9/30/99

EXHIBIT 10.7

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FORM OF EMPLOYMENT AGREEMENT

by and between

CARBON ENERGY CORPORATION

and

KEVIN D. STRUZESKI

Dated as of October 29, 1999

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TABLE OF CONTENTS

Page

Article I. Term of Employment............................................................... 1
1.1 Position and Employment Period ................................................... 1
1.2 Change in Control ................................................................ 1

Article II. Duties.......................................................................... 3
2.1 Duties............................................................................ 3

Article III. Compensation................................................................... 4
3.1 Salary............................................................................ 4
3.2 Benefits.......................................................................... 4
3.3 Reimbursement of Expenses......................................................... 4

Article IV. Death and Disability............................................................ 4
4.1 Death............................................................................. 4
4.2 Disability........................................................................ 5
4.3 Determination of Disability....................................................... 5
4.4 Termination....................................................................... 5

Article V. Termination Benefits............................................................. 6
5.1 Severance Payments................................................................ 6
5.2 Termination for Cause............................................................. 6

Article VI. Covenants of Executive.......................................................... 7
6.1 Confidential Information.......................................................... 7

Article VII. Miscellaneous.................................................................. 7
7.1 Disagreements..................................................................... 7
7.2 Binding Effect; Benefits.......................................................... 7
7.3 Notices........................................................................... 7
7.4 Entire Agreement.................................................................. 8
7.5 Amendments and Waivers............................................................ 8
7.6 Section Headings.................................................................. 8
7.7 Severability...................................................................... 8
7.8 Governing Law..................................................................... 8
7.9 Counterparts; Facsimile........................................................... 8

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (this "Agreement") is dated and effective as
of _________________, 1999 (the "Effective Date"), by and between CARBON ENERGY
CORPORATION, a Colorado corporation, with offices at 1700 Broadway, Suite 1150,
Denver, Colorado 80290-1101 ("Company"), and Kevin D. Struzeski, residing in
Colorado ("Executive").

RECITALS

WHEREAS, Company desires to acquire the services of Executive, and
Executive desires to be employed by Company upon the terms and conditions set
forth in this Agreement.
AGREEMENT

NOW THEREFORE, in consideration of these premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto do hereby agree as follows:

Article I.
Term of Employment

1.1 Position and Employment Period. Company hereby employs
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Executive as its Chief Financial Officer, and Executive hereby accepts
employment with Company, all in accordance with the terms and conditions hereof,
for an initial two-year term commencing on the Effective Date and ending two
years from that date, unless otherwise terminated as provided in Section 1.2 or
Articles IV and V. This Agreement shall continue from year to year thereafter
unless Company gives written notice of termination to Executive at least three
months preceding the date of termination or Executive gives such notice to
Company on or at least three months preceding the date of termination (the
initial two-year term is referred to as the "Initial Employment Period," and
together with any subsequent periods of employment pursuant hereto, the
"Employment Period").

1.2 Change in Control.
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(a) Hostile Change in Control.
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i. A Change in Control (as defined below) is hostile if it
is neither solicited by Company nor supported by a majority of Company's then
existing Board of Directors ("Hostile Change in Control"). Notwithstanding
anything herein to the contrary, in the event that a Hostile Change in Control
of Company occurs, Company shall have the right to terminate this Agreement by
paying Executive 300% of the Compensation (as defined below), which he would
have received if this Agreement had not been terminated.

ii. In the event that a Hostile Change in Control of
Company occurs, Executive shall have the right to terminate this Agreement by
written notice to Company and Company shall immediately pay Executive 300% of
the Compensation, which he would have received if this Agreement had not been
terminated.

(b) Friendly Change in Control.
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i. A Change in Control (as defined below) is friendly if a
majority of Company's then existing Board of Directors supports such Change in
Control ("Friendly Change in Control"). Notwithstanding anything herein to the
contrary, in the event that a Friendly Change in Control of Company occurs,
Company shall have the right to terminate this Agreement by paying Executive
200% of the Compensation (as defined below), which he would have received if
this Agreement had not been terminated.

ii. In the event that a Friendly Change in Control of
Company occurs, Executive shall have the right to terminate this Agreement by
written notice to Company and Company shall immediately pay Executive 100% of
the Compensation, which he would have received if this Agreement had not been
terminated.

