<PAGE> 1

                          CERTIFICATE OF INCORPORATION
                                      OF
                         PARALLEL PETROLEUM CORPORATION
                         ------------------------------


"FIRST: The name of the corporation is PARALLEL PETROLEUM CORPORATION.

SECOND: The address of its registered office in the State of Delaware is No.
100 West Tenth Street, in the City of Wilmington, County of New Castle.
The name of its registered agent at such address is The Corporation Trust
Company.

THIRD:  The nature of the business of the Corporation and the objects and
purposes and business thereof proposed to be transacted, promoted or carried
on are as follows:

     1. To transact any and all lawful business for which a corporation may
     be incorporated under the laws of the State of Delaware.

     2. To do everything necessary, proper, advisable or convenient for the
     accomplishment of the purposes hereinabove set forth and to do all
     things incidental thereto or connected therewith which are not prohibited
     by the laws of the State of Delaware, by other laws or by these Articles.

     It is the intention that the purposes, objects and powers specified by the
foregoing clauses shall not, by reference to or inference from the terms of any
other clause in this Certificate of Incorporation, but each purpose, object or
power stated in the foregoing clauses shall be regarded as an independent
purpose, object or power.

FOURTH: The total number of shares of all classes that the Corporation shall
have authority to issue is 140,000,000 of which 40,000,000 shall be Preferred
Shares, par value $.10 per share, and 100,000,000 shall be Common Shares, $.01
par value per share.

     The designations, preferences, limitations and relative rights of the
shares of class that the Corporation shall have authority to issue are as
follows:

     1.   Preferred Shares.
          ----------------
          The Corporation may divide and issue the Preferred Shares in series.
Preferred Shares of each series when issued shall be designated to distinguish
them from the shares of all other series.  The Board of Directors is hereby
expressly vested with authority to divide the class of Preferred Shares into
series and to fix and determine the relative rights and preferences of the
shares of any such series so established to the full extent permitted by this
Certificate of Incorporation and the laws of the State of Delaware in respect
of the following:

<PAGE> 2

        (a)    The number of shares to constitute such series, and the
     distinctive designations thereof;

        (b)    The rate and preference of dividends, if any, the time of
     payment of dividends, whether dividends are cumulative and the date
     from which any dividend shall accrue;

        (c)    Whether shares may be redeemed and, if so, the
     redemption price and the terms and conditions of redemption;

        (d)    The amount payable upon shares in event of involuntary
     liquidation;

        (e)    The amount payable upon shares in event of voluntary
     liquidation;

        (f)    Sinking fund or other provisions, if any, for the redemption
     or purchase of shares;

        (g)    The terms and conditions on which shares may be
     converted, if the shares of any series are issued with the privilege of
     conversion;

        (h)    Voting rights, if any; and

        (i)    any other relative rights and preferences of shares of such
     series, including, without limitation, any restriction on any increase in
     the number of shares of any series theretofor authorized and nay
     limitation or restriction of rights or powers to which shares of any future
     series shall be subject.

     2. Common Shares.
        -------------
        (a)    The rights of holders of Common Shares to receive dividends or
     to share in the distribution of assets in the event of liquidation,
     dissolution or winding up of the affairs of the Corporation shall be
     subject to the preferences, limitations and relative rights of the
     Preferred Shares fixed in the resolution or resolutions which may be
     adopted from time to time by the Board of Directors of the Corporation
     providing for the issuance of one or more series of the Preferred Shares.


<PAGE> 3

        (b)    The holders of the Common Shares shall be entitled to vote for
     each Common Share held by them of record at the time for determining the
     holders thereof entitled to vote.

FIFTH:  The names and mailing addresses of the incorporators are:


                         Name                   Address
                         ----                   -------

                   Frank S. Delay         500 Metro Building
                                          119 North Colorado
                                          Midland, Texas
                                          79701




                   Larry C. Oldham        500 Metro Building
                                          119 North Colorado
                                          Midland, Texas
                                          79701



SIXTH:  The names and mailing addresses of the persons who are to serve as the
directors (until their successors are duly elected and qualified) are:


                         Name                   Address
                         ----                   -------
                   Frank S. Delay         500 Metro Building
                                          119 North Colorado
                                          Midland, Texas
                                          79701

                   E. R. Duke             500 Metro Building
                                          119 North Colorado
                                          Midland, Texas
                                          79701

                   Larry C. Oldham        500 Metro Building
                                          119 North Colorado
                                          Midland, Texas
                                          79701

                   Charles R. Pannil      500 Metro Building
                                          119 North Colorado
                                          Midland, Texas
                                          79701

<PAGE> 4

                         Name                   Address
                         ----                   -------

                   Glenn A. Smith         500 Metro Building
                                          119 North Colorado
                                          Midland, Texas
                                          79701


SEVENTH:  The corporation is to have perpetual existence.

EIGHTH:  The Board of Directors shall have power to enact, alter, amend and
repeal such By-Laws not inconsistent with the laws of the State of Delaware and
this Certificate of Incorporation as it may deem best for the management of the
Corporation.

NINTH:  Cumulative voting shall not be allowed in the election of directors.

TENTH:  Shareholders shall not have a preemptive right to subscribe for,
purchase or acquire additional unissued or treasury shares of the Corporation
or securities convertible into shares or carrying share purchase warrants or
privileges as the same may be issued from time to time by the corporation.

ELEVENTH:      Elections of directors need not be by written ballot unless the
by-laws of the corporation shall so provide.

     Meetings of stockholders may be held within or without the State of
Delaware, as the by-laws may provide.  The books of the corporation may be kept
(subject to any provision contained in the statutes) outside the State of
D/elaware at such place or places as may be designated from time to time by the
board of directors or in the by-laws of the corporation.

TWELFTH:     Any action required by statute to be taken at any annual or special
meeting of stockholders, or any action which may be taken at any annual or
special 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 all of the outstanding stock of the
Corporation.

THIRTEENTH:    The corporation reserves the right to amend, alter, change or
repeal any provision contained in this Certificate of Incorporation, in the
manner now or hereafter prescribed by statue, and all rights conferred upon
stockholders herein are granted subject to this reservation.


<PAGE> 5

      WE, THE UNDERSIGNED, being each of the incorporators hereinbefore named,
for the purpose of forming a corporation pursuant to the General Corporation Law
of the State of Delaware, do make this certificate, hereby declaring and
certifying that this is our act and deed and the facts herein stated are true,
and accordingly heave hereunto set our hands this 6th day of June, 1984.


                                     /s/ Frank S. Delay
                                     ------------------------------
                                        FRANK S. DELAY


                                     /s/ Larry C. Oldham
                                     ------------------------------
                                        LARRY C. OLDHAM

<PAGE> 6

                      CERTIFICATE OF CHANGE OF ADDRESS OF
                                
                   REGISTERED OFFICE AND OF REGISTERED AGENT
                                
            PURSUANT TO SECTION 134 OF TITLE 8 OF THE DELAWARE CODE
                                
                                
                                
To:  DEPARTMENT OF STATE
     Division of Corporations
     Townsend Building
     Federal Street
     Dover, Delaware 19903

     Pursuant to the provisions of Section 134 of Title 8 of the Delaware Code,

the undersigned Agent for service of precess, in order to change the address of

the registered office of the corporations for which it is registered agent,

hereby certifies that:
     

     1.   The name of the agent is:     The Corporation Trust Company

     2.   The address of the old registered office was:

                         100 West Tenth Street
                         Wilmington, Delaware, 19801

     3.   The address to which the registered office is to be changed is:
      
                         Corporation Trust Center
                         1209 Orange Street
                         Wilmington, Delaware 19801

          The new address will be effective on July 30, 1984.

     4.   The names of the corporations represented by said agent are set
          forth on the list annexed to this certificate and made a part hereof
          by reference.
                    
<PAGE> 7


          IN WITNESS WHEREOF, said agent has caused this certificate to be
     signed on its behalf by its Vice-President and Assistant Secretary this
     25th day of July, 1984.


                                   THE CORPORATION TRUST COMPANY
                                   -----------------------------
                                     (Name of Registered Agent)


                                   By: /S/ Virginia Colwell
                                   -----------------------------
                                     (Vice-President)

<PAGE> 8

                             CERTIFICATE OF MERGER
                                    MERGING
                        PARALLEL PETROLEUM CORPORATION
                              A TEXAS CORPORATION
                                     INTO 
                        PARALLEL PETROLEUM CORPORATION 
                            A DELAWARE CORPORATION
                                
              (Pursuant to Section 252 of the General Corporation
                         Law of the State of Delaware)
                                
     1.   The names of the constituent corporations and the states under the
laws of which they are respectively organized are 


              Name of Corporation                   State
         ------------------------------         -------------
         Parallel Petroleum Corporation             Texas

         Parallel Petroleum Corporation             Delaware


     2.   An agreement of Merger has been approved, adopted, certified,
executed and acknowledged by each of the constituent corporations in accordance
with Section 252(c) of the General Corporation Law of the State of Delaware.

     3.   The name of the surviving corporation is Parallel Petroleum
Corporation, a Delaware corporation.

     4.   The Certificate of Incorporation of Parallel Petroleum Corporation
shall be the Certificate of Incorporation of the surviving corporation.

     5.   The executed Agreement of Merger is on file at the principal place of
business of Parallel Petroleum Corporation.

                        Parallel Petroleum Corporation 
                              119 North Colorado
                                Metro Building
                                   Suite 500
                             Midland, Texas 79701
                                
     6.   A copy of the Agreement of Merger will be furnished by Parallel
Petroleum Corporation, on request and without cost, to any stockholder of any
constituent corporation.


<PAGE> 9

     7.   The authorized capital stock of Parallel Petroleum Corporation, Texas,
is 120,000,000 shares.

     IN WITNESS WHEREOF, said Parallel Petroleum Corporation, a Delaware
corporation, has caused its corporate seal to be affixed and this certificate to
be signed by Frank S. Delay, its President, and Larry C. Oldham, its Secretary,
this 17th day of December, A.D., 1984.

                                   By: /s/ Frank S. Delay                       
                                       -------------------------------
                                        Frank S. Delay, President

/s/ Larry C. Oldham
--------------------------------
Larry C. Oldham, Secretary

<PAGE> 10

STATE OF TEXAS

COUNTY OF MIDLAND

     Be it remembered that on this 17th day of December, A.D., 1984, personally
came before me, Phyllis D. Evans, a notary public in and for the county and
state aforesaid, Frank S. Delay, President of Parallel Petroleum Corporation,
a corporation of the State of Delaware, the Corporation described in and which
executed the foregoing Certificate, known to me personally to be such, and he,
the said Frank S. Delay, as such President, duly executed said Certificate
before me and acknowledged the said Certificate to be his act and deed and the
act and deed of said corporation; that the signatures of the said President and
of the Secretary of said corporation to said foregoing Certificate are in the
handwriting of the said President and Secretary of said corporation,
respectively, and that the seal affixed to said Certificate is the common or
corporate seal of said corporation.

     IN WITNESS WHEREOF, I have hereunto set my hand and seal of the office the
day and year aforesaid.

