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CREDIT AGREEMENT
 Dated as of June 1, 2006
 (but effective for all purposes as of August 22, 2005)
 Between
 PRIME OFFSHORE L.L.C.
 as Borrower
 and
 PRIMEENERGY CORPORATION
 as Lender
 $40,000,000




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TABLE OF CONTENTS
 PageARTICLE IDefinitions and Accounting MattersSection 1.01
    
    Terms Defined Above
    
    
    1Section 1.02
    
    Certain Defined Terms
    
    
    1Section 1.03
    
    Accounting Terms and Determinations
    
    
    5ARTICLE IIRevolving Credit Borrowing BaseSection 2.01
    
    Borrowing Base
    
    
    6Section 2.02
    
    Note
    
    
    6Section 2.03
    
    Borrowing Base Amount
    
    
    6Section 2.04
    
    Request for Loans
    
    
    6Section 2.05
    
    Funding of Loans
    
    
    6ARTICLE IIIPayments of Principal and InterestSection 3.01
    
    Repayment of Loans and Interest
    
    
    7Section 3.02
    
    Interest
    
    
    7Section 3.03
    
    Prepayments
    
    
    7Section 3.04
    
    Conversion
    
    
    7ARTICLE IVPayments; Computations; Etc.Section 4.01
    
    Payments
    
    
    8Section 4.02
    
    Taxes
    
    
    8ARTICLE VConditions PrecedentSection 5.01
    
    Execution of Documentation
    
    
    8Section 5.02
    
    Additional Conditions
    
    
    9ARTICLE VIRepresentations and WarrantiesSection 6.01
    
    Existence
    
    
    9Section 6.02
    
    Financial Condition
    
    
    10Section 6.03
    
    Litigation
    
    
    10Section 6.04
    
    No Breach
    
    
    10Section 6.05
    
    Authority
    
    
    10Section 6.06
    
    Approvals
    
    
    10Section 6.07
    
    Use of Loan Proceeds
    
    
    10
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PageSection 6.08
    
    No Material Misstatements
    
    
    11Section 6.09
    
    Subsidiaries
    
    
    11Section 6.10
    
    Defaults
    
    
    11Section 6.11
    
    Compliance with the Law
    
    
    11Section 6.12
    
    Security Agreement
    
    
    11Section 6.13
    
    Titles, etc
    
    
    11ARTICLE VIIAffirmative CovenantsSection 7.01
    
    Financial Statements
    
    
    11Section 7.02
    
    Litigation
    
    
    12Section 7.03
    
    Maintenance, Etc
    
    
    12Section 7.04
    
    Further Assurances
    
    
    12Section 7.05
    
    Performance of Obligations
    
    
    12Section 7.06
    
    Insurance
    
    
    13Section 7.07
    
    Taxes and Other Liens
    
    
    13Section 7.08
    
    Environmental Laws
    
    
    13Section 7.09
    
    Maintenance of Liens
    
    
    13Section 7.10
    
    Adequate Capitalization
    
    
    13ARTICLE VIIINegative CovenantsSection 8.01
    
    No Amendments of Organizational Documents
    
    
    14Section 8.02
    
    Use of Proceeds
    
    
    14Section 8.03
    
    Sale of Assets, Consolidation, Merger, Dissolution, Etc
    
    
    14Section 8.04
    
    Indebtedness
    
    
    14Section 8.05
    
    Liens
    
    
    14Section 8.06
    
    Negative Pledge Clauses
    
    
    14Section 8.07
    
    Investments, Loans and Advances
    
    
    14Section 8.08
    
    Dividends, Distributions and Redemptions
    
    
    14Section 8.09
    
    Nature of Business
    
    
    15Section 8.10
    
    Transactions with Affiliates
    
    
    15ARTICLE IXEvents of Default; RemediesSection 9.01
    
    Events of Default
    
    
    15Section 9.02
    
    Remedies
    
    
    16ARTICLE XMiscellaneousSection 10.01
    
    Waiver
    
    
    17Section 10.02
    
    Notices
    
    
    17Section 10.03
    
    Payment of Expenses, Indemnities, Etc
    
    
    17Section 10.04
    
    Amendments, Etc
    
    
    19Section 10.05
    
    Successors and Assigns
    
    
    19
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PageSection 10.06
    
    Assignments
    
    
    19Section 10.07
    
    Invalidity
    
    
    20Section 10.08
    
    Counterparts
    
    
    20Section 10.09
    
    References
    
    
    20Section 10.10
    
    Survival
    
    
    20Section 10.11
    
    Captions
    
    
    21Section 10.12
    
    No Oral Agreements
    
    
    21Section 10.13
    
    Governing Law
    
    
    21Section 10.14
    
    Interest
    
    
    21Exhibit A
    
    Form of NoteExhibit B
    
    Form of Borrowing Request
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CREDIT AGREEMENT
 THIS CREDIT AGREEMENT, Borrower Lender
 R E C I T A L S
    ARTICLE I
Definitions and Accounting Matters
 Terms Defined Above Borrower Lender
 Certain Defined Terms
 Affiliate controlled by under common control
with
 Agreement
 Borrowing Base Amount