(c) In addition, upon the occurrence of either a Hostile Change
in Control of Company or a Friendly Change in Control of Company, the
restrictions on any outstanding incentive awards (including restricted stock and
granted performance shares) granted to Executive under any incentive plan or
arrangement shall lapse and such incentive awards shall become 100% vested, and
all stock options and stock appreciation rights granted to Executive shall
become immediately exercisable and shall become 100% vested.

(d) Any amounts required to be paid by Company pursuant to this
Section 1.2 shall be paid within five days of Executive's date of termination
(the "Termination Date").

(e) As used in this Agreement, the term "Compensation" shall be
determined by averaging the total value of Executive's annual base salary and
incentive compensation for the two years prior to the Termination Date (pro
rated on a monthly basis) or, if Executive has been employed for less than two
full years, such lesser number of calendar years during any part of which
Executive has been so employed, with his base salary and incentive compensation
taken into account at their full annualized rates for any partial year or years
(pro rated on a monthly basis), and multiplying that amount by the remaining
months of the Initial Employment Period, which for purposes of this Article I
shall be deemed to be no less than 12 months, or if such Compensation is
determined in reference to a period of employment subsequent to the expiration
of the Initial Employment Period, it shall be the annualized amount of such
Compensation during such period as calculated above (pro rated on a monthly
basis), multiplied by 12. The annualized amount of the average base salary and
incentive compensation described

in this paragraph is to be pro rated to a monthly amount before multiplying by
the remaining months of the Initial Employment Period or by 12, as the case may
be.

(f) "Change in Control" shall be deemed to have occurred:

i. At such time as a third person, including a "group" as
defined in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended,
becomes the beneficial owner of shares of Company having 50% or more of the
total number of votes that may be cast for the election of Directors of Company;
or

ii. On the date on which the stockholders of Company
approve: (A) any agreement for a merger or consolidation of Company with another
entity, provided that there shall be no Change in Control if the persons and
entities who were the stockholders of Company immediately before such merger or
consolidation continue to own directly more than two-thirds of the outstanding
voting securities of the corporation resulting from such merger or consolidation
in substantially the same proportion as their ownership of the voting securities
of Company outstanding immediately before such merger or consolidation; or (B)
any sale, exchange or other disposition of all or substantially all of Company's
assets; or

iii. On the effective date of any sale, exchange or other
disposition of greater than 50% in fair market value of Company's assets, other
than in the ordinary course of business, whether in a single transaction or a
series of related transactions; or

iv. At such time that there is a change in more than a
majority of Company's Board of Directors as a result of a proxy contest waged by
a third person unaffiliated with Executive and not endorsed by Executive.

v. A person, for purposes of this section, means an
individual, corporation, partnership, joint venture, trust, unincorporated
association or any other form of organization.

In determining whether clause (i) of the preceding sentence has been satisfied,
the third person owning shares must be someone other than Yorktown Energy
Partners III, L.P., Yorktown Partners LLC, or entities controlled by Yorktown
Partners LLC. For this purpose, the term "controlled" means possession, direct
or indirect, of the power to direct or cause the direction of the management and
policies of a person, whether (1) through the ownership of more than 50% of the
outstanding voting securities of the person, (2) by contract or (3) by a
position such as a general partner or manager.

Article II.
Duties

2.1 Duties. During the term hereof, Executive shall, subject to the
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succeeding sentence, devote all of his available working time to perform his
duties and

shall discharge such duties to the best of his abilities. Executive may invest
his personal assets and his time in enterprises other than Company if such
enterprises do not compete with Company in Company's area of operations and do
not require Executive to devote substantial amounts of his time thereto.

Article III.
Compensation

3.1 Salary. Company shall pay Executive a base salary of not less
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than $100,000 per year to be paid at the usual times for the payment of
Company's executives, subject to adjustment as provided herein. Executive's base
salary shall be reviewed annually by the Board of Directors of Company.
Incentive compensation or bonuses (called in this Agreement incentive
compensation) will be determined by the Board of Directors at its discretion.

3.2 Benefits. Executive shall be entitled to receive all benefits
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(such as medical, dental, disability and life insurance, paid vacation (a
maximum of three weeks)) offered by the Company to its employees generally.
Executive shall be eligible to participate in all incentive compensation, stock
option, performance unit or similar plans or programs as the Board of Directors
of Company may determine in its reasonable discretion based upon Company's
compensation practices and Executive's responsibilities and performance.