Notarial Seal                            /s/ Phyllis D. Evans
                                         --------------------------------------
                                         Name: Phyllis D. Evans
                                               --------------------------------
                                               Notary Public in and for said
My Commission Expires:                         County and State
11/24/85                                
-------------------------


ATTEST:

/S/ Mark
-----------------------------
     (Assistant Secretary)

<PAGE> 11
        
                        PARALLEL PETROLEUM CORPORATION
              CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RIGHTS
                          OF SERIAL PREFERRED STOCK -  
                  $.30 CUMULATIVE CONVERTIBLE PREFERRED STOCK

                    Pursuant to Section 151 of the Delaware
                            General Corporation Law

     RESOLVED, by the Board of Directors of Parallel Petroleum Corporation, a
Delaware corporation (the "Company"), that pursuant to authority expressly
granted to and vested in the Board of Directors by the provisions of the
Certificate of Incorporation of the Company, the Board of Directors hereby
creates a series of the class of authorized Serial Preferred Stock, $.10 par
value ("Preferred Stock"), of the Company, and authorizes the issuance thereof,
and hereby fixes the designations and amount thereof, and the voting powers,
preferences and relative, participation, optional and other special rights of
the shares of such series, and the qualifications, limitations or restrictions
thereof (in addition to the designations, preferences and relative,
participating, optional and other special rights of the shares of such series,
and the qualifications, limitations or restrictions thereof (in addition to
the designations, preferences and relative, participating and other special
rights, and the qualifications, limitations or restrictions thereof, set forth
in the Certificate of Incorporation of the Company, which are applicable to the
Serial Preferred Stock of all series) as follows:

     1.1  Designation and Amount.  The shares of such series shall be designated
".$30 Cumulative Convertible Preferred Stock" (such series being hereinafter
sometimes called "this Series"), and the number of shares constituting such
Series shall initially be 174,669.  The number of authorized shares of this
Series may be reduced by further resolution duly adopted by the Board of
Directors of the Company and by the filing of a certificate pursuant to the
provisions of the General Corporation Law of the State of Delaware stating that
such reduction has been so authorized, but the number of authorized shares of
this Series shall not be increased.  Shares in this Series have a par value of
$.10 per share.

     1.2  Dividends.  The holders of shares of this Series shall be entitled to
receive, out of the funds of the Company legally available therefore and as and
when declared by the Board of Directors, cash dividends at the rate of $.30 per
share per annum, payable semi-annually on the first day of the months of May and
November in each year, commencing November 1, 1986, except that if such date is
a Saturday, Sunday or legal holiday then such dividend shall be payable on the
first immediately preceding day which is not a Saturday, Sunday or legal
holiday.  Such dividends shall be cumulative (whether or not in any semi-annual
dividend period there shall be funds of the Company legally available for the
payment of such dividends), commencing on the date of original issue and shall
be payable for any period less than a full semi-annual period on the basis of a
year of 360 days with equal 30 day months.  Dividends shall be payable to
holders of record, as they appear on the stock books of the Company on such


<PAGE> 12

record dates as may be declared by the Board of Directors, not more than sixty
(60) days nor less than ten (10) days preceding the payment dates for such
dividends.  Dividends in arrears may be declared and paid at any time, without
reference to any regular dividend payment date, to holders of record on such
date, not exceeding sixty (60) days preceding the payment date thereof, as may
be fixed by the Board of Directors of the Company.  Except as provided below
with regard to any class of stock ranking on a parity with the Preferred Stock
as to payment of dividends.  In no event, so long as this Series shall remain
outstanding, shall any dividend whatsoever be declared or paid upon, nor shall
any distribution be made or ordered in respect of, any class of stock of the
Company ranking on a parity with or junior to this Series with respect to
payment of dividends, unless dividends on this Series since the date of issue
thereof to the date of such distribution shall have been paid or declared and
set apart for payment.  When dividends are not paid in full upon the shares of
this Series and any other preferred stock ranking on a parity as to payment of
dividends with this Series, all dividends declared upon shares of this Series
and any other preferred stock ranking on a parity as to dividends with this
Series shall be declared pro rata so that the amount of dividends declared per
share on this Series and such other preferred stock shall in all cases bear to
each other the same ratio that accrued dividends per share on the shares of this
Series and such other preferred stock bear to each other.  If full cumulative
dividends on this Series have not been declared and paid or set apart for
payment, the Company shall not declare or pay or set apart for payment any
dividends or make any other distributions on, or make any payment on account of
the purchase, redemption or retirement of, the Common Stock, $.01 par value, of
the Company ("Common Stock"), or any other stock of the Company ranking junior
to this Series as to dividends or distribution of assets on liquidation,
dissolution or winding up of the Company (other than, in the case of dividends
or distributions, dividends or distributions paid in shares of Common Stock or
such other junior ranking stock), until full cumulative dividends on this Series
are declared and paid or set apart for payment.

     1.3  Conversion.  The holders of shares of this Series shall have the
right, at their option, to convert all or any part of such shares of this Series
into shares of Common Stock of the Company at any time on and subject to the
following terms and conditions:

     (a)  The shares of this Series shall be convertible at the office of any
transfer agent for such stock, and at such other place or places, if any, as the
Board of Directors of the Company may designate, into fully paid and
nonassessable shares ) calculated as to each conversion to the nearest 1/100th
of a share) of Common Stock of the Company.  The number of shares of Common
Stock issuable upon conversion of each share of this Series shall be equal to
$3.00 divided by the conversion price in effect at the time of conversion,
determined as hereinafter provided.  The price at which shares of Common Stock
shall be delivered upon conversion (herein called the "conversion price") shall


<PAGE> 13

be initially $.50 per share of Common Stock and such conversion price shall be
and shall remain in effect until the close of business on March 1, 1988.  After
March 1, 1988, the conversion price shall be $.75 per share of Common Stock.
The conversion price shall be subject to adjustment from time to time in certain
instances as hereinafter provided.  If the Company calls for the redemption of
any shares of this Series, such right of conversion shall cease and terminate,
as to the shares designated for redemption, at the close of business on the
redemption date, unless the Company defaults in the payment of the redemption
price.  No fractional shares of Common Stock will be issued.  A cash payment
will be paid in lieu of any fractional share in an amount equal to the same
fraction of the last sale price on the Common Stock (determined as provided in
Section 1.3(c)(iv) at the close of business on the business day which next
precedes the day of conversion.

     (b)  Before any holder of shares of this Series shall be entitled to
convert the same into Common Stock, he shall surrender the certificate or
certificates therefor, duly endorsed or assigned to the Company or in blank, at
the office of any transfer agent for such stock or at such other place or
places, if any, as the Board of Directors of the Company may have designated,
and shall give written notice to the Company at said office or place that he
elects to convert the same and shall state in writing therein the name or names
(with addresses) in which he wishes the certificate or certificates for Common
Stock to be issued.  Shares of this Series surrendered for conversion during the
period from the close of business on any record date for the payment of a
dividend on the shares of this Series to the opening of business on the date for
payment of such dividends shall (except in the case of shares of this Series
which have been called for redemption on a redemption date within such period)
be accompanied by payment of an amount equal to the dividend payable on such
dividend payment date on the shares of this Series being surrendered for
conversion.  Except as provided in the preceding sentence, no payment or
adjustment shall be made upon any conversion on account of any dividend accrued
on the shares of this Series surrendered for conversion or on account of any
dividends on the Common Stock issued upon conversion.  The Company will, as soon
as practicable thereafter, issue and deliver at said office or place to such
holder of shares of this Series, or to his nominee or nominees, certificates for
the number of full shares of Common Stock to which he shall be entitled as
aforesaid, together with cash in lieu of any fraction of a share.  Shares of
this Series shall be deemed to have been converted as of the close of
business on the date of surrender of such shares for conversion as provided
above, and the person or persons entitled to receive the Common Stock
issuable upon such conversion shall be treated for all purposes as the
record holder or holders of such Common Stock as of the close of business on
such date.

     (c)  The conversion price in effect at any time shall be subject to
adjustment as follows:

<PAGE> 14

               (i)       In case the Company shall (A) declare a
          dividend or make a distribution payable in Common Stock
          on any class of capital stock of the Company, unless the
          payment thereof would increase the number of shares of
          Common Stock outstanding by less than one percent (1%),
          (B) subdivide or reclassify its outstanding shares of
          Common Stock into a greater number of shares, or (C)
          combine its outstanding shares of Common Stock into a
          smaller number of shares, the conversion price in effect at
          the time of the record date for such dividend or distribution
          or the effective date of such subdivision, combination or
          reclassification shall be proportionately reduced in the case
          of any increase in the number of shares of Common Stock
          outstanding and increased in the case of any reduction in
          the number of shares of Common Stock outstanding so
          that the holder of any share of this Series surrendered for
          conversion after such time shall be entitled to receive the
          kind and amount of shares which he would have owned or
          have been entitled to receive had such share of this Series
          been converted into Common Stock immediately prior to
          such time and had such Common Stock received such
          dividend or other distribution or participated in such
          subdivision, combination or reclassification.  Such
          adjustment shall be effective as of the record date for such
          dividend or distribution or the effective date of such
          combination, subdivision or reclassification and shall be
          made successively whenever any event listed above shall
          occur.

               (ii)      In case the Company shall issue rights or
          warrants to all holders of its Common Stock entitling them
          to subscribe for or purchase shares of Common Stock at a
          price per share less than the Current Market Price (as
          defined in paragraph (iv) below) of the Common Stock, on
          the date fixed for the determination of stockholders entitled
          to receive such rights or warrants, the conversion price at
          the opening of business on the day following the date fixed
          for such determination shall be reduced by multiplying the
          conversion price by a fraction of which the numerator shall
          be the number of shares of Common Stock outstanding at
          the close of business on the date fixed for such
          determination plus the number of shares of Common Stock
          which the aggregate of the offering price of the total
          number of shares of Common Stock so offered for


<PAGE> 15

          subscription or purchase would purchase at such Current
          Market Price of the Common Stock and the denominator
          shall be the number of shares of Common Stock
          outstanding at the close of business on the date fixed for
          such determination plus the number of shares of Common
          Stock so offered for subscription or purchase, such
          reduction to become effective immediately after the
          opening of business on the day following the date fixed for
          such determination.  For purposes of determining under
          this paragraph the number of shares of Common Stock
          outstanding at any time, there shall be excluded all shares
          of Common Stock held in the treasury of the Company.  If
          any or all such rights or warrants are not so issued or
          expire or terminate before being exercised, the conversion
          price then in effect shall be appropriately readjusted.

               (iii)     In case the Company shall distribute to all
          holders of its Common Stock evidences of its indebtedness
          or assets (including securities, but excluding cash dividends
          or a distribution referred to in paragraph (i) above or paid
          out of earned surplus) or subscription rights or warrants
          (excluding those referred to in paragraph (ii) above), the
          conversion price shall be adjusted so that it shall equal the
          price determined by multiplying the conversion price in
          effect immediately prior to the close of business on the
          date fixed for the determination of stockholders entitled to
          receive such distribution by a fraction of which the
          numerator shall be the Current Market Price per share of
          the Common Stock on the date fixed for such
          determination less the then fair market value (as
          determined by the Board of Directors of the Company, in
          good faith and in the exercise of its reasonable business
          judgment and described in a Board Resolution filed with
          any transfer agent for this Series) of the portion of the
          assets or evidences of indebtedness so distributed
          applicable to one share of Common Stock and the
          denominator shall be such Current Market Price per share
          of the Common Stock.  Such adjustment shall become
          effective immediately prior to the opening of business on
          the day following the date fixed for the determination of
          stockholders entitled to receive such distribution.

<PAGE> 16

               (iv)      For the purpose of any computation under
          paragraphs (ii) and (iii) above, the "Current Market Price"
          per share of Common Stock on any date shall be deemed
          to be the average of the daily closing prices per share of
          Common Stock for 15 consecutive business days selected
          by the Company commencing no more than 45 business
          days before such date.  The closing price for each day shall
          be the last reported sales price regular way or, in case no
          such sale takes place on such day, the average of the
          closing bid and asked prices regular way, in  either case on
          the American Stock Exchange, or, if the Common Stock is
          not listed or admitted to trading on such Exchange, on the
          principal national securities exchange or no such quotations
          are available, the average of the closing bid and asked
          prices as furnished by any member of the National
          Association of Securities Dealers, Inc. selected from time
          to time by the Company for that purpose or if no such
          quotations are available, the fair market value as
          determined in good faith in the exercise of their reasonable
          business judgment by the Board of Directors of the
          Company.

