Exhibit 10.1

RESTRICTED STOCK AGREEMENT

        THIS RESTRICTED STOCK AGREEMENT (this “Agreement”) is made as of
December 31, 2004 , between STONE ENERGY CORPORATION, a Delaware corporation
(the “Company”), and David H. Welch (the “Employee”).

    1.        Award.   Pursuant to the STONE ENERGY CORPORATION 2004 AMENDED AND
RESTATED STOCK INCENTIVE PLAN (the “Plan”), as of the date of this Agreement,
27,610 shares (the “Restricted Shares”) of the Company’s common stock shall be
issued as hereinafter provided in the Employee’s name subject to certain
restrictions thereon. The Restricted Shares shall be issued upon acceptance
hereof by Employee and upon satisfaction of the conditions of this Agreement.
The Employee acknowledges receipt of a copy of the Plan and agrees that this
award of Restricted Shares shall be subject to all of the terms and provisions
of the Plan, including future amendments thereto, if any, pursuant to the terms
thereof.

    2.        Restricted Shares.   The Employee hereby accepts the Restricted
Shares when issued and agrees with respect thereto as follows:

          (a)        Forfeiture Restrictions.   The Restricted Shares may not be
sold, assigned, pledged, exchanged, hypothecated or otherwise transferred,
encumbered or disposed of to the extent then subject to the Forfeiture
Restrictions, and in the event of termination of the Employee’s employment with
the Company for any reason other than as provided in Section 2(b), the Employee
shall, for no consideration, forfeit to the Company all Restricted Shares then
subject to the Forfeiture Restrictions. The prohibition against transfer and the
obligation to forfeit and surrender Restricted Shares to the Company upon
termination of employment are herein referred to as the “Forfeiture
Restrictions.” The Forfeiture Restrictions shall be binding upon and enforceable
against any transferee of Restricted Shares.

          (b)        Lapse of Forfeiture Restrictions.   The Forfeiture
Restrictions shall lapse as to the Restricted Shares in accordance with the
following schedule provided that the Employee has been continuously employed by
the Company from the date of this Agreement through the lapse date:

  Vesting Schedule

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Percentage of Total Number
of Restricted Shares Granted
as to Which
Forfeiture Restrictions Lapse

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        Prior to April 1, 2005   0%   On April 1, 2005  20%   On April 1, 2006
 40%   On April 1, 2007  60%   On April 1, 2008  80%   On April 1, 2009 100%

  Notwithstanding the foregoing, if the Employee’s employment with the Company
is terminated by reason of his death or disability (within the meaning of
section 22(e)(3) of the Code), the Forfeiture Restrictions shall lapse as to all
of the Restricted Shares then subject to the Forfeiture Restrictions.

          (c)        Certificates.   A certificate evidencing the Restricted
Shares shall be issued by the Company in the Employee’s name, pursuant to which
the Employee shall have all of the rights of a shareholder of the Company with
respect to the Restricted Shares, including, without limitation, voting rights
and the right to receive dividends (provided, however, that dividends paid in
shares of the Company’s stock shall be subject to the Forfeiture Restrictions).
The Employee may not sell, transfer, pledge, exchange, hypothecate or otherwise
dispose of the stock until the Forfeiture Restrictions have expired (except with
regard to a “qualified domestic relations order”), and a breach of the terms of
this Agreement shall cause a forfeiture of the Restricted Shares. The
certificate shall contain an appropriate endorsement reflecting the Forfeiture
Restrictions. The certificate shall be delivered upon issuance to the Secretary
of the Company or to such other depository as may be designated by the Committee
as a depository for safekeeping until the forfeiture of such Restricted Shares
occurs or the Forfeiture Restrictions lapse pursuant to the terms of the Plan
and this award. On the date of this Agreement, the Employee shall, if required
by the Committee, deliver to the Company a stock power, endorsed in blank,
relating to the Restricted Shares. Upon the lapse of the Forfeiture Restrictions
without forfeiture, the Company shall cause a new certificate or certificates to
be issued without legend (except for any legend required pursuant to applicable
securities laws or any other agreement to which the Employee is a party) in the
name of the Employee in exchange for the certificate evidencing the Restricted
Shares.

          (d)        Corporate Acts.   The existence of the Restricted Shares
shall not affect in any way the right or power of the Board of Directors of the
Company or the shareholders of the Company to make or authorize any adjustment,
recapitalization, reorganization or other change in the Company’s capital
structure or its business, any merger or consolidation of the Company, any issue
of debt or equity securities, the dissolution or liquidation of the Company or
any sale, lease, exchange or other disposition of all or any part of its assets
or business or any other corporate act or proceeding. The prohibitions of
Section 2(a) hereof shall not apply to the transfer of Restricted Shares
pursuant to a plan of reorganization of the Company, but the stock, securities
or other property received in exchange therefor shall also become subject to the
Forfeiture Restrictions and provisions governing the lapsing of such Forfeiture
Restrictions applicable to the original Restricted Shares for all purposes of
this Agreement and the certificates representing such stock, securities or other
property shall be legended to show such restrictions.