3.3 Reimbursement of Expenses. In addition, Company shall promptly
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reimburse Executive for all reasonable and documented out-of-pocket expenses
incurred in the performance of his duties hereunder, including expenses for
entertainment and travel.

Article IV.
Death and Disability

4.1 Death. If Executive dies during the Employment Period, the
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Employment Period shall thereupon terminate for all purposes of this Agreement,
and Company's obligations hereunder shall terminate immediately, and Executive's
estate or legal representative shall be entitled only to the following:

(a) any arrearage of salary through the date of Executive's
death;

(b) any unpaid incentive compensation or compensatory options
earned by Executive in respect of any calendar year prior to the calendar year
in which occurs the death of Executive;

(c) any incentive compensation or compensatory options to be
granted earned by Executive in respect of the year in which occurs the death of
Executive; and

(d) any reimbursable expenses incurred through the date of
Executive's death.

4.2 Disability. If Executive is unable to perform his duties as
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required under this Agreement by reason of mental or physical illness or
incapacity, Company agrees to continue all payments due hereunder, including
salary, for a period of 180 days from the date of disability. Notwithstanding
anything to the contrary contained herein, Executive shall be considered
disabled and Company may terminate this Agreement at any time Executive shall be
absent from employment as a result of mental or physical illness or incapacity
for a continuous period of 180 days, and all obligations of Company hereunder
shall cease upon any such termination. Upon any such termination, Executive
shall be entitled only to the following:

(a) any arrearages of salary, through the date of such
termination, including that which is payable as a result of the first sentence
of this Section 4.2;

(b) any unpaid incentive compensation or any options earned by
Executive in respect of any calendar year prior to the calendar year in which
occurs the disability of Executive;

(c) any incentive compensation or options earned by Executive in
respect of the year in which occurs the disability of Executive; and

(d) any reimbursable expenses incurred by Executive.

4.3 Determination of Disability. For purposes of this Agreement, if
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at any time a question arises as to the disability of Executive, then Company
and Executive shall agree on one physician who is a member of the American
Medical Association to examine Executive and determine if his physical and/or
mental condition is such as to render him incapable of performing the usual
duties of his employment with Company.

4.4 Termination. In addition to the foregoing provisions, the
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Employment Period and Executive's employment with Company may be terminated by:

(a) Company for cause (as defined in Section 5.2), immediately
upon determination by the Board of Directors and providing Executive with
written notice of termination;

(b) Executive following a change in position with Company if the
new position is not a comparable position to that described in Section 1.1,
provided Executive does not voluntarily accept the change in position and
notifies Company of his non-acceptance thereof; or

Article V.
Termination Benefits

5.1 Severance Payments. Subject to the provisions of Section 1.2
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hereof, (i) if Executive's employment shall be terminated by the Board of
Directors of Company for any reason other than "for cause" or upon the death or
disability of Executive, or (ii) if Executive voluntarily terminates employment
in accordance with Section 4.5(b) following a change in position with Company if
the new position is not a comparable position to that described in Section 1.1,
then Company shall pay Executive a termination benefit as follows:

(a) Company shall pay Executive an amount equal to Executive's
Compensation (pro rated on a monthly basis) multiplied by the remaining months
of this Agreement, which for purposes of this Article V shall be deemed to be no
less than 12 months (the "Severance Payments"). The Severance Payments shall be
paid in 12 equal monthly installments payable on or before the first day of
each calendar month following the Termination Date and shall be paid regardless
of whether Executive is able to secure alternative employment. In the event
Executive should die before payment of all of the installments due hereunder,
the remaining installments shall be paid to Executive's designated beneficiary,
if any, and otherwise to Executive's estate.

(b) Company shall continue to provide for a period of six months
from the Termination Date, medical, dental, disability and life insurance
coverage to Executive at the same levels of coverage as in effect immediately
prior to such date.

(c) Immediately upon termination under the circumstances
described in this Section 5.1, all Executive's options shall become immediately
exercisable and shall become 100% vested, and all performance incentives granted
to Executive shall become 100% vested.

(d) Executive shall not be required to mitigate the amount of
any payment provided for in this Agreement by seeking other employment or
otherwise and no such payment shall be offset or reduced by the amount of any
compensation or benefits provided to Executive in any subsequent employment
except as provided herein.