               (v)       All calculations under this section 1.3(c) shall be
          made to the nearest cent or to the nearest one-hundredth
          of a share, as the case may be.

               (vi)      No adjustment in the conversion price shall be
          required unless such adjustment would require a change of
          at least 1% in such price; provided, however, that any
          adjustments which by reason of this paragraph (vi) are not
          required to be made shall be carried forward and taken into
          account in any subsequent adjustment.

     (d)  Whenever the conversion price is adjusted as herein provided:

               (i)       The Company shall promptly file any of the
          transfer agents for this Series a certificate of the Treasurer
          of the Company setting forth the adjusted conversion price
          and showing in reasonable detail the facts upon which
          such adjustment is based, including a statement of the
          consideration received or to be received by the Company
          for any shares of Common Stock issued or deemed to have
          been issued; and

<PAGE> 17

               (ii)      a notice stating that the conversion price has
          been adjusted and setting forth the adjusted conversion
          price shall forthwith be required, and as soon as practicable
          after it is required, such notice shall be mailed by the
          Company to the holders of record of this series.

     (e)

               (i)       In case of any consolidation or merger of the
          Company with or into any other corporation (other than a
          merger which does not result in any reclassification,
          conversion, exchange or cancellation of the Common
          Stock), or in case of any sale or transfer of all or
          substantially all of the assets of the company, or the
          reclassification of the Common Stock into another form of
          capital stock of the Company, whether in whole or in part,
          the holder of each share of this Series shall have the right
          to receive securities, cash or property, or any combination
          thereof, having a value equal to the greater of (A) $3.00
          per share, plus an amount equal to all dividends
          accumulated and unpaid on each such share at the time of
          such consolidation, merger, sale or transfer or
          reclassification or (B) the value of the shares of stock and
          other securities, cash and property (including, if applicable,
          Common Stock) which such holder would have been
          entitled to receive upon such consolidation, merger, sale or
          transfer or reclassification if he had held the Common
          Stock issuable upon the conversion of such share of this
          Series immediately prior to such consolidation, merger, sale
          or transfer, or reclassification.

               (ii)      In the event that at any time, as a result of
          paragraph (i) above, the holder of any share of this Series
          shall become entitled to receive any shares of stock and
          other securities and property (including, if applicable,
          Common Stock), thereafter the amount of such shares of
          stock and other securities so receivable upon conversion of
          any share of this Series shall be subject to adjustment from
          time to time in a manner and on terms as nearly equivalent
          as practicable to the provisions with respect to the
          Common Stock contained in paragraphs (i) to (vi),
          inclusive, of section 1.3 (c) above, and for the provisions
          of section 1.3(c) with respect to the Common Stock shall


<PAGE> 18

          apply on like terms to any such shares of stock and other
          securities and property (including, if applicable, Common
          Stock).

     (f)  In case:

               (i)       the Company shall authorize the distribution to
          all holders of its Common Stock of evidences of its
          indebtedness of assets (other than cash dividends or other
          cash distributions paid out of earned surplus); or 

               (ii)      the Company shall authorize the granting to the
          holders of its Common Stock or rights or warrants to
          subscribe for or purchase any shares of capital stock of
          any class or of any other rights; or

               (iii)     of any reclassification of the capital stock of the
          Company (other than a subdivision or combination of its
          outstanding shares of Common Stock), or of any
          consolidation or merger to which the Company is required,
          or of the sale or transfer of all or substantially all of the
          assets of the Company; or

               (iv)      of the voluntary or involuntary dissolution,
          liquidation or winding up of the Company;

then, in each case, the Company shall cause to be filed with any of the transfer
agents for this Series, and shall cause to be mailed, first class postage
prepaid, to the holders of record of the outstanding shares of this Series, at
least 20 days prior to the applicable record date hereinafter specified, a
notice stating (x) the date on which a record is to be taken for the purpose of
such dividend, distribution, rights or warrants, or, if a record is not to be
taken, the date as of which the holders of Common Stock or record to be entitled
to such dividend, distribution, rights or warrants are to be determined, or (y)
the date on which such reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding up is expected to become effective, and the
date as of which it is expected that holders of Common Stock of record shall be
entitled to exchange their Common Stock for securities or other property
deliverable upon such reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding up.

     (g)  The Company shall at all times reserve and keep available, free from
preemptive rights, out of its authorized but unissued Common Stock, solely for
the purpose of effecting the conversion of the shares of this Series, the full
number of shares of Common Stock then issuable upon the conversion of all
outstanding shares of this Series.  For the purpose of this section 1.3(g), the


<PAGE> 19

full number of shares of Common Stock issuable upon the conversion of all
outstanding shares of this Series shall be computed as if at the time of
computation of such number of shares of Common Stock all outstanding shares of
this Series were held by a single holder.  The Company shall from time to time,
in accordance with the laws of the State of Delaware, increase the authorized
amount of its Common Stock if at any time the authorized amount of its Common
Stock remaining unissued shall not be sufficient to permit the conversion of all
shares of this Series at the time outstanding.  If any shares of Common Stock
required to be reserved for issuance upon conversions of shares of this Series
hereunder require registration with or approval of any governmental authority
under any Federal or State law before such shares may be issued upon such
conversion, the company will in good faith and as expeditiously as possible
endeavor to cause such shares to be so registered or approved.

     (h)  The Company will pay any and all taxes that may be payable in respect
of the issue or delivery of shares of Common Stock on conversion of shares of
this Series pursuant hereto.  The Company shall not, however, be required to pay
any tax which may be payable in respect of any transfer involved in the issue or
transfer and delivery of shares of Common Stock in a name other than that in
which the shares of this Series so converted were registered, and no such issue
or delivery shall be made unless and until the person requesting such issue has
paid to the Company the amount of any such tax or has established to the
satisfaction of the Company that such tax has been paid.

     (i)  Whenever reference is made in this section 1.3 to the issue or sale of
shares of Common Stock, the term "Common Stock" shall include only shares of the
class designated as Common Stock, $.01 par value, of the Company at the date
hereof or shares of any class or classes resulting from any reclassification or
reclassifications thereof and which have no preference in respect of dividends
or of amounts payable in the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Company and which are not subject to redemption
by the Company, provided that if at any time there shall be more than one such
resulting class, the shares of each such class then so deliverable shall be
substantially in the proportion which the total number of shares of such class
resulting from all such reclassifications bears to the total number of shares of
all such classes resulting from all such reclassifications.

     1.4  Liquidation Rights.  In the event of any liquidation, dissolution, or
winding up of the affairs of the Company, whether voluntary or otherwise, after
payment or provision for payment of the debts and other liabilities of the
Company, the holders of this Series shall be entitled to receive an amount in
cash for each share of this Series equal to $3.00 per share, plus an amount
equal to all dividends accumulated and unpaid on each such share up to the date
fixed for distribution, before any distribution shall be made to the holders of


<PAGE> 20

the Common Stock and of any other capital stock of the Company ranking junior to
this Series upon the liquidation, dissolution or winding up of the Company. If
upon any liquidation, dissolution or winding up of the Company, the assets
distributable among the holders of this Series shall be insufficient to permit
the payment in full to the holders of all the then outstanding shares of this
Series and all holders of preferred stock ranking on a parity with this Series
with respect to the payment upon liquidation, dissolution and winding up of the
Company of all preferential amounts payable to all such holders, then the entire
assets of the Company thus distributable shall be distributed ratably among the
holders of this Series and all such other holders of preferred stock in
proportion to the respective amounts that would be payable per share if such
assets were sufficient to permit payment in full.  Subject to the provisions of
section 1.3(e)(i), a consolidation or merger of the Company with or into one or
more corporations or the sale or transfer of all or substantially all of the
assets of the Company shall not be deemed to be a liquidation, dissolution or
winding up of the Company. 

     1.5  Optional Cash Redemption.  The shares of this Series are not
redeemable prior to May 145, 1987, unless the average of the closing bid and
asked prices of the Common Stock as quoted by any member of the National
Association of Securities Dealers, Inc. shall have equaled or exceeded 140% of
the conversion price in effect on the date of notice referred to below for at
least 20 of the 30 consecutive trading days immediately prior to the date notice
of redemption is given.  The share of this Series are redeemable for cash, in
whole at any time or from time to time in part at the option of the Company, at
a redemption price of $3.00 per share, plus any accumulated and unpaid dividends
thereon.

     Notice of redemption pursuant to this section 1.5 will be mailed at least
30 days but not more than 60 days before the redemption date to each holder of
record of shares of this Series to be redeemed at the address shown on the stock
books of the Company (but no failure to mail such notice or any defect therein
or in the mailing thereof shall affect the validity of the proceedings for such
redemption except as to the holder to whom the Company has failed to mail such
notice or except as to the holder whose notice was defective).  On and after the
redemption date, dividends shall cease to accumulate on shares of this Series
called for redemption (unless the Company defaults in the payment of the
redemption price).

     If less than all the outstanding shares of this Series not previously
called for redemption are to be redeemed pursuant to this section 2.5, shares to
be redeemed shall be selected by the Company from outstanding shares not
previously called for redemption by lot or pro rata (as nearly as may be) as
determined by the Board of Directors of the Company.  The Company may not
redeem less than all outstanding shares of this Series pursuant to this section
1.5 unless full cumulative dividends shall have been declared and paid or set
apart for payment upon all outstanding shares of this Series for all past


<PAGE> 21

dividend periods.  Shares of this Series redeemed by the Company will be
restored to the status of authorized but unissued shares of preferred stock,
without designation as to series, and may thereafter be issued, but not as
shares of this Series.

     1.6  Voting Rights.  The holders of shares of this Series shall have no
right to vote for any purpose, except as specifically required by the laws of
the State of Delaware and except as follows:

     (a)  So long as any shares of this Series remain outstanding, the
affirmative vote or consent of the holders of at least 66-2/3% of the then
outstanding shares of this Series, in person or by proxy, either in writing or
at a meeting called for that purpose (voting as a class with the holders of all
other series of preferred stock ranking on a parity with this Series either as
to dividends or distributions or upon liquidation, dissolution or winding up of
the Company and upon which like voting rights have been conferred and are then
exercisable), shall be necessary to permit, effect or validate the repeal,
amendment or other change of any provision of the Certificate of Incorporation
of the Company in any manner which materially and adversely affects the rights,
preferences, or privileges of this Series or the holders thereof; provided,
however, that any increase in the amount of authorized preferred stock or the
creation and issuance of other series of preferred stock, whether ranking on a
parity with or junior or prior to this Series with respect to the payment of
dividends or the distribution of assets upon liquidation, dissolution or winding
up shall not be deemed to materially and adversely affect such rights,
preferences or privileges.  

     The foregoing voting provisions will not apply if, at or prior to the time
when the act with respect to which such vote would otherwise be required shall
be effected, all outstanding shares of this Series shall have been redeemed or
sufficient funds shall have been deposited in trust to effect such redemption.  

     IN WITNESS WHEREOF, this Certificate has been executed and attested by the
undersigned on October 21, 1986, and shall be effective at 10:00 a.m. Eastern
Daylight Time, on October 21, 1986, or the date on which filed with the
Secretary of State of Delaware, whichever is later.

