##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D. C. 20549
 FORM 10-Q
 (Mark One)
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For the quarterly period ended March 31, 2009 or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the Transition period from  to
 Commission File Number 000-13305
 PARALLEL PETROLEUM CORPORATION
  Delaware
    
    75-1971716(State of other jurisdiction of
    
    (I.R.S. Employer Identification No.)incorporation or organization)1004 N. Big Spring, Suite 400,Midland, Texas
    
    79701(Address of Principal Executive Offices)
    
    (Zip Code)
  (Registrants telephone number, including area code)
  (Former name, former address and former fiscal year, if changed since last report)
  þ o
  o o
  Large accelerated filer þ
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 o þ
 
 o o




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##### 



Page No.PART I.  FINANCIAL INFORMATIONITEM 1. FINANCIAL STATEMENTSReference is made to the succeeding pages for the following financial statements:- Unaudited Balance Sheets at March 31, 2009 and December 31, 2008
    
    
    1- Unaudited Statements of Operations for the three months ended March 31, 2009 and 2008
    
    
    3- Unaudited Statements of Stockholders Equity as of December 31, 2008
and for the three months ended March 31, 2009
    
    
    4- Unaudited Statements of Cash Flows for the three months ended March 31, 2009 and 2008
    
    
    5- Notes to Financial Statements
    
    
    7ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
    
    
    24ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    
    
    45ITEM 4. CONTROLS AND PROCEDURES
    
    
    49PART II.  OTHER INFORMATIONITEM 1. LEGAL PROCEEDINGS
    
    
    49ITEM 1A. RISK FACTORS
    
    
    50ITEM 5. OTHER INFORMATION
    
    
    55ITEM 6. EXHIBITS
    
    
    55SIGNATURESEX-31.1EX-31.2EX-32.1EX-32.2
  (i)




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PART 1 FINANCIAL INFORMATION
 
 ITEM 1. FINANCIAL STATEMENTS
 
 PARALLEL PETROLEUM CORPORATION
Balance Sheets  (unaudited)
($ in thousands)
 Assets
 March 31,
    
    
    December 31,2009
    
    
    2008Current assets:Cash and cash equivalents
    
    $
    21,605
    
    
    $
    36,303Short-term investments
    
    
    9,999
    
    
    
    5,002Accounts receivable:Oil and natural gas sales
    
    
    10,381
    
    
    
    13,399Joint interest owners and other, net of allowance for doubtful account of $50
    
    
    3,494
    
    
    
    2,805Affiliates and joint ventures
    
    
    22
    
    
    
    1213,897
    
    
    
    16,216Other current assets
    
    
    248
    
    
    
    430Derivatives
    
    
    22,204
    
    
    
    22,665Total current assets
    
    
    67,953
    
    
    
    80,616Property and equipment, at cost:Oil and natural gas properties, full cost method (including $137,027 and
$137,202 not
subject to depletion)
    
    
    887,021
    
    
    
    878,722Other
    
    
    3,304
    
    
    
    3,172890,325
    
    
    
    881,894Less accumulated depreciation, depletion and amortization
    
    
    (527,773
    )
    
    
    (490,566
    )Net property and equipment
    
    
    362,552
    
    
    
    391,328Restricted cash
    
    
    82
    
    
    
    81Investment in pipelines and gathering system ventures
    
    
    344
    
    
    
    337Other assets, net of accumulated amortization of $1,592 and $1,443
    
    
    3,533
    
    
    
    3,566Deferred tax asset
    
    
    71,510
    
    
    
    60,567Derivatives
    
    
    12,573
    
    
    
    14,081$
    518,547
    
    
    $
    550,576
  (1)




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PARALLEL PETROLEUM CORPORATION
Balance Sheets (continued)  (unaudited)
($ in thousands)
 Liabilities and Stockholders Equity
 March 31,
    
    
    December 31,2009
    
    
    2008Current liabilities:Accounts payable trade
    
    $
    10,529
    
    
    $
    13,522Accrued liabilities
    
    
    16,444
    
    
    
    21,780Accrued interest on senior notes
    
    
    2,563
    
    
    
    6,407Asset retirement obligations
    
    
    158
    
    
    
    158Derivative obligations
    
    
    3,148
    
    
    
    3,004Put premium obligations
    
    
    778
    
    
    
    628Deferred tax liability
    
    
    6,336
    
    
    
    6,597Total current liabilities
    
    
    39,956
    
    
    
    52,096Long-term liabilities:Revolving credit facility
    
    
    225,000
    
    
    
    225,000Senior notes (principal amount $150,000)
    
    
    146,026
    
    
    
    145,890Asset retirement obligations
    
    
    11,271
    
    
    
    11,221Derivative obligations
    
    
    5,055
    
    
    
    5,136Put premium obligations
    
    
    3,399
    
    
    
    3,655Termination obligation
    
    
    609
    
    
    
    532Total long-term liabilities
    
    
    391,360
    
    
    
    391,434Commitments and contingenciesStockholders equity:Series A preferred stock  par value $0.10 per share, authorized 50,000 shares
    
    
    
    
    
    
    Common stock  par value $0.01 per share, authorized 60,000,000 shares,
issued and outstanding 41,597,161 for 2009 and 2008
    
    
    415
    
    
    
    415Additional paid-in capital
    
    
    200,678
    
    
    
    200,132Retained deficit
    
    
    (113,862
    )
    
    
    (93,501
    )Total stockholders equity
    
    
    87,231
    
    
    
    107,046$
    518,547
    
    
    $
    550,576
  (2)




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PARALLEL PETROLEUM CORPORATION
Statements of Operations  (unaudited)
(in thousands, except per share data)
 Three Months EndedMarch 31,2009
    
    
    2008Oil and natural gas revenues:Oil and natural gas sales
    
    $
    18,229
    
    
    $
    43,941Costs and expenses:Lease operating expense
    
    
    8,086
    
    
    
    6,979Production taxes
    
    
    573
    
    
    
    2,289General and administrative
    
    
    3,433
    
    
    
    2,568Depreciation, depletion and amortization
    
    
    6,781
    
    
    
