EXHIBIT 10.28
COMPLETION AND LIQUIDITY MAINTENANCE AGREEMENT
     THIS COMPLETION AGREEMENT AND LIQUIDITY MAINTENANCE AGREEMENT (“Agreement”)
is made and entered into effective as of June 29, 2006 between PRIMEENERGY
CORPORATION (“Prime”), GUARANTY BANK, FSB (“Guaranty”) and PRIME OFFSHORE L.L.C.
(“Offshore”).
     Prime is the majority shareholder of Prime Offshore L.L.C. (“Offshore”).
Offshore and Guaranty are parties to a Credit Agreement dated June 29, 2006, by
and between Offshore as Borrower and Guaranty, as Agent and Lender (“Credit
Agreement”) wherein Guaranty is loaning certain funds to Offshore to drill and
complete wells and construct, install and operate in-field and flow pipelines,
caissons, platforms and production facilities for wells in South Padre Island
Area OCS Blocks 1113, 1059, 1060, 1073 and 1133 and North Padre Island Area OCS
Block 998 (“Development Project”).
1. Completion Commitment
     Each of the South Padre Island Area OCS Blocks 1113, 1059, 1060, 1073 and
1133 and the North Padre Island Area OCS Block 998 shall be defined as a
“Project Field.”
     For purposes of this Agreement, Project Completion shall consist of two
components and be defined as:

  A)   each Project Field in the Development Project having all planned in-field
and flow pipelines, caissons, platforms and production facilities for all the
wells in such Project Field, for which Guaranty has loaned funds, installed and
operational such that the production from all such wells can be transported to a
readily available sales point for natural gas. In addition, for each Project
Field, Project Completion will include, but not limited to:

  a)   obtaining required permits, easements and governmental approvals;     b)
  executing necessary construction contract(s);     c)   completing tests
considered usual and customary and required to be conducted with results in
accordance with those necessary to permit operations;     d)   ensuring that
each Project Field is free and clear of all liens other than those in favor of
Guaranty and Permitted Liens under the Credit Agreement and;     e)   causing
all costs of the Development Project to be paid when due; and,

  B)   the 12-inch loop pipeline from North Padre Island Area OCS Block 996 to
the pipeline owned by the Williams Companies Inc. having been constructed and
installed in accordance with the plans and specifications in the construction
contract(s).

 

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     As consideration for Guaranty entering into the Credit Agreement to provide
such loans for the Development Project and to ensure Project Completion, Prime
absolutely and unconditionally warrants to Guaranty to fund the payment to
Offshore of all costs that exceed the available commitments under the Credit
Agreement, including interest, for Project Completion. In the event Offshore is
in Default under Section 7.1(f), (g), (h) and/or (i) of the Credit Agreement,
then Prime absolutely and unconditionally warrants to Guaranty the assumption of
all costs for Project Completion.
2. Liquidity Maintenance
     Prime will, during the term of the Credit Agreement, maintain liquidity
consisting of unused revolver availability under the Credit Agreement dated
December 2, 2002, as amended, with Prime et al and Guaranty, and/or unrestricted
cash and cash equivalents of $25,000,000. This required liquidity will reduce
dollar-for-dollar with any additional shareholder advances and increase
dollar-for-dollar to a maximum of $25,000,000 with any repayment of shareholder
advances. To the extent that shareholder repayment has occurred, Prime agrees to
fund additional shareholder loans equal to the amount repayed by the
shareholder, as needed to ensure Project Completion.
     This Agreement shall remain in force until each component of Project
Completion is satisfied. Once a component is satisfied, Prime’s absolute and
unconditional warranty to Guaranty to fund the payment to Offshore of all costs
that exceed the available commitments under the Credit Agreement for that
component, including interest, will expire.
     Prime understands that a breach of obligations under this Agreement would
result in an Event of Default under the Credit Agreement with Offshore that
would permit Guaranty to pursue its available remedies under the Credit
Agreement. Offshore is executing this Agreement to acknowledge that a breach of
this Agreement would result in an Event of Default under the Credit Agreement.
     This Agreement shall be deemed a contract made under and shall be construed
in accordance with and governed by the laws of the State of Texas and that
actions arising out of this Agreement may be litigated in courts having situs in
Harris County, Texas.
      This agreement is executed the date first hereinafter written,

            PRIMEENERGY CORPORATION
      By:   /s/ Beverly A. Cummings         Beverly A. Cummings        
Executive Vice President   

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            PRIME OFFSHORE L.L.C.
      By:   /s/ Jim R. Brock         Jim R. Brock         President and Chief
Financial Officer     

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GUARANTY BANK, FSB
      By:   /s/ Kelly L. Elmore, III         Kelly L. Elmore, III        Senior
Vice President     

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