                                           PARALLEL PETROLEUM CORPORATION 

ATTEST:
                                           By:  /s/ Thomas R. Cambridge  
                                                -------------------------------
/s/ Larry C. Oldham                               Thomas R. Cambridge
--------------------------                        President
Larry C. Oldham, Secretary                        

<PAGE> 22

                        CERTIFICATE OF AMENDMENT TO THE
                         CERTIFICATE OF INCORPORATION 
                                      OF
                        PARALLEL PETROLEUM CORPORATION
                                
                                
     Parallel Petroleum Corporation, a corporation organized and existing under
the General Corporation Law of the State of Delaware (the "Corporation") does
hereby certify as follows:

     FIRST:  Pursuant to the provisions of the Delaware General Corporation Law,
the Board of Directors and the stockholders of the Corporation adopted the
Amendment to the Certificate of Incorporation of the Corporation, which is set
forth in the following resolution in accordance with Section 242 of the Delaware
General Corporation Law, the purpose of which Amendment is to add a new Article
Fourteenth to the Certificate of Incorporation:

     "RESOLVED, That Article Fourteenth is hereby added to the Certificate
     of Incorporation to read in its entirety as follows:

                              ARTICLE FOURTEENTH
                                
                                   Section 1
                                
          A director of the Corporation shall not be personally liable to the
     Corporation or its stockholders for monetary damages for breach of
     fiduciary duty as a director, except for liability (i) for any breach of
     the directors' duty of loyalty to the Corporation or tits stockholders,
     (ii) for acts or omissions not in good faith or whish involve intentional
     misconduct or a knowing violation of law, (iii) under Section 174 of the
     Delaware General Corporation Law, or (iv) for any transaction from
     which the director derived any improper personal benefit.  If the
     Delaware General Corporation Law is amended after approval by the
     stockholders of this article to authorize corporate action further
     eliminating or limiting the personal liability of directors, then the
     liability of a director of the Corporation shall be eliminated or limited
     to the fullest extent permitted by the Delaware General Corporation Law,
     as so amended.

          Any repeal or modification of the foregoing paragraph by the
     stockholders of the Corporation shall not adversely affect any right or
     protection of a director of the Corporation existing at the time of such
     repeal or modification.

<PAGE> 23

                                   Section 2

     (a)  Right to Indemnification.     Each person who was or is made a party
or is threatened to be made a party to or is otherwise involved in any action,
suit or proceeding, whether civil, criminal, administrative or investigative
(hereinafter a "proceeding"), by reason of the fact that he or she is or was a
director, officer or employee of the Corporation or is or was serving at the
request of the Corporation as a director, officer, employee or agent of another
corporation or of a partnership, joint venture, trust or other enterprise,
including service with respect to employee benefit plans (hereinafter an
"indemnitee"), whether the basis of such proceeding is alleged action in an
official capacity as a director, officer, employee or agent or in any other
capacity while serving as a director, officer, employee or agent, shall be
indemnified and held harmless by the Corporation to the fullest extent
authorized by the Delaware General Corporation Law, as the same exists or may
hereafter be amended (but, in the case of any such amendment, only to the
extent that such amendment permits the Corporation to provide broader
indemnification rights than such law permitted the Corporation to provide prior
to such amendment), against all expense, liability and loss (including
attorneys' fees, judgments, fines, ERISA excise taxes or penalties and amounts
paid in settlement) reasonably incurred or suffered by such indemnitee in
connection therewith and such indemnification shall continue as to an indemnitee
who has ceased to e a director, officer, employee or agent and shall inure to
the benefit of the indemnitee's heirs, executors and administrators; provided,
however, that, except as provided in paragraph (b) hereof with respect to
proceedings to enforce rights to indemnification, the Corporation shall
indemnify any such indemnitee in connection with a proceeding (or part thereof)
initiated such indemnitee only if such proceeding (or part thereof) was
authorized by the Board of Directors of the Corporation.  The right to
indemnification conferred in this Section shall be a contract right and shall
include the right to be paid by the Corporation the expenses incurred in
defending any such proceeding in advance of its final disposition (hereinafter
an  "advancement of expenses"); provided, however, that, if the Delaware General
Corporation Law requires, an advancement of expenses incurred by an indemnitee
in his or her capacity as a director or officer (and not in any other capacity
in which service was or is rendered by such indemnitee, including without
limitation, service to an employee benefit plan) shall be made only upon
delivery to the Corporation of an undertaking, by or on behalf of such
indemnitee, to undertaking, by or on behalf of such indemnitee, to repay all
amounts so advanced if it shall ultimately be determined by final judicial
decision from which there is no further right to appeal that such indemnitee is
not entitled to be indemnified for such expenses under this Section or otherwise
(hereinafter an "undertaking").

     (b)  Right of Indemnitee to Bring Suite.  If a claim under paragraph (a) of
this Section is not paid in full by the Corporation within sixty days after a
written claim has been received by the Corporation, except in the case of a
claim for an advancement of expenses, in which case the applicable period shall


<PAGE> 24

be twenty days, the indemnitee may at any time thereafter bring suit against the
Corporation to recover the unpaid amount of the claim.  If successful in whole
or in part in any such suit or in a suit brought by the Corporation to recover
an advancement of expenses pursuant to the terms of an undertaking, the
indemnitee shall be entitled to be paid also the expense of prosecuting or
defending such suit.  In (i) any suite brought by the indemnitee to enforce a
right to indemnification hereunder (but not in a suit brought by the indemnitee
to enforce a right to an advancement of expenses) it shall be a defense that,
and (ii) any suit by the Corporation to recover an advancement of expenses
pursuant to the terms of an undertaking the Corporation shall be entitled to
recover such expenses upon a final adjudication that, the indemnitee has not met
the applicable standard of conduct set forth in the Delaware General Corporation
Law.  Neither the failure of the Corporation (including its Board of Directors,
independent legal counsel, or its stockholders) to have made a determination
prior to the commencement of such suit that indemnification of the indemnitee is
proper in the circumstances because the indemnitee has met the applicable
standard of conduct set forth in the Delaware General Corporation Law, nor an
actual determination by the Corporation (including its Board of Directors),
independent legal counsel or its stockholders) that the indemnitee has not met
such applicable standard of conduct, shall create a presumption that the
indemnitee has not met the applicable standard of conduct or, in the case of
such suit brought by the indemnitee, be a defense to such suit.  In any suit
brought by the indemnitee to enforce a right hereunder, or by the Corporation to
recover an advancement of expenses pursuant to the terms of an undertaking, the
burden of proving that the indemnitee is not entitled to be indemnified or to
such advancement of expenses under this Section or otherwise shall be on the
Corporation.

     (c)  Non-Exclusivity of Rights.  The rights to indemnification and to the
advancement of expenses conferred in this Section shall not be exclusive of any
other right which any person may have or hereafter acquire under any statute,
this Certificate of Incorporation, by-law, agreement, vote of stockholders or
disinterested directors or otherwise.

     (d)  Insurance.  The Corporation may maintain insurance, at its expense, to
protect itself and any director, officer, employee or agent of the Corporation
or another corporation, partnership, joint venture, trust or other enterprise
against any expense, liability or loss, whether or not the Corporation would
have the power to indemnify such person against such expense, liability or loss
under the Delaware General Corporation Law.

     (e)  Indemnification of Agents of the Corporation.  The Corporation may, to
the extent authorized from time to time by the Board of Directors, grant rights
to indemnification and to the advancement of expenses, to any agent of the


<PAGE> 25

Corporation to the fullest extent of the Provisions of this Section with respect
to the indemnification and advancement of expenses of directors, officers and
employees of the Corporation.

     SECOND:   Pursuant to the provisions of the Delaware General Corporation
Law, the Board of Directors and the stockholders of the Corporation adopted the
amendment to the Certificate of Designations, Preferences and Rights of Serial
Preferred Stock - $.30 Cumulative Convertible Preferred Stock filed October 27,
1986 with the Delaware Secretary of State, which is set forth in the following
resolution in accordance with Section 242 of the Delaware General Corporation
Law, the purpose of which Amendment is to reduce the conversion price of the
Corporation's outstanding shares of $.30 Cumulative Convertible Preferred 
Stock:

     RESOLVED, That Section 1.3(a) of the Certificate of Designations,
     Preferences and Rights of Serial Preferred Stock - $.30 Cumulative
     Convertible Preferred Stock is hereby amended to read in its entirety as
     follows:

          (a)  The shares of this Series shall be convertible at the office of
          any transfer agent for such stock, and at such other place or places,
          if any, as the Board of Directors of the Company may designate, into
          fully paid and nonassessable shares (calculated as to each conversion
          to the nearest 1/100th of a share) of Common Stock of the Company.
          The number of shares of Common Stock issuable upon conversion of each
          share of this Series shall be equal to $3.00 divided by the conversion
          price in effect at the time of conversion, determined as hereinafter
          provided.  The price at which shares of Common Stock shall be
          delivered upon conversion (herein called the "conversion price") shall
          be $.25 per share of Common Stock and such conversion price shall be
          and shall remain in effect until the close of business on August 15,
          1988.  After August 15, 1988 the conversion price shall be $.50 per
          share of Common Stock.  The conversion price shall be subject to
          adjustment from time to time in certain instances as hereinafter
          provided.  If the Company calls for the redemption of any shares of
          this Series, such right of conversion shall cease and terminate, as to
          the shares designated for redemption, at the close of business on the
          redemption date, unless the Company defaults in the payment of the
          redemption price.  No fractional shares of Common Stock will be
          issued.  A cash payment will be paid in lieu of any fractional share
          in an amount equal to the same fraction of the last sale price on the
          Common Stock (determined as provided in Section 1.3(c)(iv) at the
          close of business on the business day which next precedes the day of
          conversion.


<PAGE> 26

     IN WITNESS WHEREOF, Parallel Petroleum Corporation has caused this
Certificate of Amendment to be signed by Thomas R. Cambridge, its President, and
attested by Larry C. Oldham, its Secretary, this 15th day of June, 1988.

                                               Parallel Petroleum Corporation

                                               By:/S/ Thomas R. Cambridge    
                                                  ---------------------------
                                                  Thomas R. Cambridge,     
                                                  President
ATTESTED:

/S/ Larry C. Oldham      
---------------------------------
Larry C. Oldham, Secretary

     The undersigned President of Parallel Petroleum Corporation, being duly
sworn, does verify that the foregoing instrument represents the act and deed of
Parallel Petroleum Corporation and that the facts stated in such instrument are
true.


                                               /S/ Thomas R. Cambridge      
                                               ------------------------------
                                               Thomas R. Cambridge, President

THE STATE OF TEXAS       

COUNTY OF MIDLAND 

     Before me, the undersigned authority, on this day personally appeared
Thomas R. Cambridge and Larry C. Oldham, President and Secretary, respectively,
of Parallel Petroleum Corporation, a corporation formed under the laws of the
State of Delaware, known to me to be the individuals whose names are subscribed
to the foregoing instrument, and acknowledged and swore to me that they each
executed the same for the purposes and consideration therein expressed and as
the act and deed of said corporation and that the facts stated in the foregoing
instrument are true.

     GIVEN UNDER MY HAND AND SEAL OF OFFICE this 15th of June, 1988.

