer's pursuit of such opportunity has been
approved by the Board of Directors.  The foregoing  restrictions shall not apply
to the acquisition of less than one percent of the publicly traded securities of
another  company,  provided that the  Corporation is not at such time engaged in
any present or pending transaction with such other company.

EX-10

                                                                    EXHIBIT 10.1

                                     FORM OF
                 CHANGE OF CONTROL EXECUTIVE SEVERANCE AGREEMENT


          This Change of Control Executive Severance Agreement is entered into
this 2nd day of July, 2001 by and between St. Mary Land & Exploration
Company, a Delaware corporation (the "Company"), and [the Executive listed on
Attachment A] (the "Executive").

                                    RECITALS

          A. The Board of Directors of the Company (the "Board") has determined
that it is in the best interests of the Company to ensure that the Company will
have the continued dedication of the Executive notwithstanding the possibility
of a Change of Control (as defined in Section 1) of the Company and to provide
the Executive with customary compensation and benefits arrangements upon a
Change of Control which ensure that the compensation and benefits expectations
of the Executive will be satisfied and which are competitive with those of other
companies, and therefore the Board has previously adopted a Change of Control
Executive Severance Policy applicable to the Executive.

          B. This Agreement reflects the terms and conditions of the Change of
Control Executive Severance Policy.

          C. The Company desires to continue the employment of the Executive and
the Executive desires to continue his employment with the Company, all upon and
subject to the terms and conditions set forth in this Agreement.

          NOW, THEREFORE, in consideration of the Executive's continued
employment with the Company and the mutual agreements set forth herein, the
parties agree as follows:

                                    AGREEMENT

Section 1. Certain Definitions. The following terms shall for purposes of this
- ------------------------------
Agreement have the following respective definitions:

          (a) "Accrued Compensation" shall mean all compensation amounts earned
or accrued by the Executive through the Termination Date (as defined below) but
not paid to the Executive as of the Termination Date, including (i) Base Salary
(as defined below), (ii) any compensation previously deferred by the Executive
(together with any accrued interest or earnings thereon), (iii) vacation and
sick leave pay (to the extent provided by Company policy, plan, program or
practice or applicable law), (iv) bonuses and incentive compensation, and (v)
reimbursement for reasonable and necessary business expenses incurred by the
Executive on behalf of the Company during the period ending on the Termination
Date.

          (b) "Base Salary" shall mean the greater of (i) the Executive's annual
base salary at the rate in effect on the Termination Date or (ii) the
Executive's annual base salary at the rate in effect immediately prior to a
Change of Control, and shall include all amounts of his base salary that are
deferred under the qualified and nonqualified employee benefits plans, policies,
programs or practices of the Company or any other compensation agreement or
arrangement.

          (c) "Cause" shall mean for purposes of termination of employment (i)
the conviction of the Executive of a felony involving moral turpitude or (ii) a
resolution adopted in good faith by two-thirds of the members of the Board that
the Executive (A) intentionally and continually failed to substantially perform
his reasonably assigned duties with the Company (other than a failure resulting
from the Executive's incapacity due to physical or mental illness or from the
assignment to the Executive of duties that would constitute Good Reason (as
defined below)), which failure continued for a period of at least 30 days after
a written notice of demand for substantial performance has been delivered by the
Company to the Executive, which notice specifies the manner in which the
Executive failed to substantially perform, or (B) intentionally engaged in
conduct which is demonstrably and materially injurious to the Company; provided,
however, that no termination of the Executive's employment shall be for Cause
until written notice has been delivered to the Executive which sets forth the
conduct under this Section 1(c) of which the Executive is allegedly guilty and
specifying the particulars thereof in detail. Neither an act nor a failure to
act on the Executive's part shall be considered "intentional" unless the
Executive has acted or failed to act with a lack of good faith and with a lack
of reasonable belief that the Executive's action or failure to act was in the
best interests of the Company. Notwithstanding anything to the contrary
contained in this Agreement, no failure to perform by the Executive after a
Notice of Termination (as defined below) is given by the Executive to the
Company shall constitute Cause for purposes of this Agreement.