    9,352Impairment of oil and natural gas properties
    
    
    30,426
    
    
    
    Total costs and expenses
    
    
    49,299
    
    
    
    21,188Operating income (loss)
    
    
    (31,070
    )
    
    
    22,753Other income (expense), net:Gain (loss) on derivatives not classified as hedges
    
    
    5,765
    
    
    
    (21,886
    )Interest and other income
    
    
    69
    
    
    
    33Interest expense, net of capitalized interest
    
    
    (6,330
    )
    
    
    (5,518
    )Equity in gain of pipelines and gathering system ventures
    
    
    1
    
    
    
    217Total other income (expense), net
    
    
    (495
    )
    
    
    (27,154
    )Loss before income taxes
    
    
    (31,565
    )
    
    
    (4,401
    )Income tax benefit
    
    
    11,204
    
    
    
    1,661Net loss
    
    $
    (20,361
    )
    
    $
    (2,740
    )Net loss per common share:Basic
    
    $
    (0.49
    )
    
    $
    (0.07
    )Diluted
    
    $
    (0.49
    )
    
    $
    (0.07
    )Weighted average common shares outstanding:Basic
    
    
    41,597
    
    
    
    41,273Diluted
    
    
    41,597
    
    
    
    41,273
  (3)




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PARALLEL PETROLEUM CORPORATION
Statements of Stockholders Equity
As of December 31, 2008 and for the three months ended March 31, 2009  (unaudited)
(in thousands)
 Common stock
    
    
    Additional
    
    
    
    
    
    
    TotalNumber of
    
    
    
    
    
    
    paid-in
    
    
    Retained
    
    
    stockholdersshares
    
    
    Amount
    
    
    capital
    
    
    deficit
    
    
    equityBalance, December 31, 2008
    
    
    41,597
    
    
    $
    415
    
    
    $
    200,132
    
    
    $
    (93,501
    )
    
    $
    107,046Restricted stock expense
    
    
    
    
    
    
    
    
    
    
    24
    
    
    
    
    
    
    
    24Stock option expense
    
    
    
    
    
    
    
    
    
    
    522
    
    
    
    
    
    
    
    522Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (20,361
    )
    
    
    (20,361
    )Balance, March 31, 2009
    
    
    41,597
    
    
    $
    415
    
    
    $
    200,678
    
    
    $
    (113,862
    )
    
    $
    87,231
  (4)




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PARALLEL PETROLEUM CORPORATION
Statements of Cash Flows
Three Months Ended March 31, 2009 and 2008  (unaudited)
($ in thousands)
 2009
    
    
    2008Cash flows from operating activities:Net loss
    
    $
    (20,361
    )
    
    $
    (2,740
    )Adjustments to reconcile net loss to net cash
provided by operating activities:Depreciation, depletion and amortization
    
    
    6,781
    
    
    
    9,352Impairment of oil and natural gas properties
    
    
    30,426
    
    
    
    Accretion of asset retirement obligation
    
    
    210
    
    
    
    83Accretion of senior notes discount
    
    
    136
    
    
    
    122Deferred income tax benefit
    
    
    (11,204
    )
    
    
    (1,661
    )(Gain) loss on derivatives not classified as hedges
    
    
    (5,765
    )
    
    
    21,886Amortization of deferred financing cost
    
    
    149
    
    
    
    159Accretion of interest on put obligations
    
    
    44
    
    
    
    Restricted stock expense
    
    
    24
    
    
    
    Stock option expense
    
    
    522
    
    
    
    82Equity in gain of pipelines and gathering system ventures
    
    
    (1
    )
    
    
    (217
    )Changes in assets and liabilities:Other assets, net
    
    
    459
    
    
    
    (43
    )Restricted cash
    
    
    (1
    )
    
    
    (1
    )Accounts receivable
    
    
    2,319
    
    
    
    (7,972
    )Other current assets
    
    
    182
    
    
    
    282Accounts payable and accrued liabilities
    
    
    (6,773
    )
    
    
    5,194Net cash (used in) provided by operating activities
    
    
    (2,853
    )
    
    
    24,526Cash flows from investing activities:Additions to oil and natural gas properties
    
    
    (13,782
    )
    
    
    (38,718
    )Proceeds from disposition of oil and natural gas properties
and other property and equipment
    
    
    
    
    
    
    100Additions to other property and equipment
    
    
    (132
    )
    
    
    (134
    )Settlements on derivative instruments
    
    
    6,273
    
    
    
    (8,282
    )Short-term investments
    
    
    (4,997
    )
    
    
    Net investment in pipelines and gathering system ventures
    
    
    (6
    )
    
    
    154Net cash used in investing activities
    
    
    (12,644
    )
    
    
    (46,880
    )Cash flows from financing activities:Borrowings from bank line of credit
    
    
    
    
    
    
    22,000Deferred financing cost
    
    
    (575
    )
    
    
    Proceeds from exercise of stock options and warrants
    
    
    
    
    
    
    295Settlements on derivative instruments with financing elements
    
    
    1,374
    
    
    
    Net cash provided by financing activities
    
    
    799
    
    
    
    22,295Net decrease in cash and cash equivalents
    
    
    (14,698
    )
    
    
    (59
    )Cash and cash equivalents at beginning of period
    
    
    36,303
    
    
    
    7,816Cash and cash equivalents at end of period
    
    $
    21,605
    
    
    $
    7,757
  (5)




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PARALLEL PETROLEUM CORPORATION
Statements of Cash Flows (continued) 
Three Months Ended March 31, 2009 and 2008  (unaudited) ($ in thousands)
 2009
    
    
    2008Non-cash financing and investing activities:Oil and natural gas properties asset retirement obligations
    
    $
    (160
    )
    
    $
    782Additions to oil and natural gas properties accrued
    
    $
    (5,400
    )
    
    $
    1,000Termination obligation capitalized to oil and natural gas properties
    
    $
    77
    
    
    $
    Other transactions:Interest paid
    
    $
    10,367
    
    
    $
    9,076
  (6)