                                               /S/ Jimmie L. Cromwell 
                                               ------------------------------
                                               Name:Jimmie L. Cromwell
                                                    -------------------------
                                                    Notary Public in and for 
Commission Expires:                                   the State of Texas
     1-26-91                              
---------------------------

<PAGE> 27

                       PARALLEL PETROLEUM CORPORATION
           CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RIGHTS
                OF PREFERRED STOCK   NON-VOTING CONVERTIBLE
                              PREFERRED STOCK

                 Pursuant to Section 151 of the Delaware
                         General Corporation Law

     The undersigned, President and Secretary, respectively, of Parallel
Petroleum Corporation, a Delaware corporation (the "Company"), certify that
pursuant to authority granted to and vested in the Board of Directors of the
Company by the provisions of the Certificate of Incorporation of the Company,
the Board of Directors has duly adopted the following resolutions creating a
series of Preferred Stock of the Company designated as the Non-Voting
Convertible Preferred Stock:

     RESOLVED, by the Board of Directors of Parallel Petroleum Corporation, a
Delaware corporation (the "Company"), that pursuant to authority expressly
granted to and vested in the Board of Directors by the provisions of the
Certificate of Incorporation of the Company, the Board of Directors hereby
creates a series of the class of authorized Preferred Stock, $.10 par value
("Preferred Stock"), of the Company, and authorizes the issuance thereof, and
hereby fixes the designations and amount thereof, and the voting powers,
preferences and relative, participation, optional and other special rights of
the shares of such series, and the qualifications, limitations or restrictions
thereof (in addition to the designations, preferences and relative,
participating, optional and other special rights of the shares of such
series, and the qualifications, limitations or restrictions thereof
(in addition to the designations, preferences and relative, participating
and other special rights, and the qualifications, limitations or restrictions
thereof, set forth in the Certificate of Incorporation of the Company, which
are applicable to the Preferred Stock) as follows:

     1.1  Designation and Amount.  The shares of such series shall be
designated Non-Voting Convertible Preferred Stock" (such series being
hereinafter sometimes called "this Series"), and the number of shares
constituting such Series shall initially be 65,248.  The number of authorized
shares of this Series may be reduced by further resolution duly adopted by
the Board of Directors of the Company and by the filing of a certificate
pursuant to the provisions of the General Corporation Law of the State of
Delaware stating that such reduction has been so authorized, but the number
of authorized shares of this Series shall not be increased.  Shares in this
Series have a par value of $.10 per share.

     1.2  Dividends.  The holders of shares of this Series shall not be
entitled to receive dividends.

     1.3  Conversion.  The holders of shares of this Series shall have the
right, at their option, to convert all or any part of such shares of this

<PAGE> 28

Series into shares of Common Stock of the Company at any time on and subject
to the following terms and conditions:

     (a)  The shares of this Series shall be convertible at the office of
any transfer agent for such stock, and at such other place or places, if any,
as the Board of Directors of the Company may designate, into fully paid and
nonassessable shares) calculated as to each conversion to the nearest 1/100th
of a share) of Common Stock of the Company.  The number of shares of Common
Stock issuable upon conversion of each share of this Series shall be equal to
$3.50 divided by the conversion price in effect at the time of conversion,
determined as hereinafter provided.  The price at which shares of Common
Stock shall be delivered upon conversion (herein called the "conversion
price") shall be initially $.35 per share of Common Stock.  The conversion
price shall be subject to adjustment from time to time in certain instances
as hereinafter provided.  If the Company calls for the redemption of any
shares of this Series, such right of conversion shall cease and terminate,
as to the shares designated for redemption, at the close of business on the
redemption date, unless the Company defaults in the payment of the redemption
price.  No fractional shares of Common Stock will be issued.  A cash payment
will be paid in lieu of any fractional share in an amount equal to the same
fraction of the last sale price on the Common Stock (determined as provided
in Section 1.3(c)(iv)) at the close of business on the business day which
next precedes the day of conversion.

     (b)  Before any holder of shares of this Series shall be entitled to
convert the same into Common Stock, he shall surrender the certificate or
certificates therefor, duly endorsed or assigned to the Company or in blank,
at the office of any transfer agent for such stock or at such other place or
places, if any, as the Board of Directors of the Company may have designated,
and shall give written notice to the Company at said office or place that he
elects to convert the same and shall state in writing therein the name or
names (with addresses) in which he wishes the certificate or certificates for
Common Stock to be issued.  No payment or adjustment shall be made upon any
conversion on account of any dividends on the Common Stock issued upon
conversion.  The Company will, as soon as practicable thereafter, issue and
deliver at said office or place to such holder of shares of this Series, or
to his nominee or nominees, certificates for the number of full shares of
Common Stock to which he shall be entitled as aforesaid, together with cash
in lieu of any fraction of a share. Shares of this Series shall be deemed to
have been converted as of the close of business on the date of surrender of
such shares for conversion as provided above, and the person or persons
entitled to receive the Common Stock issuable upon such conversion shall be
treated for all purposes as the record holder or holders of such Common Stock
as of the close of business on such date.

     (c)  The conversion price in effect at any time shall be subject to
adjustment as follows:

<PAGE> 29

               (i)  In case the Company shall (A) declare a
          dividend or make a distribution payable in Common Stock
          on any class of capital stock of the Company, unless the
          payment thereof would increase the number of shares of
          Common Stock outstanding by less than one percent (1%),
          (B) subdivide or reclassify its outstanding shares of
          Common Stock into a greater number of shares, or (C)
          combine its outstanding shares of Common Stock into a
          smaller number of shares, the conversion price in effect at
          the time of the record date for such dividend or distribution
          or the effective date of such subdivision, combination or
          reclassification shall be proportionately reduced in the case
          of any increase in the number of shares of Common Stock
          outstanding and increased in the case of any reduction in
          the number of shares of Common Stock outstanding so that
          the holder of any share of this Series surrendered for
          conversion after such time shall be entitled to receive the
          kind and amount of shares which he would have owned or
          have been entitled to receive had such share of this Series
          been converted into Common Stock immediately prior to
          such time and had such Common Stock received such
          dividend or other distribution or participated in such
          subdivision, combination or reclassification.  Such
          adjustment shall be effective as of the record date for such
          dividend or distribution or the effective date of such
          combination, subdivision or reclassification and shall be
          made successively whenever any event listed above shall
          occur.

               (ii) In case the Company shall issue rights or
          warrants to all holders of its Common Stock entitling them
          to subscribe for or purchase shares of Common Stock at a
          price per share less than the Current Market Price (as
          defined in paragraph (iv) below) of the Common Stock, on
          the date fixed for the determination of stockholders entitled
          to receive such rights or warrants, the conversion price at
          the opening of business on the day following the date fixed
          for such determination shall be reduced by multiplying the
          conversion price by a fraction of which the numerator shall
          be the number of shares of Common Stock outstanding at
          the close of business on the date fixed for such
          determination plus the number of shares of Common Stock
          which the aggregate of the offering price of the total

<PAGE> 30

          number of shares of Common Stock so offered for
          subscription or purchase would purchase at such Current
          Market Price of the Common Stock and the denominator
          shall be the number of shares of Common Stock
          outstanding at the close of business on the date fixed for
          such determination plus the number of shares of Common
          Stock so offered for subscription or purchase, such
          reduction to become effective immediately after the opening
          of business on the day following the date fixed for such
          determination.  For purposes of determining under this
          paragraph the number of shares of Common Stock
          outstanding at any time, there shall be excluded all shares
          of Common Stock held in the treasury of the Company.  If
          any or all such rights or warrants are not so issued or expire
          or terminate before being exercised, the conversion price
          then in effect shall be appropriately readjusted.

               (iii)     In case the Company shall distribute to all
          holders of its Common Stock evidences of its indebtedness
          or assets (including securities, but excluding cash dividends
          or a distribution referred to in paragraph (i) above or paid
          out of earned surplus) or subscription rights or warrants
          (excluding those referred to in paragraph (ii) above), the
          conversion price shall be adjusted so that it shall equal the
          price determined by multiplying the conversion price in
          effect immediately prior to the close of business on the date
          fixed for the determination of stockholders entitled to
          receive such distribution by a fraction of which the
          numerator shall be the Current Market Price per share of the
          Common Stock on the date fixed for such determination
          less the then fair market value (as determined by the Board
          of Directors of the Company, in good faith and in the
          exercise of its reasonable business judgment and described
          in a Board Resolution filed with any transfer agent for this
          Series) of the portion of the assets or evidences of
          indebtedness so distributed applicable to one share of
          Common Stock and the denominator shall be such Current
          Market Price per share of the Common Stock.  Such
          adjustment shall become effective immediately prior to the
          opening of business on the day following the date fixed for
          the determination of stockholders entitled to receive such
          distribution.

<PAGE> 31


               (iv) For the purpose of any computation under
          paragraphs (ii) and (iii) above, the "Current Market Price" per
          share of Common Stock on any date shall be deemed to be
          the average of the daily closing prices per share of Common
          Stock for 15 consecutive business days selected by the
          Company commencing no more than 45 business days
          before such date.  The closing price for each day shall be
          the last reported sales price regular way or, in case no such
          sale takes place on such day, the average of the closing bid
          and asked prices regular way, in  either case on the
          American Stock Exchange, or, if the Common Stock is not
          listed or admitted to trading on such Exchange, on the
          principal national securities exchange or no such quotations
          are available, the average of the closing bid and asked
          prices as furnished by any member of the National
          Association of Securities Dealers, Inc. selected from time to
          time by the Company for that purpose or if no such
          quotations are available, the fair market value as determined
          in good faith in the exercise of their reasonable business
          judgment by the Board of Directors of the Company.

               (v)  All calculations under this section 1.3(c) shall
          be made to the nearest cent or to the nearest one-
          hundredth of a share, as the case may be.

               (vi) No adjustment in the conversion price shall be
          required unless such adjustment would require a change of
          at least 1% in such price; provided, however, that any
          adjustments which by reason of this paragraph (vi) are not
          required to be made shall be carried forward and taken into
          account in any subsequent adjustment.

     (d)  Whenever the conversion price is adjusted as herein provided:

               (i)  the Company shall promptly file any of the
          transfer agents for this Series a certificate of the Treasurer
          of the Company setting forth the adjusted conversion price
          and showing in reasonable detail the facts upon which such
          adjustment is based, including a statement of the
          consideration received or to be received by the Company for
          any shares of Common Stock issued or deemed to have
          been issued; and

<PAGE> 32

               (ii) a notice stating that the conversion price has
          been adjusted and setting forth the adjusted conversion
          price shall forthwith be required, and as soon as practicable
          after it is required, such notice shall be mailed by the
          Company to the holders of record of this series.

     (e)

               (i)  In case of any consolidation or merger of the
          Company with or into any other corporation (other than a
          merger which does not result in any reclassification,
          conversion, exchange or cancellation of the Common
          Stock), or in case of any sale or transfer of all or
          substantially all of the assets of the company, or the
          reclassification of the Common Stock into another form of
          capital stock of the Company, whether in whole or in part,
          the holder of each share of this Series shall have the right
          to receive securities, cash or property, or any combination
          thereof, having a value equal to the greater of (A) $3.50 per
          share, plus an amount equal to all dividends accumulated
          and unpaid on each such share at the time of such
          consolidation, merger, sale or transfer or reclassification or
          (B) the value of the shares of stock and other securities,
          cash and property (including, if applicable, Common Stock)
          which such holder would have been entitled to receive upon
          such consolidation, merger, sale or transfer or
          reclassification if he had held the Common Stock issuable
          upon the conversion of such share of this Series

<PAGE> 33

          immediately prior to such consolidation, merger, sale or
          transfer, or reclassification.

               (ii) In the event that at any time, as a result of
          paragraph (i) above, the holder of any share of this Series
          shall become entitled to receive any shares of stock and
          other securities and property (including, if applicable,
          Common Stock), thereafter the amount of such shares of
          stock and other securities so receivable upon conversion of
          any share of this Series shall be subject to adjustment from
          time to time in a manner and on terms as nearly equivalent
          as practicable to the provisions with respect to the Common
          Stock contained in paragraphs (i) to (vi), inclusive, of
          section 1.3 (c) above, and for the provisions of section
          1.3(c) with respect to the Common Stock shall apply on like
          terms to any such shares of stock and other securities and
          property (including, if applicable, Common Stock).