          (d) "Change of Control" shall mean any of the following events:

                    (i) The acquisition by any individual, entity or group
          (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities
          Exchange Act of 1934, as amended (the "Exchange Act")) (a "Person") of
          beneficial ownership (within the meaning of Rule 13d-3 promulgated
          under the Exchange Act) of more than 50% of either (A) the then
          outstanding shares of common stock of the Company (the "Outstanding
          Company Common Stock"), or (B) the combined voting power of the then
          outstanding voting securities of the Company entitled to vote
          generally in the election of directors (the "Outstanding Company
          Voting Securities"); provided, however, that the following
          acquisitions shall not constitute a Change of Control: (1) any
          acquisition by the Company, (2) any acquisition by any employee
          benefit plan (or related trust) sponsored or maintained by the Company
          or any corporation controlled by the Company or (3) any acquisition
          pursuant to a reorganization, merger, consolidation or similar
          transaction, if, following such transaction, the conditions described
          in clauses (A), (B) and (C) of subsection (d)(iii) of this Section 1
          are satisfied; or

                    (ii) Individuals who, as of the date this Agreement is
          executed, constitute the Board (the "Incumbent Board") cease for any
          reason to constitute at least a majority of the members of the Board;
          provided, however, that any individual becoming a director subsequent
          to the date hereof whose election, or nomination for election by the
          Company's stockholders, was approved by a vote of at least a majority
          of the directors then comprising the Incumbent Board shall be
          considered as though such individual were a member of the Incumbent
          Board, but excluding for this purpose any such individual whose
          initial assumption of office occurs as a result of either an actual or
          threatened proxy or election contest or other actual or threatened
          solicitation of proxies or consents by or on behalf of a Person other
          than the Board; or

                    (iii) A reorganization, merger, consolidation or similar
          transaction with respect to the Company, unless following such
          transaction all of the following conditions described in clauses (A),
          (B) and (C) below are met:

                              (A) 50% or more of, respectively, the then
                    outstanding shares of common stock of the corporation
                    resulting from such transaction and the combined voting
                    power of the then outstanding voting securities of such
                    corporation entitled to vote generally in the election of
                    directors is then beneficially owned, directly or
                    indirectly, by all or substantially all of the individuals
                    and entities who were the beneficial owners, respectively,
                    of the Outstanding Company Common Stock and Outstanding
                    Company Voting Securities immediately prior to such
                    transaction, in substantially the same proportions as their
                    ownership immediately prior to such transaction of the
                    Outstanding Company Common Stock and Outstanding Company
                    Voting Securities, as the case may be,

                              (B) no Person (excluding the Company, any employee
                    benefit plan (or related trust) of the Company or such
                    corporation resulting from such transaction and any Person
                    beneficially owning, immediately prior to such transaction,
                    directly or indirectly, 20% or more of the Outstanding
                    Company Common Stock or Outstanding Voting Securities, as
                    the case may be) beneficially owns, directly or indirectly,
                    20% or more of, respectively, the then outstanding shares of
                    common stock of the corporation resulting from such
                    transaction or the combined voting power of the then
                    outstanding voting securities of such corporation entitled
                    to vote generally in the election of directors, and

                              (C) at least a majority of the members of the
                    board of directors of the corporation resulting from such
                    transaction were members of the Incumbent Board at the time
                    of the execution of the initial agreement providing for such
                    transaction; or

                    (iv) The acquisition of more than 50% of the assets of the
          Company (on a consolidated basis), other than by a corporation with
          respect to which following such transaction meets the conditions
          described in clauses (A), (B) and (C) of subsection (d)(iii) of this
          Section 1.

          (e) "Change of Control Date" shall mean the first date during the term
of this agreement (as specified in Section 2) on which a Change of Control
occurs. Notwithstanding anything to the contrary contained in this Agreement, if
a Change of Control occurs and if the Executive's employment with the Company is
terminated prior to the date on which the Change of Control occurs, and if it is
reasonably demonstrated by the Executive that such termination of employment (i)
was at the request of a third party who has taken steps reasonably calculated to
effect the Change of Control or (ii) otherwise arose in connection with or
anticipation of the Change of Control, then for all purposes of this Agreement
the "Change of Control Date" shall mean the date immediately prior to the date
of such termination of employment.