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NOTES TO FINANCIAL STATEMENTS
 NOTE 1. DESCRIPTION OF BUSINESS  NATURE OF OPERATIONS AND BASIS OF PRESENTATION
   
    
    Permian Basin of west Texas and New Mexico; and
    
    Fort Worth Basin of north Texas.
  Form 10-Q
  NOTE 2. STOCKHOLDERS EQUITY
 Share-Based Payment
  Options
  (7)




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WeightedAverageNumber of Shares of
    
    
    Weighted
    
    
    RemainingCommon Stock
    
    
    Average Exercise
    
    
    Contractual
    
    
    AggregateUnderlying Options
    
    
    Price
    
    
    Term
    
    
    Intrinsic Value(in thousands)
    
    
    
    
    
    
    (years)
    
    
    ($ in thousands)Outstanding December 31, 2008
    
    
    739
    
    
    $
    14.41Granted
    
    
    
    
    
    $
    Exercised
    
    
    
    
    
    $
    Surrendered
    
    
    
    
    
    $
    Outstanding March 31, 2009
    
    
    739
    
    
    $
    14.41
    
    
    
    8.5
    
    
    $
    Exercisable at March 31, 2009
    
    
    309
    
    
    $
    7.68
    
    
    
    4.4
    
    
    $
    
 Restricted Stock
  NOTE 3. CREDIT ARRANGEMENTS
  Revolving Credit Facility
     (8)




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(9)




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##### Table of Contents



Senior Notes
    Interest Incurred
  NOTE 4. OIL AND NATURAL GAS PROPERTIES
  
    
    all wells drilled from November 1, 2008 through December 31, 2009, and all
wells drilled during each succeeding calendar year through 2016 will be treated as a
separate project or payout period, creating eight separate projects or payout periods;
    
    at the time Chesapeake commences the drilling of a well during one of the
payout periods, we will assign to Chesapeake 100% of our leasehold interest within the
subject unit or lease, reserving and retaining a 50% reversionary interest that will
vest after Chesapeake recovers 150% of its costs for a particular payout period. Until
150% payout has been reached, Chesapeake will fund 100% of our costs for drilling,
completing and operating wells during
 (10)




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the payout period;
    
    on each project, Chesapeake is entitled to receive all revenues from our
reversionary interest until Chesapeake receives revenues totaling 150% of the drilling,
completion and operating costs Chesapeake incurs in funding our reversionary interest;
    
    upon reaching the 150% payout level for a given project, 50% of the interest
assigned to Chesapeake will revert back to us;
    
    after 150% project payout, we will pay all costs and receive all revenues
attributable to our 50% reversionary interest in each project;
    
    for wells drilled after January 1, 2017, we will pay all costs and receive all
revenues attributable to our 50% reversionary interest; and
    
    we retained all of our interest in wells commenced prior to November 1, 2008,
except for 3 wells commenced in late October 2008. We also retained all of our interest
in approximately 90 gross (22.4 net) producing wells and 31 gross (9.49 net) wells in
progress.
   .
   (11)




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2009
    
    
    2008($ in thousands)Proved properties
    
    $
    749,994
    
    
    $
    741,520Unproved properties, not subject to depletion
    
    
    137,027
    
    
    
    137,202887,021
    
    
    
    878,722Accumulated depletion (1)
    
    
    (525,286
    )
    
    
    (488,168
    )$
    361,735
    
    
    $
    390,554
 
 (1)
    
    Includes $30.4 million and $300.5 million impairment of oil and natural
gas properties for the periods ending March 31, 2009 and December 31, 2008. NOTE 5. OTHER ASSETS
  March 31,
    
    
    December 31,2009
    
    
    2008($ in thousands)Revolving credit facility deferred financing costs, net
    
    $
    1,796
    
    
    $
    1,306Senior notes deferred financing costs, net
    
    
    1,367
    
    
    
    1,432Other
    
    
    370
    
    
    
    828$
    3,533
    
    
    $
    3,566
 NOTE 6. OTHER ACCRUED LIABILITIES
  March 31,
    
    
    December 31,2009
    
    
    2008($ in thousands)Revenue payable to joint interest and royalty owners
    
    $
    6,879
    
    
    $
    8,004Accrued capital expenditures
    
    
    3,622
    
    
    
    9,275Accrued lease operating expense
    
    
    2,161
    
    
    
    2,223Other
    
    
    3,782
    
    
    
    2,278$
    16,444
    
    
    $
    21,780
 (12)




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NOTE 7. ASSET RETIREMENT OBLIGATIONS
  Three Months EndedM arch 31,2009
    
    
    2008($ in thousands)Beginning asset retirement obligation
    
    $
    11,379
    
    
    $
    4,937Additions related to new properties
    
    
    115
    
    
    
    152Revisions in estimated cash flows
    
    
    (72
    )
    
    
    642Deletions related to property disposals
    
    
    (203
    )
    
    
    (12
    )Accretion expense
    
    
    210
    
    
    
    83Ending asset retirement obligation
    
    $
    11,429
    
    
    $
    5,802
  NOTE 8. DERIVATIVE INSTRUMENTS
 General
     Adoption of SFAS No. 161
 Disclosures about Derivative Instruments and Hedging Activities  an
amendment of FASB Statement No. 133
 (13)




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##### Table of Contents



As ofMarch 31, 2009
    
    
    December 31, 2008($ in thousands)Derivative AssetGas swaps
    
    $
    362
    
    
    $
    Gas collars
    
    
    8,755
    
    
    
    6,611Oil collars
    
    
    10,500
    
    
    
    13,480Oil puts
    
    
    15,160
    
    
    
    16,655Derviative ObligationInterest rate swaps
    
    
    (7,835
    )
    
    
    (8,051
    )Gas collars
    
    
    (337
    )
    
    
    Oil collars
    
    
    (31
    )
    
    
    (89
    )Net derivative asset
    
    $
    26,574
    
    
    $
    28,606
 (1)
 For the three months endedMarch 31, 2009
    
    
    March 31, 2008($ in thousands)Interest rate swaps
    
    $
    (480
    )
    