     (f)  In case:

               (i)  the Company shall authorize the distribution to
          all holders of its Common Stock of evidences of its
          indebtedness of assets (other than cash dividends or other
          cash distributions paid out of earned surplus); or 

               (ii) the Company shall authorize the granting to
          the holders of its Common Stock or rights or warrants to
          subscribe for or purchase any shares of capital stock of any
          class or of any other rights; or

               (iii)     of any reclassification of the capital stock of
          the Company (other than a subdivision or combination of its
          outstanding shares of Common Stock), or of any
          consolidation or merger to which the Company is required,
          or of the sale or transfer of all or substantially all of the
          assets of the Company; or

               (iv) of the voluntary or involuntary dissolution,
          liquidation or winding up of the Company;

then, in each case, the Company shall cause to be filed with any of the
transfer agents for this Series, and shall cause to be mailed, first class
postage prepaid, to the holders of record of the outstanding shares of this
Series, at least 20 days prior to the applicable record date hereinafter
specified, a notice stating (x) the date on which a record is to be taken
for the purpose of such dividend, distribution, rights or warrants,
or, if a record is not to be taken, the date as of which the holders of
Common Stock or record to be entitled to such dividend, distribution, rights
or warrants are to be determined, or (y) the date on which such
reclassification, consolidation, merger, sale, transfer, dissolution,
liquidation or winding up is expected to become effective, and
the date as of which it is expected that holders of Common Stock of record
shall be entitled to exchange their Common Stock for securities or other
property deliverable upon such reclassification, consolidation, merger, sale,
transfer, dissolution, liquidation or winding up.

     (g)  The Company shall at all times reserve and keep available, free
from preemptive rights, out of its authorized but unissued Common Stock,
solely for the purpose of effecting the conversion of the shares of this
Series, the full number of shares of Common Stock then issuable upon the
conversion of all outstanding shares of this Series.  For the purpose of

<PAGE> 34
 
this section 1.3(g), the full number of shares of Common Stock issuable upon
the conversion of all outstanding shares of this Series shall be computed as
if at the time of computation of such number of shares of Common Stock all
outstanding shares of this Series were held by a single holder.  The
Company shall from time to time, in accordance with the laws of the State of
Delaware, increase the authorized amount of its Common Stock if at any time
the authorized amount of its Common Stock remaining unissued shall not be
sufficient to permit the conversion of all shares of this Series at the time
outstanding.  If any shares of Common Stock required to be reserved for
issuance upon conversions of shares of this Series hereunder require
registration with or approval of any governmental authority under any
Federal or State law before such shares may be issued upon such
conversion, the company will in good faith and as expeditiously as possible
endeavor to cause such shares to be so registered or approved.

     (h)  The Company will pay any and all taxes that may be payable in
respect of the issue or delivery of shares of Common Stock on conversion of
shares of this Series pursuant hereto.  The Company shall not, however, be
required to pay any tax which may be payable in respect of any transfer
involved in the issue or transfer and delivery of shares of Common Stock in
a name other than that in which the shares of this Series so converted were
registered, and no such issue or delivery shall be made unless and until the
person requesting such issue has paid to the Company the amount of any such
tax or has established to the satisfaction of the Company that such tax
has been paid.

     (i)  Whenever reference is made in this section 1.3 to the issue or
sale of shares of Common Stock, the term "Common Stock" shall include only
shares of the class designated as Common Stock, $.01 par value, of the
Company at the date hereof or shares of any class or classes resulting from
any reclassification or reclassifications thereof and which have no
preference in respect of dividends or of amounts payable in the event of any
voluntary or involuntary liquidation, dissolution or winding up of the
Company and which are not subject to redemption by the Company, provided
that if at any time there shall be more than one such resulting class, the
shares of each such class then so deliverable shall be substantially in the
proportion which the total number of shares of such class resulting from all
such reclassifications bears to the total number of shares of all such
classes resulting from all such reclassifications.

     1.4  Liquidation Rights.  In the event of any liquidation, dissolution,
or winding up of the affairs of the Company, whether voluntary or otherwise,
after payment or provision for payment of the debts and other liabilities of
the Company, the holders of this Series shall be entitled to receive an
amount in cash for each share of this Series equal to $3.50 per share, plus

<PAGE> 35

an amount equal to all dividends accumulated and unpaid on each such share
up to the date fixed for distribution, before any distribution shall be made
to the holders of the Common Stock and of any other capital stock of
the Company ranking junior to this Series upon the liquidation, dissolution
or winding up of the Company. If upon any liquidation, dissolution or
winding up of the Company, the assets distributable among the holders of
this Series shall be insufficient to permit the payment in full to the
holders of all the then outstanding shares of this Series and
all holders of preferred stock ranking on a parity with this Series with
respect to the payment upon liquidation, dissolution and winding up of the
Company of all preferential amounts payable to all such holders, then the
entire assets of the Company thus distributable shall be distributed ratably
among the holders of this Series and all such other holders of preferred
stock in proportion to the respective amounts that would be payable per
share if such assets were sufficient to permit payment in full.  Subject to
the provisions of section 1.3(e)(i), a consolidation or merger of the Company
with or into one or more corporations or the sale or transfer of all or
substantially all of the assets of the Company shall not be deemed to be a
liquidation, dissolution or winding up of the Company.

     1.5  Optional Cash Redemption.  The shares of this Series are redeemable
for cash, in whole at any time or from time to time in part at the option of
the Company, at a redemption price of $3.50 per share.

     Notice of redemption pursuant to this section 1.5 will be mailed at
least 30 days but not more than 60 days before the redemption date to each
holder of record of shares of this Series to be redeemed at the address
shown on the stock books of the Company (but no failure to mail such notice
or any defect therein or in the mailing thereof shall affect the validity of
the proceedings for such redemption except as to the holder to whom the
Company has failed to mail such notice or except as to the holder whose
notice was defective).  On and after the redemption date, dividends shall
cease to accumulate on shares of this Series called for redemption (unless
the Company defaults in the payment of the redemption price).

     If less than all the outstanding shares of this Series not previously
called for redemption are to be redeemed pursuant to this section 1.5,
shares to be redeemed shall be selected by the Company from outstanding
shares not previously called for redemption by lot or pro rata (as nearly as
may be) as determined by the Board of Directors of the Company.  Shares of
this Series redeemed by the Company will be restored to the status of
authorized but unissued shares of preferred stock, without designation as to
series, and may thereafter be issued, but not as shares of this Series.

     1.6  Voting Rights.  The holders of shares of this Series shall have no
right to vote for any purpose, except as specifically required by the laws of
the State of Delaware and except as follows:

<PAGE> 36

          (a)  So long as any shares of this Series remain outstanding, the
     affirmative vote or consent of the holders of at least 66-2/3% of the
     then outstanding shares of this Series, in person or by proxy, either in
     writing or at a meeting called for that purpose (voting as a class with
     the holders of all other series of preferred stock ranking on a parity
     with this Series either as to dividends or distributions or upon
     liquidation, dissolution or winding up of the Company and upon which
     like voting rights have been conferred and are then exercisable), shall
     be necessary to permit, effect or validate the repeal, amendment or
     other change of any provision of the Certificate of Incorporation of
     the Company in any manner which materially and adversely affects the
     rights, preferences, or privileges of this Series or the holders
     thereof; provided, however, that any increase
     in the amount of authorized preferred stock or the creation and issuance
     of other series of preferred stock, whether ranking on a parity with or
     junior or prior to this Series with respect to the payment of dividends
     or the distribution of assets upon liquidation, dissolution or winding up
     shall not be deemed to materially and adversely affect such rights,
     preferences or privileges.  

     The foregoing voting provisions will not apply if, at or prior to the time
when the act with respect to which such vote would otherwise be required
shall be effected, all outstanding shares of this Series shall have been
redeemed or sufficient funds shall have been deposited in trust to effect
such redemption.

     1.7  Parity.  The shares of this Series shall be on a parity with the
Company's $.30 Cumulative Convertible Preferred Stock with respect to the
distribution of assets upon liquidation, dissolution or winding up of the
Company.

     IN WITNESS WHEREOF, this Certificate has been executed and attested by
the undersigned on October 10, 1988, and shall be effective on the date filed
with the Secretary of State of Delaware.


                                         PARALLEL PETROLEUM CORPORATION 



                                         By /S/ Thomas R. Cambridge
                                         -------------------------------
                                         Thomas R. Cambridge, President

ATTEST:


/S/ Larry C. Oldham
--------------------------
Larry C. Oldham, Secretary


<PAGE> 37

                        PARALLEL PETROLEUM CORPORATION
            CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RIGHTS
                        OF SERIAL PREFERRED STOCK - 
                        $.60 CUMULATIVE CONVERTIBLE
                              PREFERRED STOCK

                  Pursuant to Section 151 of the Delaware
                          General Corporation Law

     The undersigned, President and Secretary, respectively, of Parallel
Petroleum Corporation, a Delaware corporation (the "Company"), certify that
pursuant to authority granted to and vested in the Board of Directors of the
Company by the provisions of the Certificate of Incorporation of the Company,
the Board of Directors has duly adopted the following resolutions creating a
series of Serial Preferred Stock of the Company designated as the $.60
Cumulative Convertible Preferred Stock:

     RESOLVED, by the Board of Directors of Parallel Petroleum Corporation,
a Delaware corporation (the "Company"), that pursuant to authority expressly
granted to and vested in the Board of Directors by the provisions of the
Certificate of Incorporation of the Company, the Board of Directors hereby
creates a series of the class of authorized Serial Preferred Stock, $.10 par
value ("Preferred Stock"), of the Company, and authorizes the issuance
thereof, and hereby fixes the designations and amount thereof, and the
voting powers, preferences and relative, participating, optional and other
special rights of the shares of such series, and the qualifications,
limitations or restrictions thereof (in addition to the designations,
preferences and relative, participating and other special rights, and the
qualifications, limitations or restrictions thereof, set forth in the
Certificate of Incorporation of the Company, which are applicable to the
Serial Preferred Stock of all series) as follows:

     1.1  Designation and Amount.  The shares of such series shall be
designated "$.60 Cumulative Convertible Preferred Stock" (such series being
hereinafter sometimes called "this Series"), and the number of shares
constituting such Series shall initially be 600,000. The number of authorized
shares of this Series may be reduced by further resolution duly adopted by
the Board of Directors of the Company and by the filing of a certificate
pursuant to the provisions of the General Corporation Law of the State of
Delaware stating that such reduction has been so authorized, but the number
of authorized shares of this Series shall not be increased.  Shares in this
Series have a par value of $.10 per share.