          (f) "Change of Control Period" shall mean the period commencing on the
Change of Control Date and ending on the date two and one-half years after the
Change of Control Date.

          (g) "Code" shall mean the Internal Revenue Code of 1986, as amended.

          (h) "Disability" shall mean a physical or mental infirmity which
impairs the Executive's ability to substantially perform his employment duties
with the Company on a full-time basis for a period of 120 consecutive business
days, and the Executive has not returned to full-time performance of his
employment duties within 30 days after notice by the Company of its intention to
terminate employment of the Executive as a result thereof.

          (i) "Good Reason" shall mean the occurrence after a Change of Control
of any of the following events or conditions:

                    (i) a change in the Executive's status, authority, position,
          offices, titles, duties or responsibilities (including reporting
          responsibilities) with the Company which in the Executive's reasonable
          judgment represents a diminution or adverse change in, or are
          inconsistent with, such status, authority, position, offices, titles,
          duties or responsibilities in effect at any time within the 90 days
          preceding the Change of Control Date or at any time thereafter,
          excluding for this purpose (A) an isolated, unsubstantial and
          inadvertent action by the Company not taken in bad faith and which is
          remedied by the Company promptly after receipt of notice thereof given
          by the Executive and (B) any removal or failure to reappoint or
          reelect the Executive to any such position or offices in connection
          with the termination of his employment for death, Disability or Cause;

                    (ii) any reduction in the Executive's salary or any failure
          to pay the Executive any compensation or benefits to which he is
          entitled within ten business days after notice thereof;

                    (iii) the failure by the Company to provide the Executive
          with compensation and benefits, in the aggregate, at least equal (in
          terms of benefit levels and/or incentive or reward opportunities) to
          those provided for under each compensation and employee benefit
          policy, plan, program and practice in which the Executive was
          participating at any time within 90 days preceding the Change of
          Control Date or at any time thereafter;

                    (iv) the Company's requiring the Executive to be based at
          any place outside a 25-mile radius from his current location of
          employment, except for reasonably required travel for the Company's
          business which is not materially greater than such travel requirements
          prior to the Change of Control;

                    (v) any material breach by the Company of any provision of
          this Agreement;

                    (vi) any purported termination by the Company of the
          Executive's employment other than as expressly permitted by this
          Agreement;

                    (vii) the insolvency of the Company or the filing (by any
          party, including the Company) of a petition for bankruptcy of the
          Company, which petition is not dismissed within 60 days; or

                    (viii) the failure by the Company to obtain an agreement
          reasonably satisfactory to the Executive from any successor to the
          Company to assume and agree to perform this Agreement as contemplated
          by Section 7(b).

Any event or condition described in clauses (i) through (viii) above which
occurs prior to a Change of Control but which the Executive reasonably
demonstrates (A) resulted from the request of a third party who has taken steps
reasonably calculated to effect a Change of Control which actually occurs or (B)
otherwise arose in connection with or anticipation of a Change of Control which
actually occurs, shall constitute Good Reason for purposes of this Agreement
notwithstanding the fact that it occurred prior to the Change of Control. The
Executive's right to terminate his employment for Good Reason shall not be
affected by his incapacity due to a Disability.

          (j) "Notice of Termination" shall mean a written notice of termination
of the Executive's employment which (i) indicates the specific termination
provision in this Agreement relied upon for such termination, (ii) to the extent
applicable sets forth in reasonable detail the facts and circumstances claimed
to provide a basis for such termination under the provision so indicated and
(iii) if the Termination Date is other than the date of receipt of such notice,
specifies the Termination Date under such notice.