    $
    (2,102
    )Gas collars
    
    
    4,522
    
    
    
    (4,565
    )Gas swaps
    
    
    362
    
    
    
    Oil swaps
    
    
    
    
    
    
    (3,039
    )Oil collars
    
    
    1,331
    
    
    
    (12,180
    )Oil puts
    
    
    30
    
    
    
    Total gain (loss) on derivatives
    
    $
    5,765
    
    
    $
    (21,886
    )
 
 (1)
    
    All changes in the mark-to-market valuation of our derivatives are recorded on the
Statement of Operations under the line item Gain (loss) on derivatives not classified as
hedges. Adoption of SFAS No. 157
 Fair Value Measurements
 (14)




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##### Table of Contents



Level 1:
    
    Unadjusted quoted prices in active markets that are accessible at the
measurement date for identical, unrestricted assets or liabilities. We
consider active markets as those in which transactions for the assets or
liabilities occur in sufficient frequency and volume to provide pricing
information on an ongoing basis.Level 2:
    
    Quoted prices in markets that are not active, or inputs which are
observable, either directly or indirectly, for substantially the full term
of the asset or liability. This category includes those derivative
instruments that are valued using observable market data. Substantially all
of these inputs are observable in the marketplace throughout the full term
of the derivative instrument, can be derived from observable data, or
supported by observable levels at which transactions are executed in the
marketplace. Instruments in this category include non-exchange traded
derivatives such as over-the-counter commodity price swaps and interest rate
swaps.Level 3:
    
    Measured based on prices or valuation models that require inputs
that are both significant to the fair value measurement and less observable
from objective sources (i.e., supported by little or no market activity). Our
valuation models are primarily industry-standard models that consider various
inputs including: (a) quoted forward prices for commodities, (b) time value,
(c) volatility factors and (d) current market and contractual prices for the
underlying instruments, as well as other relevant economic measures. Level 3
instruments primarily include derivative instruments, such as commodity price
collars and puts. These instruments are considered Level 3 because we do not
have sufficient corroborating market evidence for volatility to support
classifying these assets and liabilities as Level 2.
   Quoted Prices inActive Marketsfor Identical
    
    
    Other Observable
    
    
    Unobservable
    
    
    Fair Value atAssets (Level 1)
    
    
    Inputs (Level 2)
    
    
    Inputs (Level 3)
    
    
    March 31, 2009Interest swaps
    
    $
    
    
    
    $
    (7,835
    )
    
    $
    
    
    
    $
    (7,835
    )Gas swaps
    
    $
    
    
    
    $
    362
    
    
    $
    
    
    
    $
    362Oil puts
    
    $
    
    
    
    $
    
    
    
    $
    15,160
    
    
    $
    15,160Oil & gas collars
    
    $
    
    
    
    $
    
    
    
    $
    18,887
    
    
    $
    18,887$
    
    
    
    $
    (7,473
    )
    
    $
    34,047
    
    
    $
    26,574
 (15)




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Three Months EndedMarch 31, 2009Derivative
    
    
    DerivativeCollars
    
    
    PutsBeginning balance
    
    $
    20,002
    
    
    $
    16,656Total gains
    
    
    5,854
    
    
    
    30Settlements
    
    
    (6,969
    )
    
    
    (1,526
    ) (1)Transfers in and/or out of level 3
    
    
    
    
    
    
    Ending balance
    
    $
    18,887
    
    
    $
    15,160Change in unrealized losses included in earnings relating
to derivatives still held as of March 31, 2009(2)
    
    $
    (1,115
    )
    
    $
    (1,496
    )
 
 (1)
    
    Premiums of $150,000 were netted from the settlement receipts.(2)
    
    Gains and losses (realized and unrealized) included in earnings for the three
months ended March 31, 2009 are reported in gain (loss) on derivatives not
classified as hedges on the Statement of Operations.  Interest Rate Sensitivity
  (16)




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Notional
    
    
    Weighted Average
    
    EstimatedPeriod of Time
    
    Amounts
    
    
    Fixed Interest Rates
    
    Fair Market Value($ in millions)
    
    
    
    
    
    
    ($ in thousands)April 1, 2009 through December 31, 2009
    
    $
    100
    
    
    
    4.22
    %
    
    $
    (2,338
    )January 1, 2010 through October 31, 2010
    
    $
    100
    
    
    
    4.71
    %
    
    
    (2,738
    )November 1, 2010 through December 31, 2010
    
    $
    50
    
    
    
    4.26
    %
    
    
    (237
    )January 1, 2011 through December 31, 2011
    
    $
    100
    
    
    
    4.67
    %
    
    
    (2,522
    )Total Fair Market Value
    
    
    
    
    
    
    
    
    
    $
    (7,835
    )
 Commodity Price Sensitivity
  Put Options.
   EstimatedBarrels of
    
    
    
    
    
    
    Fair MarketPeriod of Time
    
    Oil
    
    
    Floor
    
    
    Value($ in thousands)April 1, 2009 through December 31, 2009
    
    
    82,500
    
    
    $
    100.00
    
    
    $
    3,727January 1, 2010 through December 31, 2010
    
    
    280,100
    
    
    $
    84.36
    
    
    
    6,256January 1, 2011 through December 31, 2011
    
    
    146,000
    
    
    $
    100.00
    
    
    
    5,177Total Fair Market Value
    
    
    
    
    
    
    
    
    
    $
    15,160
 Collars.
 (17)




---



##### Table of Contents



EstimatedBarrels of
    
    NYMEX Oil Prices
    
    Fair MarketPeriod of Time
    
    Oil
    
    Floor
    

Ceiling
    
    Value($ in thousands)April 1, 2009 thru December 31, 2009
    
    
    577,500
    
    
    $
    65.71
    
    
    $
    82.93
    
    
    $
    7,583January 1, 2010 thru October 31, 2010
    
    
    486,400
    
    
    $
    63.44
    
    
    $
    78.26
    
    
    
    2,886MMBtu of
    
    
    WAHA Gas PricesNatural Gas
    
    
    Floor
    
    