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Borrowing Request
 Business Day
 Capital Stock
 Change of Control
 Code
 Closing Date
 Debt
 Default
 2




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Dollars $
 Effective Rate
 Environmental Laws OPA CERCLA RCRA
 ERISA
 Event of Default
 Excepted Liens
 Final Maturity Date
 GAAP
 Governmental Authority
 3




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Governmental Requirement
 Hedging Agreements
 Highest Lawful Rate
 Indebtedness
 Indemnified Parties
 Indemnity Matters
 Lien Lien
 Loans
 Loan Documents
 4




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Material Adverse Effect
 Note
 Organizational Documents
 Person
 Property
 Responsible Officer
 SEC
 Security Agreement
 Subsidiary
 Accounting Terms and Determinations
 5




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ARTICLE II
Revolving Credit Borrowing Base
 Borrowing Base
 Note
 Borrowing Base Amount
 Request for Loans
    Funding of Loans
 6




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ARTICLE III
Payments of Principal and Interest
 Repayment of Loans and Interest
 Interest
 Prepayments
     Conversion
  7




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ARTICLE IV
Payments; Computations; Etc.
 Payments
 Taxes
 ARTICLE V
Conditions Precedent
 Execution of Documentation
  8




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Additional Conditions
     ARTICLE VI
Representations and Warranties
  Existence Organizational Documents
 9




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Financial Condition
 Litigation
 No Breach
 Authority
 Approvals
 Use of Loan Proceeds
 10




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No Material Misstatements
 Subsidiaries
 Defaults
 Compliance with the Law
 Security Agreement
 Titles, etc
 ARTICLE VII
Affirmative Covenants
  Financial Statements
  11




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Litigation
 Maintenance, Etc
 Further Assurances
 Performance of Obligations
 12




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Insurance
 Taxes and Other Liens
 Environmental Laws
 Maintenance of Liens
 Adequate Capitalization
 ARTICLE VIII
Negative Covenants
  13




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No Amendments of Organizational Documents
 Use of Proceeds
 Sale of Assets, Consolidation, Merger, Dissolution, Etc
 Indebtedness
 Liens
 Negative Pledge Clauses
 Investments, Loans and Advances
 Dividends, Distributions and Redemptions
 14




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Nature of Business
 Transactions with Affiliates
 ARTICLE IX
Events of Default; Remedies
 Events of Default Event of Default
      15




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Remedies
   16




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ARTICLE X
Miscellaneous
 Waiver
 Notices
 Payment of Expenses, Indemnities, Etc
  TO
RELEASE, INDEMNIFY AND DEFEND THE LENDER AND ITS AFFILIATES, AND EACH OF
THEIR OFFICERS, DIRECTORS, EMPLOYEES, REPRESENTATIVES, AGENTS,
 17




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ATTORNEYS,
ACCOUNTANTS AND EXPERTS (INDEMNIFIED PARTIES) FROM AND AGAINST ALL CLAIMS,
ACTION SUITS AND OTHER LEGAL ACTIONS COMMENCED OR ASSERTED AGAINST ANY ONE OR MORE OF THE
INDEMNIFIED PARTIES (WHETHER OR NOT ANY OF THEM IS DESIGNATED A PARTY THERETO) AS A RESULT OF,
ARISING OUT OF OR IN ANY WAY RELATED TO (I) ANY ACTUAL OR PROPOSED USE BY THE BORROWER OF THE
PROCEEDS OF THE LOANS, (II) THE EXECUTION, DELIVERY AND PERFORMANCE OF THE LOAN DOCUMENTS, (III)
THE OPERATIONS OF THE BUSINESS OF THE BORROWER, (IV) THE FAILURE OF THE BORROWER TO COMPLY WITH
THE TERMS OF ANY LOAN DOCUMENT, OR WITH ANY GOVERNMENTAL REQUIREMENT, (V) ANY INACCURACY OF ANY
REPRESENTATION OR ANY BREACH OF ANY WARRANTY OF THE BORROWER SET FORTH IN ANY OF THE LOAN
DOCUMENTS, (VI) ANY ASSERTION THAT THE LENDER WAS NOT ENTITLED TO RECEIVE THE PROCEEDS RECEIVED
PURSUANT TO THE LOAN DOCUMENTS OR (VII) ANY OTHER ASPECT OF THE LOAN DOCUMENTS, INCLUDING, WITHOUT
LIMITATION, THE REASONABLE FEES AND DISBURSEMENTS OF COUNSEL AND ALL OTHER EXPENSES INCURRED IN
CONNECTION WITH INVESTIGATING, DEFENDING OR PREPARING TO DEFEND ANY SUCH ACTION, SUIT, PROCEEDING
(INCLUDING ANY INVESTIGATIONS, LITIGATION OR INQUIRIES) OR CLAIM;
AND
 (c) TO RELEASE, INDEMNIFY AND HOLD HARMLESS EACH INDEMNIFIED
PARTY FROM AND AGAINST ANY AND ALL LOSSES, CLAIMS, COST RECOVERY ACTIONS,
ADMINISTRATIVE ORDERS OR PROCEEDINGS, DAMAGES AND LIABILITIES TO WHICH ANY SUCH
PERSON MAY BECOME SUBJECT (I) UNDER ANY ENVIRONMENTAL LAW APPLICABLE TO THE
BORROWER OR ANY OF ITS PROPERTIES, INCLUDING WITHOUT LIMITATION, THE TREATMENT
OR DISPOSAL OF HAZARDOUS SUBSTANCES ON ANY OF ITS PROPERTIES, (II) AS A RESULT OF THE
BREACH OR NON-COMPLIANCE BY THE BORROWER WITH ANY ENVIRONMENTAL LAW
APPLICABLE TO THE BORROWER, (III) DUE TO PAST OWNERSHIP BY THE BORROWER OF ANY OF
ITS PROPERTIES OR PAST ACTIVITY ON ANY OF ITS PROPERTIES WHICH, THOUGH LAWFUL AND
FULLY PERMISSIBLE AT THE TIME, COULD RESULT IN PRESENT LIABILITY, (IV) THE PRESENCE,
USE, RELEASE, STORAGE, TREATMENT OR DISPOSAL OF HAZARDOUS SUBSTANCES ON OR AT
ANY OF THE PROPERTIES OWNED OR OPERATED BY THE BORROWER, OR (V) ANY OTHER
ENVIRONMENTAL, HEALTH OR SAFETY CONDITION IN CONNECTION WITH THE LOAN
DOCUMENTS.
   18