(e) The severance pay and benefits provided in this Agreement
shall be in lieu of any other severance pay to which Executive may be entitled
under any Company severance plan, program or arrangement.

5.2 Termination for Cause. If Executive is terminated for cause,
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then he shall receive no further benefits hereunder. "Cause" shall mean a
termination on account of (1) repeated refusal to obey written directions of the
Board of Directors or a superior officer (so long as such directions do not
involve illegal or immoral acts); (2) repeated acts of substance abuse which are
materially injurious to Company or any of its

subsidiaries, (3) fraud or dishonesty that is materially injurious to Company or
any of its subsidiaries, (4) breach of any material obligation of nondisclosure
or confidentiality owed to Company or any of its subsidiaries, (5) commission of
a criminal offense involving money or other property of Company (excluding any
traffic violations or similar violations), or (6) commission of a criminal
offense that constitutes a felony in the jurisdiction in which the offense is
committed.

Article VI.
Covenants of Executive

6.1 Confidential Information. Executive covenants and agrees that
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he will not at any time during or after the termination of his employment,
whether under this Agreement, or otherwise, reveal, divulge or make known to any
person any confidential or proprietary information ("Confidential Information")
whatsoever made known to Executive by reason of his employment by Company. This
Section 6.1 shall not apply to information made known to Executive by reason of
his outside personal business interests or personal investments made in
accordance with this Agreement. In the event of a breach or threatened breach by
Executive of the provisions of this Section 6.1, Company shall be entitled, in
addition to any remedy hereunder or under any applicable law, to an injunction
restraining Executive from disclosing or using, in whole or in part, any
Confidential Information. The covenants contained in this Section 6.1 shall
survive the termination or expiration of this Agreement for a period of 24
months.

Article VII.
Miscellaneous

7.1 Disagreements. In the event that Company and Executive shall
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disagree as to their respective rights and obligations hereunder, then Company
shall pay reasonable counsel fees incurred by Executive in connection with such
disagreement, if Executive prevails in his position.

7.2 Binding Effect; Benefits. This Agreement shall inure to the
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benefit of, and shall be binding upon, the parties hereto and their respective
successors, assigns, heirs and legal representatives. Insofar as Executive is
concerned, this contract may not be assigned.

7.3 Notices. All notices and other communications which are
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required or permitted hereunder shall be in writing and shall be sufficient if
mailed by registered or certified mail, postage prepaid to the address specified
herein in the case of Company, Executive's residential address, or such other
address as any party hereto shall have specified by notice in writing to the
other party hereto. All such notices and communications shall be deemed to have
been received on the date of delivery thereof or the fifth (5th) business day
after the mailing thereof, whichever is the earlier.

7.4 Entire Agreement. This Agreement contains the entire agreement
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between the parties hereto and supersedes all prior agreements and
understandings, oral or written, between the parties hereto with respect to the
subject matter hereof.

7.5 Amendments and Waivers. This Agreement may not be modified or
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amended except by an instrument or instruments in writing signed by the party
against whom enforcement or any such modification or amendment is sought. Either
party hereto may, by an instrument in writing, waive compliance by the other
party with any term or provision of this Agreement on the part of such other
party hereto to be performed or complied with. The waiver by any party hereto of
a breach of any term or provision of this Agreement shall not be construed as a
waiver of any subsequent breach.

7.6 Section Headings. The section and other headings contained in
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this Agreement are for reference purposes only and shall not be deemed to be a
part of this Agreement or to control or affect the meaning or construction of
any provision of this Agreement.

7.7 Severability. If any term or provision of this Agreement is
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held or deemed to be invalid or unenforceable, in whole or in part, by a court
of competent jurisdiction, this Agreement shall be ineffective to the extent of
such invalidity or unenforceability without rendering invalid or unenforceable
the remaining terms and provisions of this Agreement.

7.8 Governing Law. This Agreement shall be governed by and
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construed and enforced in accordance with the laws of the State of Colorado
without regard to its principals regarding conflicts of law.

7.9 Counterparts; Facsimile. This Agreement may be executed in any
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number of counterparts, each of which shall be deemed an original, and all of
which together shall be deemed one and the same instrument. This Agreement may
be delivered by facsimile.

IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement on the day and year first above written.

COMPANY: CARBON ENERGY CORPORATION

By:________________________________
Its:___________________________

EXECUTIVE: ___________________________________
Kevin D. Struzeski