CeilingApril 1, 2009 through December 31, 2009
    
    
    2,475,000
    
    
    $
    7.06
    
    
    $
    9.93
    
    
    
    8,728January 1, 2010 through December 31, 2010
    
    
    3,650,000
    
    
    $
    4.75
    
    
    $
    5.90
    
    
    
    (310
    )Total Fair Market Value
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    18,887
 Commodity Swaps.
   EstimatedNumber of
    
    WAHA
    
    Fair MarketPeriod of Time
    
    MMBtu
    
    Swap Price
    
    Value($ in thousands)May 1, 2009 thru September 30, 2009
    
    
    765,000
    
    
    $
    3.91
    
    
    
    $362
 NOTE 9. NET LOSS PER COMMON SHARE
  (18)




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##### Table of Contents



Three Months EndedMarch 31,2009
    
    
    2008(in thousands,except per share data)Basic EPS Computation:Numerator-Net loss
    
    $
    (20,361
    )
    
    $
    (2,740
    )Denominator-Weighted average common shares outstanding
    
    
    41,597
    
    
    
    41,273Basic EPS:Net loss per share
    
    $
    (0.49
    )
    
    $
    (0.07
    )Diluted EPS Computation:Numerator-Net loss
    
    $
    (20,361
    )
    
    $
    (2,740
    )Denominator-Weighted average common shares outstanding
    
    
    41,597
    
    
    
    41,273Employee stock options
    
    
    
    
    
    
    Warrants
    
    
    
    
    
    
    Weighted average common shares for diluted
earnings per share assuming conversion
    
    
    41,597
    
    
    
    41,273Diluted EPS:Net loss per share
    
    $
    (0.49
    )
    
    $
    (0.07
    )
  NOTE 10. RECENTLY ANNOUNCED ACCOUNTING PRONOUNCEMENTS
 Business Combinations,
 Noncontrolling Interests in Consolidated
Financial Statementsan amendment of ARB No. 51,
 (19)




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##### Table of Contents



Effective Date of FASB Statement
No. 157
 Disclosures about Derivative Instruments and
Hedging Activities, an amendment of FASB Statement No. 133, Accounting for Derivative Instruments and Hedging Activities,
 The Hierarchy of Generally Accepted Accounting
Principles, The Meaning
of Present Fairly in Conformity With General Accepted Accounting Principles
 Modernization
of Oil and Gas Reporting. a b c
  (20)




---



##### Table of Contents



Determining the Fair Value of
a Financial Asset When the Volume and Level of Activity for the Asset or Liability Have
Significantly Decreased and Identifying Transactions That Are Not Orderly Fair Value Measurements Interim
Disclosures about Fair Value of Financial Instruments Accounting Changes and Error
Corrections
 Disclosures about Fair Value of Financial Instruments, Interim Financial Reporting, Determining Fair Value When the Volume and Level of
Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That
Are Not Orderly, Recognition and Presentation of
Other-Than-Temporary Impairments
 Accounting for Assets
Acquired and Liabilities Assumed in a Business Combination That Arise from Contingencies Business
Combinations
 (21)




---



##### Table of Contents



NOTE 11. COMMITMENTS AND CONTINGENCIES
  th
  (22)




---



##### Table of Contents



NOTE 12. SUBSEQUENT EVENTS
   
    
    5.00 to 1.00 during 2009;
    
    4.25 to 1.00 during 2010; or
    
    4.00 to 1.00 during 2011 and thereafter.
     
    
    one-half percent (0.50%) per annum whenever the borrowing base usage is equal
to or greater than 75%; or
    
    one-quarter percent (0.25%) per annum whenever the borrowing base usage is
equal to or greater 50% but less than 75%; or
 (23)




---



##### Table of Contents




    
    zero percent (0%) per annum whenever the borrowing base usage is less than 50%.
  
    
    three and one-quarter percent (3.25%) per annum whenever the borrowing base
usage is equal to or greater than 75%; or
    
    three percent (3.00%) per annum whenever the borrowing base usage is equal to
or greater than 50% but less than 75%; or
    
    two and three-quarters percent (2.75%) per annum whenever the borrowing base
usage is less than 50%.
  
 ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
  OVERVIEW
 Strategy
 2009 Priorities.
 
    
    maximize liquidity and financial flexibility;
    
    generate operating cash flow in excess of our capital investment budget (CAPEX);
    
    invest $29.1 million in CAPEX spending; and
    
    focus on operated properties.
  Conduct Exploitation Activities on Our Existing Assets.
 (24)




---



##### Table of Contents



Use of Horizontal Drilling and Fracture Stimulation Activities in Gas Resource Plays.
 Use of Advanced Technologies and Production Techniques.
 Acquire Long-Lived Properties with Enhancement Opportunities.
 Conduct Exploratory Activities.
  
    
    the prices we receive for the oil and natural gas we produce;
    
    sources and availability of funds to conduct operations and complete acquisitions;
    
    the results of reprocessing and reinterpreting our 3-D seismic data;
    
    the results of our drilling activities;
    
    the costs of obtaining high quality field services;
    
    our ability to find and consummate acquisition opportunities; and
 (25)




---



##### Table of Contents




    
    our ability to negotiate and enter into work to earn arrangements, joint ventures
or other similar arrangements on terms acceptable to us.
  Operating Performance
  
    
    seasonal demand;
    
    weather;
    
    hurricane conditions in the Gulf of Mexico;
    
    availability of pipeline transportation to end users;
    
    proximity of our wells to major transportation pipeline infrastructures; and
    
    to a lesser extent, world oil prices.
  
    
    production expenses;
    
    overhead requirements;
    
    costs of capital; and
    
    effects of derivative contracts.
  
    
    cash flow from operations;
    
    sales of our equity and debt securities;
    
    bank borrowings; and
    
    industry joint ventures.
  (26)




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##### Table of Contents



Results of Operations
  
    
    reserve base;
    
    sources of production;
    
    product mix (gas versus oil volumes); and
    
    the prices we receive for our oil and natural gas production.
  (27)