     1.2  Dividends.  The holders of shares of this Series shall be entitled
to receive, out of the funds of the Company legally available therefor and as
and when declared by the Board of Directors, cash dividends at the rate of
$.60 per share per annum, payable semi-annually on the fifteenth day of the
months of June and December in each year, commencing June 15, 1998, except

<PAGE> 38

that if such date is a Saturday, Sunday or legal holiday then such dividend
shall be payable on the first immediately preceding day which is not a
Saturday, Sunday or legal holiday.  Such dividends shall be cumulative
(whether or not in any semi-annual dividend period there shall be funds of
the Company legally available for the payment of such dividends), commencing
on the date of original issue and shall be payable for any period less than
a full semi-annual period on the basis of a year of 360 days with equal 30
day months. Dividends shall be payable to holders of record, as they appear
on the stock books of the Company on such record dates as may be declared by
the Board of Directors, not more than sixty (60) days nor less than ten (10)
days preceding the payment dates for such dividends.  Dividends in arrears
may be declared and paid at any time, without reference to any regular
dividend payment date, to holders of record on such date, not exceeding
sixty (60) days preceding the payment date thereof, as may be fixed by the
Board of Directors of the Company.  Except as provided below with regard to
any class of stock ranking on a parity with the Preferred Stock as to
payment of dividends, in no event, so long as this Series shall remain
outstanding, shall any dividend whatsoever be declared or paid upon, nor
shall any distribution be made or ordered in respect of, any class of stock
of the Company ranking on a parity with or junior to this Series with
respect to payment of dividends, unless dividends on this Series since the
date of issue thereof to the date of such distribution shall have been paid
or declared and set apart for payment.  When dividends are not paid in full
upon the shares of this Series and any other preferred stock ranking on a
parity as to payment of dividends with this Series, all dividends declared
upon shares of this Series and any other preferred stock ranking on a parity
as to dividends with this Series shall be declared pro rata so that the
amount of dividends declared per share on this Series and such other
preferred stock shall in all cases bear to each other the same ratio that
accrued dividends per share on the shares of this Series and such other
preferred stock bear to each other.  If full cumulative dividends on this
Series have not been declared and paid or set apart for payment, the Company
shall not declare or pay or set apart for payment any dividends or make any
other distributions on, or make any payment on account of the purchase,
redemption or retirement of, the Common Stock, $.01 par value, of the
Company ("Common Stock"), or any other stock of the Company ranking junior
to this Series as to dividends or distribution of assets on liquidation,
dissolution or winding up of the Company (other than, in the case of
dividends or distributions, dividends or distributions paid in shares of
Common Stock or such other junior ranking stock), until full cumulative
dividends on this Series are declared and paid or set apart for payment.

     1.3  Conversion.  The holders of shares of this Series shall have the
right, at their option, to convert all or any part of such shares of this
Series into shares of Common Stock of the Company at any time after October
8, 1998 and subject to the following terms and conditions:

          (a)  The shares of this Series shall be convertible at the office
     of any transfer agent for such stock, and at such other place or places,

<PAGE> 39

     if any, as the Board of Directors of the Company may designate, into
     fully paid and nonassessable shares (calculated as to each conversion
     to the nearest 1/100th of a share) of Common Stock of the Company.  The
     number of shares of Common Stock issuable upon conversion of each share
     of this Series shall be equal to $10.00 divided by the conversion price
     in effect at the time of conversion, determined as hereinafter provided.
     The price at which shares of Common Stock shall be delivered upon
     conversion (herein called the "conversion price") shall be initially
     $6.40 per share of Common Stock.   The conversion price shall be subject
     to adjustment from time to time in certain instances as hereinafter
     provided.  If the Company calls for the redemption of any shares of
     this Series, such right of conversion shall cease and terminate, as to
     the shares designated for redemption, at the close of business on the
     redemption date, unless the Company defaults in the payment of the
     redemption price.  No fractional shares of Common Stock will be issued.
     A cash payment will be paid in lieu of any fractional share in an amount
     equal to the same fraction of the last sale price of the Common Stock
     (determined as provided in Section 1.3(c)(iv)) at the close of business
     on the business day which next precedes the day of conversion.

          (b)  Before any holder of shares of this Series shall be entitled
     to convert the same into Common Stock, he shall surrender the
     certificate or certificates therefor, duly endorsed or assigned to the
     Company or in blank, at the office of any transfer agent for such stock
     or at such other place or places, if any, as the Board of Directors of
     the Company may have designated, and shall give written notice to the
     Company at said office or place that he elects to convert the same and
     shall state in writing therein the name or names (with addresses) in
     which he wishes the certificate or certificates for Common Stock to be
     issued.  Shares of this Series surrendered for conversion during the
     period from the close of business on any record date for the payment of
     a dividend on the shares of this Series to the opening of business on
     the date for payment of such dividends shall (except in the case of
     shares of this Series which have been called for redemption on a
     redemption date within such period) be accompanied by payment of an
     amount equal to the dividend payable on such dividend payment date on
     the shares of this Series being surrendered for conversion.  Except as
     provided in the preceding sentence, no payment or adjustment shall be
     made upon any conversion on account of any dividend accrued on the
     shares of this Series surrendered for conversion or on account of any
     dividends on the Common Stock issued upon conversion.  The Company will,
     as soon as practicable thereafter, issue and deliver at said office or
     place to such holder of shares of this Series, or to his nominee or
     nominees, certificates for the number of full shares of Common Stock to
     which he shall be entitled as aforesaid, together with cash in lieu of
     any fraction of a share. Shares of this Series shall be deemed to have
     been converted as of the close of business on the date of surrender of
     such shares for conversion as provided above, and the person or persons

<PAGE> 40

     entitled to receive the Common Stock issuable upon such conversion
     shall be treated for all purposes as the record holder or holders of
     such Common Stock as of the close of business on such date.

          (c)  The conversion price in effect at any time shall be subject to
     adjustment as follows:

               (i)    In case the Company shall (A) declare a dividend or
          make a distribution payable in Common Stock on any class of
          capital stock of the Company, unless the payment thereof would
          increase the number of shares of Common Stock outstanding by
          less than one percent (1%), (B) subdivide or reclassify its
          outstanding shares of Common Stock into a greater number of
          shares, or (C) combine its outstanding shares of Common Stock
          into a smaller number of shares, the conversion price in effect at
          the time of the record date for such dividend or distribution or the
          effective date of such subdivision, combination or reclassification
          shall be proportionately reduced in the case of any increase in the
          number of shares of Common Stock outstanding and increased in
          the case of any reduction in the number of shares of Common
          Stock outstanding so that the holder of any share of this Series
          surrendered for conversion after such time shall be entitled to
          receive the kind and amount of shares which he would have
          owned or have been entitled to receive had such share of this
          Series been converted into Common Stock immediately prior to
          such time and had such Common Stock received such dividend or
          other distribution or participated in such subdivision, combination
          or reclassification.  Such adjustment shall be effective as of the
          record date for such dividend or distribution or the effective date
          of such combination, subdivision or reclassification and shall be
          made successively whenever any event listed above shall occur.

               (ii)   In case the Company shall issue rights or warrants to
          all holders of its Common Stock entitling them to subscribe for or
          purchase shares of Common Stock at a price per share less than
          the Current Market Price (as defined in paragraph (iv) below) of the
          Common Stock, on the date fixed for the determination of
          stockholders entitled to receive such rights or warrants, the
          conversion price at the opening of business on the day following
          the date fixed for such determination shall be reduced by
          multiplying the conversion price by a fraction of which the
          numerator shall be the number of shares of Common Stock
          outstanding at the close of business on the date fixed for such
          determination plus the number of shares of Common Stock which

<PAGE> 41

          the aggregate of the offering price of the total number of shares
          of Common Stock so offered for subscription or purchase would
          purchase at such Current Market Price of the Common Stock and
          the denominator shall be the number of shares of common Stock
          outstanding at the close of business on the date fixed for such
          determination plus the number of shares of Common Stock so
          offered for subscription or purchase, such reduction to become
          effective immediately after the opening of business on the day
          following the date fixed for such determination. For purposes of
          determining under this paragraph the number of shares of Common
          Stock outstanding at any time, there shall be excluded all shares
          of Common Stock held in the treasury of the Company.  If any or
          all such rights or warrants are not so issued or expire or terminate
          before being exercised, the conversion price then in effect shall be
          appropriately readjusted.

               (iii)  In case the Company shall distribute to all holders of
          its Common Stock evidences of its indebtedness or assets
          (including securities, but excluding cash dividends or a distribution
          referred to in paragraph (i) above or paid out of surplus) or
          subscription rights or warrants (excluding those referred to in
          paragraph (ii) above), the conversion price shall be adjusted so that
          it shall equal the price determined by multiplying the conversion
          price in effect immediately prior to the close of business on the
          date fixed for the determination of stockholders entitled to receive
          such distribution by a fraction of which the numerator shall be the
          Current Market Price per share of the Common Stock on the date
          fixed for such determination less the then fair market value (as
          determined by the Board of Directors of the Company, in good
          faith and in the exercise of its reasonable business judgment and
          described in a Board Resolution filed with any transfer agent for
          this Series) of the portion of the assets or evidences of
          indebtedness so distributed applicable to one share of Common
          Stock and the denominator shall be such Current Market Price per
          share of the Common Stock.  Such adjustment shall become
          effective immediately prior to the opening of business on the day
          following the date fixed for the determination of stockholders
          entitled to receive such distribution.

               (iv)   For the purpose of any computation under paragraphs
          (ii) and (iii) above, the "Current Market Price" per share of Common
          Stock on any date shall be deemed to be the average of the daily
          closing prices per share of Common Stock for 15 consecutive

<PAGE> 42

          business days selected by the Company commencing no more
          than 45 business days before such date.  The closing price for
          each day shall be the last reported sales price regular way or, in
          case no such sale takes place on such day, the average of the
          closing bid and asked prices regular way, in either case on the
          Nasdaq National Market System or, if the Common Stock is not
          listed or admitted to trading on such Nasdaq National Market
          System on the principal national securities exchange on which the
          Common Stock is listed or admitted to trading, or if it is not listed
          or admitted to trading on any national securities exchange or no
          such quotations are available, the average of the closing bid and
          asked prices as furnished by any member of the National
          Association of Securities Dealers, Inc. selected from time to time
          by the Company for that purpose, or if no such quotations are
          available, the fair market value as determined in good faith in the
          exercise of their reasonable business judgment by the Board of
          Directors of the Company.

               (v)    All calculations under this Section 1.3(c) shall be
          made to the nearest cent or to the nearest one-hundredth of a
          share, as the case may be.

               (vi)   No adjustment in the conversion price shall be
          required unless such adjustment would require a change of at least
          1% in such price; provided, however, that any adjustments which
          by reason of this paragraph (vi) are not required to be made shall
          be carried forward and taken into account in any subsequent
          adjustment.

          (d)  Whenever the conversion price is adjusted as herein provided:

               (i)    the Company shall promptly file with any of the
          transfer agents for this Series a certificate of the principal
          financial officer of the Company setting forth the adjusted conversion
          price and showing in reasonable detail the facts upon which such
          adjustment is based, including a statement of the consideration
          received or to be received by the Company for any shares of
          Common Stock issued or deemed to have been issued; and 

               (ii)   a notice stating that the conversion price has been
          adjusted and setting forth the adjusted conversion price shall
          forthwith be required, and as soon as practicable after it is
          required, such notice shall be mailed by the Company to the
          holders of record of this Series.

<PAGE> 43

          (e)

               (i)    In case of any consolidation or merger of the
          Company with or into any other person (other than a merger which
          does not result in any reclassification, conversion, exchange or
          cancellation of the Common Stock), or in case of any sale or
          transfer of all or substantially all of the assets of the Company, or
          the reclassification of the Common Stock into another form of
          capital stock of the Company, whether in whole or in part, the
          holder of each share of this Series shall have the right to receive
          the kind and amount of securities, cash or property, or any
          combination thereof which such holder would have been entitled
          to receive upon such consolidation, merger, sale or transfer or
          reclassification if he had held the Common Stock issuable upon the
          conversion of such share of this Series immediately prior to such
          consolidation, merger, sale or transfer, or reclassification.

               (ii)   In the event that at any time, as a result of paragraph
          (i) above, the holder of any share of this Series shall become
          entitled to receive any shares of stock and other securities and
          property (including, if applicable, Common Stock), thereafter the
          amount of such shares of stock and other securities so receivable
          upon conversion of any share of this Series shall be subject to
          adjustment from time to time in a manner and on terms as nearly
          equivalent as practicable to the provisions with respect to the
          Common Stock contained in paragraphs (i) to (vi), inclusive, of
          section 1.3(c) above, and the provisions of section 1.3(c) with
          respect to the Common Stock shall apply on like terms to any such
          shares of stock and other securities and property (including, if
          applicable, Common Stock).