          (k) "Termination Date" shall mean (i) if the Executive's employment is
terminated by the Executive for Good Reason, the date of receipt of the Notice
of Termination or any later date of employment termination as specified therein,
(ii) if the Executive's employment is terminated by reason of death, the
Termination Date shall be the date of death and (iii) in all other cases, the
date of employment termination specified in the Notice of Termination; provided,
however, that if the Executive's employment is terminated by the Company for
Cause or due to a Disability, the date specified in the Notice of Termination
shall be at least 30 days from the date the Notice of Termination is given to
the Executive, provided that in the case of Disability the Executive shall not
have returned to the full-time performance of his duties during such 30-day
period.

Section 2. Term of Agreement. This Agreement shall commence as of the date
- ----------------------------
hereof and shall continue in effect until December 31, 2001; provided, however,
that on December 31, 2001 and on each annual anniversary of such date (such date
and each annual anniversary thereof shall be hereinafter referred to as the
"Renewal Date"), the term of the Agreement shall be automatically extended so as
to terminate one year from such Renewal Date, unless at least 60 days prior to
the Renewal Date the Company has given written notice to the Executive that the
term of the Agreement shall not be so extended, and provided further that
notwithstanding any such notice by the Company not to extend, the term of the
Agreement shall not expire after the occurrence of a Change of Control until the
expiration of the Change of Control Period, as long as the term of the Agreement
had not expired prior to the occurrence of the Change of Control.

Section 3. Payments and Benefits Upon Termination of Employment During Change of
- --------------------------------------------------------------------------------
Control Period. If during the term of this Agreement the Executive shall cease
- --------------
to be employed by the Company within a Change of Control Period, the Executive
shall be entitled to the following compensation payments and benefits:

          (a) Termination Other than for Cause or Disability or Termination for
              ------------------------------------------------------------------
Good Reason. If the Executive's employment with the Company shall be terminated
- -----------
before the Executive's death and Normal Retirement Age (as that term is defined
as of the date hereof in the Company's 401(k) Plan) either (i) by the Company
other than for Cause or Disability or (ii) by the Executive for Good Reason, the
Executive shall be entitled to the following:

                    (i) the Company shall pay the Executive all Accrued
          Compensation;

                    (ii) as severance pay, the Company shall continue to make
          payments to the Executive at the Base Salary rate for the remainder of
          the Change of Control Period after the Termination Date, in such Base
          Salary installment amounts and pursuant to such Base Salary
          installment payment schedule as was in effect immediately prior to the
          Change of Control; provided, however, that in no event shall such
          continued payments be made for less than one full year after the
          Termination Date; and

                    (iii) for one full year after the Termination Date (the
          "Continuation Period"), the Company shall at its expense continue on
          behalf of the Executive and his dependents and beneficiaries all
          insurance and other fringe benefits provided to the Executive at any
          time during the 30-day period prior to the Change of Control. The
          insurance coverages and other fringe benefits (including deductibles
          and costs) provided in this Section 3(a)(iii) during the Continuation
          Period shall be no less favorable to the Executive and his dependents
          and beneficiaries than the most favorable of such insurance coverages
          and benefits during the 30-day period prior to the Change of Control.
          The Company's obligation hereunder with respect to the foregoing
          benefits shall be limited to the extent that the Executive obtains any
          such benefits pursuant to a subsequent employer's benefit plans, in
          which case the Company may reduce the coverage of any benefits it is
          required to provide the Executive hereunder as long as the aggregate
          coverages and benefits of the combined benefit plans is no less
          favorable to the Executive than the coverages and benefits required to
          be provided hereunder. This Section 3(a)(iii) shall not be interpreted
          so as to limit any benefits to which the Executive, his dependents or
          beneficiaries may be entitled following the Executive's termination of
          employment under any of the Company's employee benefit policies,
          plans, programs or practices, including without limitation retiree
          medical and life insurance benefits.