---



##### Table of Contents



Three Months Ended3/31/2009
    
    
    12/31/2008
    
    
    3/31/2008(in thousands, except per unit data)Production Volumes:Oil (Bbls)
    
    
    252
    
    
    
    269
    
    
    
    247Natural gas (Mcf)
    
    
    2,529
    
    
    
    2,606
    
    
    
    2,662BOE(1)
    
    
    674
    
    
    
    703
    
    
    
    691BOE per day
    
    
    7.5
    
    
    
    7.6
    
    
    
    7.6Sales Prices:Oil (per Bbl)
    
    $
    36.21
    
    
    $
    54.96
    
    
    $
    93.74Natural gas (per Mcf)
    
    $
    3.59
    
    
    $
    4.43
    
    
    $
    7.80BOE price
    
    $
    27.04
    
    
    $
    37.41
    
    
    $
    63.60Operating Revenues:Oil
    
    $
    9,147
    
    
    $
    14,756
    
    
    $
    23,169Natural gas
    
    
    9,082
    
    
    
    11,542
    
    
    
    20,772$
    18,229
    
    
    $
    26,298
    
    
    $
    43,941Operating Expenses:Lease operating expense
    
    $
    8,086
    
    
    $
    6,682
    
    
    $
    6,979Production taxes
    
    
    573
    
    
    
    1,014
    
    
    
    2,289Production tax refund
    
    
    
    
    
    
    (1,958
    )
    
    
    General and administrative
    
    
    3,433
    
    
    
    2,949
    
    
    
    2,568Depreciation, depletion and amortization
    
    
    6,781
    
    
    
    13,305
    
    
    
    9,352Impairment of oil and natural gas properties
    
    
    30,426
    
    
    
    300,532
    
    
    
    $
    49,299
    
    
    $
    322,524
    
    
    $
    21,188Operating income
    
    $
    (31,070
    )
    
    $
    (296,226
    )
    
    $
    22,753
 
 (1)
    
    A BOE means one barrel of oil equivalent using the ratio of six Mcf of gas to one barrel of
oil. RESULTS OF OPERATIONS
 For the Three Months Ended March 31, 2009 and 2008:
  Oil and Gas Revenues
 Revenues
    
    
    Production2009
    
    
    2008
    
    
    2009
    
    
    2008Oil (Bbls)
    
    
    50
    %
    
    
    53
    %
    
    
    37
    %
    
    
    36
    %Natural gas (Mcf)
    
    
    50
    %
    
    
    47
    %
    
    
    63
    %
    
    
    64
    %Total
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
 (28)




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##### Table of Contents



Three Months Ended March 31,
    
    
    Increase
    
    
    % Increase2009
    
    
    2008
    
    
    (Decrease)
    
    
    (Decrease)(in thousands except per unit data)Production Volumes:Oil (Bbls)
    
    
    252
    
    
    
    247
    
    
    
    5
    
    
    
    2
    %Natural gas (Mcf)
    
    
    2,529
    
    
    
    2,662
    
    
    
    (133
    )
    
    
    (5
    )%BOE (1)
    
    
    674
    
    
    
    691
    
    
    
    (17
    )
    
    
    (2
    )%BOE/Day
    
    
    7.5
    
    
    
    7.6
    
    
    
    (0.1
    )
    
    
    (1
    )%Sales
Price:Oil (per Bbl)
    
    $
    36.21
    
    
    $
    93.74
    
    
    $
    (57.53
    )
    
    
    (61
    )%Natural gas (per Mcf)
    
    $
    3.59
    
    
    $
    7.80
    
    
    $
    (4.21
    )
    
    
    (54
    )%BOE price
    
    $
    27.04
    
    
    $
    63.60
    
    
    $
    (36.56
    )
    
    
    (57
    )%Operating
Revenues:Oil
    
    $
    9,147
    
    
    $
    23,169
    
    
    $
    (14,022
    )
    
    
    (61
    )%Natural gas
    
    
    9,082
    
    
    
    20,772
    
    
    
    (11,690
    )
    
    
    (56
    )%Total
    
    $
    18,229
    
    
    $
    43,941
    
    
    $
    (25,712
    )
    
    
    (59
    )%
 
 (1)
    
    A BOE means one barrel of oil equivalent using the ratio of six Mcf of gas to
one barrel of oil. Oil revenues
  Natural gas revenues
  (29)




---



##### Table of Contents



Cost and Expenses
 Three months ended March 31,
    
    
    Increase
    
    
    % Increase2009
    
    
    2008
    
    
    (Decrease)
    
    
    (Decrease)($ in thousands)Lease operating expense
    
    $
    8,086
    
    
    $
    6,979
    
    
    $
    1,107
    
    
    
    16
    %Production taxes
    
    
    573
    
    
    
    2,289
    
    
    
    (1,716
    )
    
    
    (75
    )%General and administrative
    
    
    3,433
    
    
    
    2,568
    
    
    
    865
    
    
    
    34
    %Depreciation, depletion and amortization
    
    
    6,781
    
    
    
    9,352
    
    
    
    (2,571
    )
    
    
    (27
    )%Impairment of oil and natural gas properties
    
    
    30,426
    
    
    
    
    
    
    
    30,426
    
    
    
    N/ATotal
    
    $
    49,299
    
    
    $
    21,188
    
    
    $
    28,111
    
    
    
    133
    %
 Lease operating expense
  Production taxes
  General and administrative
  Depreciation, depletion and amortization
  (30)




---



##### Table of Contents



Impairment of oil and natural gas properties
  Other income (expense)
 Three months ended March 31,
    
    
    Increase
    
    
    % Increase2009
    
    
    2008
    
    
    (Decrease)
    
    
    (Decrease)($ in thousands)Gain (loss) on derivatives not classified as hedges
    
    $
    5,765
    
    
    $
    (21,886
    )
    
    $
    27,651
    
    
    
    126
    %Interest and other income
    
    
    69
    
    
    
    33
    
    
    
    36
    
    
    
    109
    %Interest expense, net of capitalized interest
    
    
    (6,330
    )
    
    
    (5,518
    )
    