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THE FOREGOING INDEMNITIES SHALL EXTEND TO THE INDEMNIFIED
PARTIES NOTWITHSTANDING THE SOLE OR CONCURRENT NEGLIGENCE OF EVERY KIND OR
CHARACTER WHATSOEVER, WHETHER ACTIVE OR PASSIVE, WHETHER AN AFFIRMATIVE ACT OR AN OMISSION,
INCLUDING WITHOUT LIMITATION, ALL TYPES OF NEGLIGENT CONDUCT IDENTD7IED IN THE RESTATEMENT
(SECOND) OF TORTS OF ONE OR MORE OF THE INDEMNIFIED PARTIES OR BY REASON OF STRICT LIABILITY
IMPOSED WITHOUT FAULT ON ANY ONE OR MORE
OF THE INDEMNIFIED PARTIES. TO THE EXTENT THAT AN INDEMNIFIED PARTY IS FOUND TO
HAVE COMMITTED AN ACT OF GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, THIS CONTRACTUAL OBLIGATION
OF INDEMNIFICATION SHALL CONTINUE BUT SHALL ONLY EXTEND TO THE PORTION OF THE CLAIM THAT IS DEEMED
TO HAVE OCCURRED BY REASON OF EVENTS OTHER THAN THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THE
INDEMNIFIED PARTY.
   Amendments, Etc.
 Successors and Assigns
 Assignments
    19




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Invalidity
 Counterparts
 References
 Survival
 20




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Captions
 No Oral Agreements THE LOAN DOCUMENTS EMBODY THE ENTIRE
AGREEMENT AND UNDERSTANDING BETWEEN THE PARTIES AND SUPERSEDE ALL OTHER AGREEMENTS AND
UNDERSTANDINGS BETWEEN SUCH PARTIES RELATING TO THE SUBJECT MATTER HEREOF AND THEREOF. THE LOAN
DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
 Governing Law THIS AGREEMENT AND THE NOTE SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF TEXAS (EXCLUDING ANY
CONFLICT-OF-LAW OR CHOICE-OF-LAW RULES THAT MIGHT LEAD TO THE APPLICATION OF THE INTERNAL LAWS OF
ANY OTHER JURISDICTION).
 Interest
 21




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22




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BORROWER:
    
    PRIME OFFSHORE L.L.CBy:
Name:
    
    /s/ Jim R. Brock

Jim R. BrockTitle:
    
    President and Chief Financial Officer
 Address for Notices:9821 Katy Freeway, Suite 1050Houston, Texas 77024Facsimile No.: (713) 461-9231Telephone No.: (713) 461-7221Attention: Jim R. Brock
 LENDER:
    
    PRIMEENERGY CORPORATIONBy:
Name:
    
    /s/ Beverly A. Cummings

Beverly A. CummingsTitle:
    
    Executive Vice President
 Address for Notices:1 Landmark Square, 11th Floor 
Stamford,
Connecticut 06901Facsimile No.: (203) 358-5786

Telephone No.: (203) 358-5701

Attention: Charles E. Drimal, Jr.




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EXHIBIT A
 FORM OF CONVERTIBLE NOTE
 $40,000,000
    
    August 22, 2005
 Borrower Lender
  Credit
Agreement
  Conversion of Note
 New Equity quity Offering
  A-1




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A-2




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PRIME OFFSHORE L.L.C.By:Name:
    
    Jim R. BrockTitle:
    
    President and Chief Financial Officer
 A-3




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EXHIBIT
B
 FORM OF BORROWING REQUEST
 
 
 
  Date of LoanAmount of Loan
    
    $Location of the Borrowers account
      B-1




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Very truly yours,PRIME OFFSHORE, L.L.C.By:Name:Title:
 B-2