          (f)  In case:

               (i)    the Company shall authorize the distribution to all
          holders of its Common Stock of evidences of its indebtedness or
          assets (other than cash dividends or other cash distributions paid
          out of surplus); or 

               (ii)   the Company shall authorize the granting to the
          holders of its Common Stock of rights or warrants to subscribe for
          or purchase any shares of capital stock of any class or of any
          other rights; or

<PAGE> 44

               (iii)  of any reclassification of the capital stock of the
          Company (other than a subdivision or combination of its
          outstanding shares of Common Stock), or of any consolidation or
          merger, or of the sale or transfer of all or substantially all of the
          assets of the Company; or

               (iv)   of the voluntary or involuntary dissolution, liquidation
          or winding up of the Company;

     then, in each case, the Company shall cause to be filed with any of the
     transfer agents for this Series, and shall cause to be mailed, first
     class postage prepaid, to the holders of record of the outstanding
     shares of this Series, at least 20 days prior to the applicable record
     date hereinafter specified, a notice stating (x) the date on which a
     record is to be taken for the purpose of such dividend, distribution,
     rights or warrants, or, if a record is not to be taken, the date as of
     which the holders of Common Stock of record to be entitled to such
     dividend, distribution, rights or warrants are to be determined, or
     (y) the date on which such reclassification, consolidation, merger,
     sale, transfer, dissolution, liquidation or winding up is expected to
     become effective, and the date as of which it is expected that holders
     of Common Stock of record shall be entitled to exchange their Common
     Stock for securities or other property deliverable upon such
     reclassification, consolidation, merger, sale, transfer, dissolution,
     liquidation or winding up.

          (g)  The Company shall at all times reserve and keep available,
     free from preemptive rights, out of its authorized but unissued Common
     Stock, solely for the purpose of effecting the conversion of the shares
     of this Series, the full number of shares of Common Stock then issuable
     upon the conversion of all outstanding shares of this Series.  For the
     purpose of this section 1.3(g), the full number of shares of Common
     Stock issuable upon the conversion of all outstanding shares of this
     Series shall be computed as if at the time of computation of such number
     of shares of Common Stock all outstanding shares of this Series were
     held by a single holder.  The Company shall from time to time, in
     accordance with the laws of the State of Delaware, increase the
     authorized amount of its Common Stock if at any time the authorized
     amount of its Common Stock remaining unissued shall not be sufficient
     to permit the conversion of all shares of this Series at the time
     outstanding.

          (h)  The Company will pay any and all taxes that may be payable in    
     respect of the issue or delivery of shares of Common Stock on conversion of
     shares of this Series pursuant hereto.  The Company shall not, however,
     be required to pay any tax which may be payable in respect of any
     transfer involved in the issue or transfer and delivery of shares of
     Common Stock in a name other than that in which the shares of this
     Series so converted were registered, and no such issue or delivery

<PAGE> 45

     shall be made unless and until the person requesting such issue has
     paid to the Company the amount of any such tax or has established to
     the satisfaction of the Company that such tax has been paid.

          (i)  Whenever reference is made in this section 1.3 to the issue or
     sale of shares of Common Stock, the term "Common Stock" shall include
     only shares of the class designated as Common Stock, $.01 par value, of
     the Company at the date hereof or shares of any class or classes
     resulting from any reclassification or reclassifications thereof and
     which have no preference in respect of dividends or of amounts payable
     in the event of any voluntary or involuntary liquidation, dissolution or
     winding up of the Company and which are not subject to redemption by the
     Company, provided that if at any time there shall be more than one such
     resulting class, the shares of each such class then so deliverable shall
     be substantially in the proportion which the total number of shares of
     such class resulting from all such reclassifications bears to the total
     number of shares of all such classes resulting from all such
     reclassifications.

     1.4  Liquidation Rights.  In the event of any liquidation, dissolution,
or winding up of the affairs of the Company, whether voluntary or otherwise,
after payment or provision for payment of the debts and other liabilities of
the Company, the holders of this Series shall be entitled to receive an
amount in cash for each share of this Series equal to $10.00 per share, plus
an amount equal to all dividends accumulated and unpaid on each such share up
to the date fixed for distribution, before any distributions shall be made to
the holders of the Common Stock and of any other capital stock of the Company
ranking junior to this Series upon the liquidation, dissolution or winding up
of the Company.  If upon any liquidation, dissolution or winding up of the
Company, the assets distributable among the holders of this Series shall be
insufficient to permit the payment in full to the holders of all the then
outstanding shares of this Series and all holders of preferred stock ranking
on a parity with this Series with respect to the payment upon liquidation,
dissolution and winding up of the Company of all preferential amounts payable
to all such holders, then the entire assets of the Company thus distributable
shall be distributed ratably among the holders of this Series and all such
other holders of Preferred Stock in proportion to the respective amounts that
would be payable per share if such assets were sufficient to permit payment
in full.  Subject to the provisions of section 1.3(e)(i), a consolidation or
merger of the Company with or into one or more persons or the sale or
transfer of all or substantially all of the assets of the Company shall not
be deemed to be a liquidation, dissolution or winding up of the Company.


<PAGE> 46

     1.5  Optional Cash Redemption.  The shares of this Series are not
redeemable prior to April 1, 1999.  Thereafter, the shares of this Series
are redeemable for cash, in whole at any time or from time to time in part at
the option of the Company, at a redemption price of $10.00 per share, plus
any accumulated and unpaid dividends thereon.

     Notice of redemption pursuant to this Section 1.5 will be mailed at
least 30 days but not more than 60 days before the redemption date to each
holder of record of shares of this Series to be redeemed at the address
shown on the stock books of the Company (but no failure to mail such notice
or any defect therein or in the mailing thereof shall affect the validity of
the proceedings for such redemption except as to the holder to whom the
Company has failed to mail such notice or except as to the holder whose
notice was defective).  On and after the redemption date, dividends shall
cease to accumulate on shares of this Series called for redemption (unless
the Company defaults in the payment of the redemption price).

     If less than all the outstanding shares of this Series not previously
called for redemption are to be redeemed pursuant to this Section 1.5, shares
to be redeemed shall be selected by the Company from outstanding shares not
previously called for redemption by lot or pro rata (as nearly as may be) as
determined by the Board of Directors of the Company.  The Company may not
redeem less than all outstanding shares of this Series pursuant to this
Section 1.5 unless full cumulative dividends shall have been declared and
paid or set apart for payment upon all outstanding shares of this Series for
all past dividend periods.  Shares of this Series redeemed by the Company
will be restored to the status of authorized but unissued shares of
preferred stock, without designation as to series, and may thereafter be
issued, but not as shares of this Series.

     1.6  Voting Rights.  The holders of shares of this Series shall have no
right to vote for any purpose, except as specifically required by the laws of
the State of Delaware and except as follows:

          So long as any shares of this Series remain outstanding, the
     affirmative vote or consent of the holders of a majority of the then
     outstanding shares of this Series, in person or by proxy, either in writing
     or at a meeting called for that purpose (voting as a class with the holders
     of all other series of preferred stock ranking on a parity with this Series
     either as to dividends or distributions or upon liquidation, dissolution or
     winding up of the Company and upon which like voting rights have been
     conferred and are then exercisable), shall be necessary to permit, effect
     or validate the repeal, amendment or other change of any provision of the
     Certificate of Incorporation of the Company in any manner which
     materially and adversely affects the rights, preferences, or privileges of
     this Series or the holders thereof; provided, however, the creation and

<PAGE> 47

     issuance of other series of preferred stock, whether ranking on a parity
     with or junior or prior to this Series with respect to voting, the payment
     of dividends or the distribution of assets upon liquidation, dissolution or
     winding up shall not be deemed to materially and adversely affect such
     rights, preferences or privileges.  In connection with any right to vote,
     each holder of outstanding shares of this Series shall have one vote for
     each share held.

     The foregoing voting provisions will not apply if, at or prior to the time
when the act with respect to which such vote would otherwise be required
shall be effected, all outstanding shares of this Series shall have been
redeemed or sufficient funds shall have been deposited in trust to effect
such redemption.

     IN WITNESS WHEREOF, this Certificate has been executed and attested by
the undersigned on April 7, 1998, and shall be effective at 10:00 a.m.
Eastern Daylight Time, on April 8, 1998, or the date on which filed with the
Secretary of State of the State of Delaware, whichever is later.


                                         PARALLEL  PETROLEUM  CORPORATION





                                         By: /S/ Larry C. Oldham
                                         -------------------------------
                                         Larry C. Oldham, President

ATTEST:

/S/ Thomas W. Ortloff
----------------------------
Thomas W. Ortloff, Secretary

<PAGE> 47

                           CERTIFICATE OF AMENDMENT
                                    TO THE
                         CERTIFICATE OF INCORPORATION 
                                      OF
                        PARALLEL PETROLEUM CORPORATION


     Parallel Petroleum Corporation, a corporation organized and existing
under the General Corporation Law of the State of Delaware (the "Corporation"),
does hereby certify as follows:

     Pursuant to the provisions of the Delaware General Corporation Law, the
Board of Directors and the stockholders of the Corporation adopted an
amendment to the Certificate of Incorporation of the Corporation, which is
set forth in the following resolution in accordance with Section 242 of the
Delaware General Corporation Law, the purpose of which amendment is to
decrease the number of authorized shares of Common Stock and Preferred Stock:

     "RESOLVED, That the first paragraph of Article Fourth of the Company's
     Certificate of Incorporation be amended as follows:

          FOURTH:  The total number of shares of all classes that the
          Corporation shall have authority to issue is 70,000,000, of
          which 10,000,000 shall be Preferred Shares, par value $.10
          per share, and 60,000,000 shall be Common Shares, $.01
          par value per share.

     Except as specifically amended hereby, all other provisions of Article
Fourth shall remain in full force and effect.

     IN WITNESS WHEREOF, Parallel Petroleum Corporation has caused this
Certificate of Amendment to be signed by Larry C. Oldham, its President,
and attested by Rebecca A. Burrell, its Assistant Secretary, this 15th day
of June, 1998.

                                          PARALLEL PETROLEUM CORPORATION


                                          By:/S/ Larry C. Oldham
                                          ------------------------------    
                                           Larry C. Oldham, President
ATTESTED:


/S/ Rebecca A. Burrell
---------------------------------------
Rebecca A. Burrell, Assistant Secretary

<PAGE> 48

     The undersigned President of Parallel Petroleum Corporation, being duly
sworn, does verify that the foregoing instrument represents the act and deed
of Parallel Petroleum Corporation and that the facts stated in such
instrument are true.


                                          /S/ Larry C. Oldham
                                          ------------------------------  
                                          Larry C. Oldham, President


STATE OF TEXAS      

COUNTY OF MIDLAND

     Before me, the undersigned authority, on this day personally appeared
Larry C. Oldham and Rebecca A. Burrell, President and Assistant Secretary,
respectively, of Parallel Petroleum Corporation, a corporation formed under
the laws of the State of Delaware, known to me to be the individuals whose
names are subscribed to the foregoing instrument, and acknowledged and swore
to me that they each executed the same for the purposes and consideration
therein expressed and as the act and deed of said corporation and that the
facts stated in the foregoing instrument are true.

     GIVEN UNDER MY HAND AND SEAL OF OFFICE this 15th day of June, 1998.


                                          /S/ Diane DePrang Hurst
                                         -------------------------------
                                         Notary Public in and for
                                           the State of Texas