    
    (812
    )
    
    
    (15
    )%Equity in gain of pipelines
and gathering system ventures
    
    
    1
    
    
    
    217
    
    
    
    (216
    )
    
    
    (100
    )%Total
    
    $
    (495
    )
    
    $
    (27,154
    )
    
    $
    26,659
    
    
    
    (98
    )%
 Gain (loss) on derivatives not classified as hedges
  Interest expense
  Equity in gain of pipelines and gathering system ventures
  (31)




---



##### Table of Contents



Income taxes, deferred
  Basic and diluted net loss
  LIQUIDITY AND CAPITAL RESOURCES
     (32)




---



##### Table of Contents



(33)




---



##### Table of Contents



Bank Borrowings  Revolving Credit Facility
            (34)




---



##### Table of Contents



Senior Notes
    (35)




---



##### Table of Contents



Debt Ratings
  Interest Incurred
  Commodity Price Risk Management Transactions and Effects of Derivative Instruments
    Disclosures about Derivative Instruments and Hedging
Activities  an amendment of FASB Statement No. 133
 Fair Value Measurement,
 (36)




---



##### Table of Contents



Contractual Obligations, Commitments and Off-Balance Sheet Arrangements
   Trends and Outlook
  (37)




---



##### Table of Contents




    
    revised our 2009 capital expenditures downward to $29.1 million of
which:
 o
    
    $10.2 million will be used for
the completion of wells that were in progress at year-end in
our north Texas Barnett Shale project;o
    
    $5.2 million will be used for the
completion of wells that were in progress at year-end,
pipeline construction, seismic and leasehold acquisitions in
our New Mexico Wolfcamp Carbonate project;o
    
    $12.1 million will be used for
the completion of wells that were in progress at year-end,
the drilling and completion of new wells and workovers of
existing wells in our Permian Basin of west Texas properties;
ando
    
    $1.6 million will be used for
drilling and completion of new wells in our Yegua/Frio and
Cotton Valley Reef projects and lease maintenance on our
Utah/Colorado project; and
 
    
    entered into the Barnett Shale Farmout Agreement as described in
Note 4-Oil and Natural Gas Properties; and
    
    have taken steps to begin reducing overhead expenses by approximately $1.5 million on an annualized basis through reductions in salaries and other general and administrative expenses.
  (38)




---



##### Table of Contents



,
 
    
    internally generated cash from operations;
    
    proceeds from bank borrowings;
    
    proceeds from sales of equity and debt securities; and
    
    proceeds from sales of non-core assets.
  
    
    our proved reserves;
    
    the volumes of oil and natural gas we produce from
existing wells;
    
    the prices at which we sell oil and natural
gas;
    
    our ability to acquire, locate and produce
new reserves;
    
    events occurring within the global capital
markets; and
    
    results from re-determinations of the
borrowing base.
  
    
    increased bank borrowings;
    
    additional sales of our debt or equity securities;
    
    sales of non-core properties;
    
    other forms of financing; or
    
    a combination of the above.
  Oil and Natural Gas Price Trends
  (39)




---



##### Table of Contents



Production Trends
    Lease Operating Expense Trends
  Interest Expense Trends
  Income Taxes
 Accounting for Income
Taxes
 (40)




---



##### Table of Contents



Recent Accounting Pronouncements
 Business
Combinations,
 Noncontrolling Interests in
Consolidated Financial Statementsan amendment of ARB No. 51,
 Effective Date of
FASB Statement No. 157
 Disclosures about Derivative
Instruments and Hedging Activities, an amendment of FASB Statement No. 133, Accounting for Derivative Instruments and Hedging Activities,
 (41)




---



##### Table of Contents



The Hierarchy of Generally Accepted
Accounting Principles, The Meaning of Present Fairly in Conformity With
General Accepted Accounting Principles
 Modernization of Oil and Gas Reporting. a b c
  Determining the
Fair Value of a Financial Asset When the Volume and Level of Activity for the Asset
or Liability Have Significantly Decreased and Identifying Transactions That Are Not
Orderly Fair Value Measurements Interim Disclosures about Fair Value of
Financial Instruments Accounting
Changes and Error Corrections
  (42)




---



##### Table of Contents



Disclosures about Fair Value of Financial
Instruments, Interim Financial
Reporting, Determining Fair Value When the Volume and Level of
Activity for the Asset or Liability Have Significantly Decreased and Identifying
Transactions That Are Not Orderly, Recognition and
Presentation of Other-Than-Temporary Impairments
 Accounting
for Assets Acquired and Liabilities Assumed in a Business Combination That Arise
from Contingencies Business Combinations
 Critical Accounting Policies
  FORWARD-LOOKING STATEMENTS
 Cautionary Statement Regarding Forward-Looking Statements
  
    
    our future financial and operating performance and results;
    
    our drilling plans and ability to secure drilling rigs to effectuate
our plans;
    
    production volumes;
    
    our business strategy;
    
    market prices;
    
    sources of funds necessary to conduct operations and complete
acquisitions;
    
    development costs;
 (43)




---



##### Table of Contents




    
    number and location of planned wells;
    
    our future commodity price risk management activities;
    
    our plans and forecasts; and
    
    any other statements that are not historical facts.
   
    
    difficult and adverse conditions in the global and domestic capital
and credit markets;
    
    continued volatility and further deterioration of the capital and
credit markets;
    
    uncertainty about the effectiveness of the U.S. governments plan to
purchase large amounts of illiquid, mortgage-backed and other
securities from financial institutions;
    
    the impairment of financial institutions;
    
    exposure to financial and capital market risk;
    
    changes in general economic conditions, including the performance of
financial markets and interest rates, which may affect our ability to
raise capital and generate operating cash flow;
    
    unanticipated changes in industry trends;
    
    fluctuations in prices of oil and natural gas;
    
    dependent on key personnel;
    
    reliance on technological development and technology development
programs;
    
    demand for oil and natural gas;
    
    losses due to future litigation;
    
    future capital requirements and availability of financing;
    
    geological concentration of our reserves;
    
    risks associated with drilling and operating wells;
    
    competition;
    
    general economic conditions;
 (44)




---



##### Table of Contents




    
    governmental regulations and liability for environmental matters;
    
    receipt of amounts owed to us by purchasers of our production and
counterparties to our derivative contracts;
    
    hedging decisions, including whether or not to hedge;
    
    terrorist attacks or war;
    
    actions of third party co-owners of interests in properties in which
we also own an interest; and
    
    fluctuations in interest rates and availability of capital.
     