Notwithstanding any other provision in this Agreement to the contrary, in the
event that subsequent to a termination of the Executive's employment under this
Section 3(a) and within the Change of Control Period or Continuation Period the
Executive suffers a physical or mental infirmity which otherwise may have at
such subsequent time qualified as grounds for termination of the Executive's
employment due to a Disability had the Executive been employed by the Company at
such subsequent time, the severance payments under Section 3(a)(ii) and the
insurance coverages and other fringe benefits under Section 3(a)(iii) shall
nevertheless continue as set forth in Section 3(a)(ii) and Section 3(a)(iii).

          (b) Termination for Cause, Disability or Death or Other than for Good
              ------------------------------------------------------------------
Reason. If the Executive's employment with the Company shall be terminated
- ------
either (i) by the Company for Cause or Disability, (ii) by reason of the
Executive's death, (iii) after the Executive has reached his Normal Retirement
Age or (iv) by the Executive other than for Good Reason, the Company shall pay
to the Executive all Accrued Compensation.

          (c) Other Compensation and Benefits. The Executive's entitlement to
              -------------------------------
any other compensation or benefits from or any indemnification by the Company
shall be determined in accordance with the Company's employee benefit and other
applicable compensation plans, programs, policies and practices, and any
applicable indemnification provisions or agreements then in effect. Nothing in
this Agreement shall prevent or limit the Executive's continuing or future
participation in any plan, program, policy or practice provided by the Company
or any of its affiliated companies and for which the Executive may qualify, nor
shall anything herein limit or otherwise affect such rights as the Executive may
have under any contract or agreement with the Company or any of its affiliated
companies. Amounts which are vested benefits or which the Executive is otherwise
entitled to receive under any plan, policy, practice or program of or any
contract or agreement with the Company or any of its affiliated companies at or
subsequent to the Termination Date shall be payable in accordance with such
plan, policy, practice or program or contract or agreement except as explicitly
modified by this Agreement. If the Executive is entitled to severance pay and
benefits pursuant to Section 3(a)(ii) and (iii), such severance pay and benefits
shall be reduced to the extent of any other severance or termination pay
explicitly designated as such to which the Executive may be entitled under any
agreement with the Company or any of its affiliated companies.

Section 4. Notice of Termination. Following a Change of Control, any purported
           ---------------------
termination of the Executive's employment by the Company, for Cause or
otherwise, or by the Executive for Good Reason, shall be communicated by a
Notice of Termination to the other party hereto given in accordance with Section
8(d). For purposes of this Agreement, no such purported termination shall be
effective without such Notice of Termination. The failure by the Executive or
the Company to set forth in the Notice of Termination any fact or circumstance
which contributes to a showing of Good Reason or Cause shall not waive any right
of the Executive or the Company hereunder or preclude the Executive or the
Company from asserting such fact or circumstance in enforcing the Executive's or
the Company's rights hereunder. If the Company determines in good faith that a
Disability of the Executive has occurred while the Executive is employed by the
Company during the Change of Control Period, it may give to the Executive
written notice in accordance with Section 8(d) of its intention to terminate the
Executive's employment. In such event, the Executive's employment with the
Company shall terminate effective on the 30th day after receipt of such notice
by the Executive, provided that within the 30 days after such receipt the
Executive shall not have returned to full-time performance of the Executive's
duties.

Section 5. No Set-Off or Mitigation; Resolution of Disputes.
- ------------------------------------------------------------------

          (a) No Set-Off. The Company's obligation to make the payments provided
              ----------
for in this Agreement and otherwise to perform its obligations hereunder shall
not be affected by any set-off, counterclaim, recoupment, defense or other
claim, right or action which the Company may have against the Executive or
others.

          (b) No Mitigation Required. In no event shall the Executive be
              ----------------------
obligated to seek other employment or take any other action by way of mitigation
of the amounts payable to the Executive under any of the provisions of this
Agreement and, except as provided in Section 3(a)(iii), such amounts shall not
be reduced whether or not the Executive obtains other employment.