    3.         Withholding of Tax and Tax Elections.   To the extent that the
receipt of the Restricted Shares or the lapse of any Forfeiture Restrictions
results in compensation income or wages to the Employee for federal, state, or
local income tax purposes, the Employee shall deliver to the Company at the time
of such receipt or lapse, as the case may be, such amount of money as the
Company may require to meet its obligation under applicable tax laws or
regulations. The Employee may elect with respect to this Agreement to surrender
or authorize the Company to withhold shares of stock of the Company (valued at
their Fair Market Value on the date of surrender or withholding of such shares)
to satisfy any tax required to be withheld by reason of compensation income
resulting under this Agreement. An election pursuant to the preceding sentence
shall be referred to herein as a “Stock Withholding Election.” All Stock
Withholding Elections shall be made by written notice to the Company at its
principal executive office addressed to the attention of the Secretary. The
Employee may revoke such election by delivering to the Secretary written notice
of such revocation prior to the date such election is implemented through actual
surrender or withholding of shares of stock of the Company. If the Employee
fails to pay the required amount to the Company or fails to make a Stock
Withholding Election, the Company is authorized to withhold from any cash
remuneration or stock remuneration, including withholding any Restricted Shares
distributable to the Employee under this Agreement, then or thereafter payable
to the Employee any tax required to be withheld by reason of compensation income
resulting under this Agreement or the disposition of Restricted Shares acquired
under this Agreement.

        If the Employee makes the election authorized by section 83(b) of the
Internal Revenue Code of 1986, as amended (the “Code”), the Employee shall
submit to the Company a copy of the statement filed by the Employee to make such
election.

    4.         Status of Stock.   The Employee agrees that the Restricted Shares
issued under this Agreement will not be sold or otherwise disposed of in any
manner which would constitute a violation of any applicable federal or state
securities laws. The Employee also agrees that (i) the certificates representing
the Restricted Shares may bear such legend or legends as the Committee deems
appropriate in order to reflect the Forfeiture Restrictions and to assure
compliance with applicable securities laws, (ii) the Company may refuse to
register the transfer of the Restricted Shares on the stock transfer records of
the Company if such proposed transfer would constitute a violation of the
Forfeiture Restrictions or, in the opinion of counsel satisfactory to the
Company, of any applicable securities law, and (iii) the Company may give
related instructions to its transfer agent, if any, to stop registration of the
transfer of the Restricted Shares.

    5.         Employment Relationship.   For purposes of this Agreement, the
Employee shall be considered to be in the employment of the Company as long as
the Employee remains an employee of either the Company, a parent or subsidiary
corporation (as defined in section 424 of the Code) of the Company. Nothing in
the adoption of the Plan, nor the award of the Restricted Shares thereunder
pursuant to this Agreement, shall confer upon the Employee the right to
continued employment by the Company or affect in any way the right of the
Company to terminate such employment at any time. Unless otherwise provided in a
written employment agreement or by applicable law, the Employee’s employment by
the Company shall be on an at-will basis, and the employment relationship may be
terminated at any time by either the Employee or the Company for any reason
whatsoever, with or without cause. Any question as to whether and when there has
been a termination of such employment, and the cause of such termination, shall
be determined by the Committee, and its determination shall be final.

    6.         Notices.    Any notices or other communications provided for in
this Agreement shall be sufficient if in writing. In the case of the Employee,
such notices or communications shall be effectively delivered if hand delivered
to the Employee at his principal place of employment or if sent by registered or
certified mail to the Employee at the last address the Employee has filed with
the Company. In the case of the Company, such notices or communications shall be
effectively delivered if sent by registered or certified mail to the Company at
its principal executive offices.

    7.         Amendment.    This Agreement may not be modified in any respect
by any verbal statement, representation or agreement made by the Employee or by
any employee, officer, or representative of the Company or by any written
agreement unless signed by the Employee and by an officer of the Company who is
expressly authorized by the Company to execute such document.

    8.         Binding Effect.   This Agreement shall be binding upon and inure
to the benefit of any successors to the Company and all persons lawfully
claiming under the Employee.

    9.         Controlling Law.   This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware, without regards
to conflicts of laws principles.

        IN WITNESS WHEREOF, the Company has caused this Agreement to be duly
executed by an officer thereunto duly authorized, and the Employee has executed
this Agreement, all as of the date first above written.

  STONE ENERGY CORPORATION

By:     /s/ James H. Stone

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           James H. Stone, Chairman of the Board

           /s/ David H. Welch

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           David H. Welch, Employee