          (c) Payments Pending Resolution of Disputes. If there shall be any
              ---------------------------------------
dispute between the Company and the Executive under this Agreement (i) in the
event of any termination of the Executive's employment by the Company, whether
such termination was validly for Cause, or (ii) in the event of any termination
of employment by the Executive, whether Good Reason existed, then, unless and
until there is a final, nonappealable judgment by a court of competent
jurisdiction declaring that such termination was for Cause or that the
determination by the Executive of the existence of Good Reason was not made in
good faith, the Company shall pay all amounts and provide all benefits to the
Executive and/or the Executive's dependents or other beneficiaries, as the case
may be, that the Company would be required to pay or provide pursuant to Section
3(a) as though such termination were by the Company other than for Cause, or by
the Executive for Good Reason; provided, however, that the Company shall not be
required to pay any disputed amount pursuant to this Section 5(c) except upon
receipt of an undertaking by or on behalf of the Executive to repay all such
amounts to which the Executive is ultimately adjudged by such court not to be
entitled.

          (d) Attorney Fees and Expenses. The Company shall pay as they become
              --------------------------
due all attorney fees and related expenses (including the costs of experts,
evidence and counsel) reasonably incurred by the Executive as a result of the
Executive seeking to obtain or enforce any right or benefit provided by this
Agreement.

Section 6. Excise Tax Limitation.
- --------------------------------

          (a) Notwithstanding anything to the contrary contained in this
Agreement, if the payments and benefits provided under this Agreement and
benefits provided to, or for the benefit of, the Executive under any other
Company plan or agreement (such payments or benefits are collectively referred
to as the "Payments") would be subject to the excise tax (the "Excise Tax")
imposed under Section 4999 of the Code, the Payments shall be reduced to the
Limited Payment Amount of the greater of (i) the largest amount of Payments that
would result in no portion of the Payments being subject to the Excise Tax, or
(ii) the largest amount of Payments, up to and including the total Payments,
after taking into account all applicable federal, state and local employment
taxes, income taxes, and the Excise Tax (all computed at the highest applicable
marginal rate), that results in the Executive's receipt, on an after-tax basis,
of the greater amount of Payments notwithstanding that all or some portion of
the Payments may be subject to the Excise Tax. The intent of the foregoing
provision is to reduce the Payments only in the event and to the extent that
doing so will maximize the net present value of the Payments, on an after-tax
basis, to be received by the Executive. Unless the Executive shall have given
prior written notice specifying a different order to the Company to effectuate
any reduction in Payments, the Company shall reduce or eliminate the Payments by
first reducing or eliminating the portion of the Payments which are not payable
in cash and then by reducing or eliminating cash payments, in each case in
reverse order beginning with payments or benefits which are to be paid the
farthest in time from the Determination (as defined below). Any notice given by
the Executive pursuant to the preceding sentence shall take precedence over the
provisions of any other plan, arrangement or agreement governing the Executive's
rights and entitlements to any benefits or compensation.

          (b) The determination of whether the Payments shall be reduced to the
Limited Payment Amount pursuant to this Agreement and the amount of such Limited
Payment Amount shall be made, at the Company's expense, by an accounting firm
selected by the Executive which is one of the five largest accounting firms in
the United States (the "Accounting Firm"). The Accounting Firm shall provide its
determination (the "Determination"), together with detailed supporting
calculations and documentation, to the Company and the Executive within ten
business days of the Termination Date, if applicable, or such other time as
requested by the Company or by the Executive (provided that the Executive
reasonably believes that any of the Payments may be subject to the Excise Tax),
and if the Accounting Firm determines that no Excise Tax is payable by the
Executive with respect to the Payments it shall furnish the Executive with an
opinion reasonably acceptable to the Executive that no Excise Tax will be
imposed with respect to any such Payments. The Determination shall be binding,
final and conclusive upon the Company and the Executive.

Section 7. Successors and Assigns.
- ---------------------------------

          (a) This Agreement is personal to the Executive and without the prior
written consent of the Company shall not be assignable by the Executive
otherwise than by will or the laws of descent and distribution. This Agreement
shall inure to the benefit of and be enforceable by the Executive's legal
representatives.

          (b) This Agreement shall inure to the benefit of and be binding upon
the Company and its successors and assigns. The Company shall require any
successor (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to the business and/or 50% or more of the assets of the Company (on a
consolidated basis) to expressly assume and agree to perform this Agreement in
the same manner and to the same extent that the Company would be required to
perform it if no such succession had taken place. As used in this Agreement, the
term "Company" shall mean the Company as previously defined and any successor to
its business and/or assets which assumes and agrees to perform this Agreement by
operation of law or otherwise.

Section 8. Miscellaneous.
- ------------------------

          (a) Governing Law and Venue. This Agreement shall be governed by and
              -----------------------
construed in accordance with the laws of the State of Colorado, without
reference to principles of conflict of laws. Any action brought by any party to
this Agreement shall be brought and maintained in a court of competent
jurisdiction located in Denver, Colorado.

          (b) Captions. The captions of this Agreement are for convenience of
              --------
reference only, are not part of the provisions hereof and shall have no force or
effect in the interpretation of this Agreement.

          (c) Amendment. This Agreement may not be amended or modified otherwise
              ---------
than by a written agreement executed by the parties hereto or their respective
successors and legal representatives.

          (d) Notice. All notices and other communications hereunder shall be in
              ------
writing and shall be given by hand delivery to the other party, by confirmed
telefax, or by registered or certified mail, return receipt requested, postage
prepaid, addressed as follows:

              If to the Executive:      ------------------------------
                                        ------------------------------
                                        ------------------------------
                                        ------------------------------
                                        Telefax: ---------------------

              If to the Company:        St. Mary Land & Exploration Company
                                        1776 Lincoln Street, Suite 1100
                                        Denver, CO  80203
                                        Attn: President
                                        Telefax: (303) 861-0934

or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.

          (e) Severability. The invalidity or unenforceability of any provision
              ------------
of this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, and any provision that is determined to be invalid
or unenforceable shall be enforced to the maximum extent permissible under law.

          (f) Entire Agreement. This Agreement constitutes the entire agreement
              ----------------
between the parties concerning the subject matter hereof.

          (g) Tax Withholding. The Company may withhold from any amounts payable
              ---------------
under this Agreement such federal, state or local taxes as shall be required to
be withheld pursuant to any applicable law or regulation.

          (h) Waiver. The Executive's or the Company's failure to insist upon

strict compliance with any provision hereof or the failure to assert any right
the Executive or the Company may have hereunder, including, without limitation,
the right of the Executive to terminate employment for Good Reason, shall not be
deemed to be a waiver of such provision or right or any other provision or right
of this Agreement.

          (i) No Guaranteed Employment. The Executive and the Company
              ------------------------
acknowledge that, except as may otherwise be provided under any other written
agreement between the Executive and the Company concerning the Executive's
employment with the Company, the provisions of such other agreement not
inconsistent herewith which shall remain in full force and effect, the
employment of the Executive by the Company is "at will" and, prior to the Change
of Control Date, may be terminated by either the Executive or the Company at any
time.

          (j) Execution in Counterparts and by Facsimile. This Agreement may be
              ------------------------------------------
executed in counterparts and signature pages may be delivered by facsimile
transmission.



                                    * * * * *









          IN WITNESS WHEREOF, this Change of Control Executive Severance
Agreement is hereby duly executed by each party hereto as of the day and year
first above written.

COMPANY:

ST. MARY LAND & EXPLORATION COMPANY,
a Delaware corporation

By: ----------------------------------------
Printed name: ------------------------------
Title: -------------------------------------


EXECUTIVE:


- ------------------------------------------
Printed name: ----------------------------






                                  Attachment A
                                       to
                                     Form of
                 Change of Control Executive Severance Agreement


Executives with Change of Control Executive Severance Agreements:

         Mark A. Hellerstein
         Ronald D. Boone
         Richard C. Norris
         Milam Randolph Pharo
         Douglas W. York
         W. David Hart
         George M. Hearne IV
         Julian C. Pope
         Michael H. Rosenzweig
         Garry A. Wilkening
         Kevin E. Willson
         Robert L. Nance
         Robert T. Hanley
         Charles M. Jones