 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  Interest Rate Sensitivity as of March 31, 2009
  2013 and2009
    
    2010
    
    2011
    
    2012
    
    after
    
    Total($ in thousands, except interest rates)Revolving Credit Facility (secured)
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    225,000
    
    
    $
    225,000Interest rate
    
    
    4.75
    %
    
    
    4.75
    %
    
    
    4.75
    %
    
    
    4.75
    %
    
    
    4.75
    %Senior notes
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    150,000
    
    
    $
    150,000Interest rate
    
    
    10.25
    %
    
    
    10.25
    %
    
    
    10.25
    %
    
    
    10.25
    %
    
    
    10.25
    %
  (45)




---



##### Table of Contents



Notional
    
    
    Weighted Average
    
    EstimatedPeriod of Time
    
    Amounts
    
    
    Fixed Interest Rates
    
    Fair Market Value($ in millions)
    
    
    
    
    
    
    ($ in thousands)April 1, 2009 through December 31, 2009
    
    $
    100
    
    
    
    4.22%
    
    
    $
    (2,338
    )January 1, 2010 through October 31, 2010
    
    $
    100
    
    
    
    4.71%
    
    
    
    (2,738
    )November 1, 2010 through December 31, 2010
    
    $
    50
    
    
    
    4.26%
    
    
    
    (237
    )January 1, 2011 through December 31, 2011
    
    $
    100
    
    
    
    4.67%
    
    
    
    (2,522
    )Total Fair Market Value
    
    
    
    
    
    
    
    
    
    $
    (7,835
    )
 Commodity Price Sensitivity
  (46)




---



##### Table of Contents



Put Options.
  (47)




---



##### Table of Contents



EstimatedBarrels of
    
    
    
    
    
    
    Fair MarketPeriod of Time
    
    Oil
    
    
    Floor
    
    
    Value($ in thousands)April 1, 2009 through December 31, 2009
    
    
    82,500
    
    
    $
    100.00
    
    
    $
    3,727January 1, 2010 through December 31, 2010
    
    
    280,100
    
    
    $
    84.36
    
    
    
    6,256January 1, 2011 through December 31, 2011
    
    
    146,000
    
    
    $
    100.00
    
    
    
    5,177Total Fair Market Value
    
    
    
    
    
    
    
    
    
    $
    15,160
 Collars.
   Barrels of
    
    
    NYMEX Oil Prices
    
    
    Fair MarketPeriod of Time
    
    Oil
    
    
    Floor
    
    

Ceiling
    
    
    Value($ in thousands)April 1, 2009 thru December 31, 2009
    
    
    577,500
    
    
    $
    65.71
    
    
    $
    82.93
    
    
    $
    7,583January 1, 2010 thru October 31, 2010
    
    
    486,400
    
    
    $
    63.44
    
    
    $
    78.26
    
    
    
    2,886MMBtu of
    
    
    WAHA Gas PricesNatural Gas
    
    
    Floor
    
    

CeilingApril 1, 2009 through December 31, 2009
    
    
    2,475,000
    
    
    $
    7.06
    
    
    $
    9.93
    
    
    
    8,728January 1, 2010 through December 31, 2010
    
    
    3,650,000
    
    
    $
    4.75
    
    
    $
    5.90
    
    
    
    (310
    )Total Fair Market Value
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    18,887
 (48)




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##### Table of Contents



Commodity Swaps.
   EstimatedNumber of
    
    
    WAHA
    
    
    Fair MarketPeriod of Time
    
    MMBtu
    
    
    Swap Price
    
    
    Value($ in thousands)May 1, 2009 thru September 30, 2009
    
    
    765,000
    
    
    $
    3.91
    
    
    $
    362
 
 ITEM 4. CONTROLS AND PROCEDURES
   
 PART II  OTHER INFORMATION
 
 ITEM 1. LEGAL PROCEEDINGS
  th
 (49)




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##### Table of Contents



ITEM 1A. RISK FACTORS
  (50)




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##### Table of Contents



We must replace oil and natural gas reserves that we produce. Failure to replace
reserves may negatively affect our business.
  General economic conditions could adversely impact our results of operations.
     (51)




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##### Table of Contents



Adverse capital and credit market conditions may significantly affect our ability to
meet liquidity needs, access to capital and cost of capital.
    Difficult conditions in the global capital markets and the economy generally may
materially adversely affect our business and results of operations and we do not expect
these conditions to improve in the near future.
   (52)




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There can be no assurance that actions of the U.S. Government, Federal Reserve and
other governmental and regulatory bodies for the purpose of stabilizing the financial
markets will achieve the intended effect.
  The impairment of financial institutions could adversely affect us.
  If the counterparties to the derivative instruments we use to hedge our business risks
default or fail to perform, we may be exposed to risks we had sought to mitigate, which
could materially adversely affect our financial condition and results of operations.
  (53)




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##### Table of Contents



The fluctuation and volatility of oil and natural gas prices may adversely affect our
business, the value of our mineral properties, our revenues and profitability.
  Our oil and gas operations are subject to various Federal, state and local regulations
that materially affect our operations.
  (54)




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##### Table of Contents



Certain federal income tax deductions currently available with respect to oil and gas drilling and development may be eliminated as a result of future legislation.
   
 ITEM 5. OTHER INFORMATION
  
 ITEM 6. EXHIBITS
   No.
    
    Description of Exhibit3.1
    
    
    Certificate of Incorporation of Registrant (Incorporated by reference to
Exhibit 3.1 to Form 10-Q of the Registrant for the fiscal quarter ended June 30, 2004)3.2
    
    
    Bylaws of Registrant (Incorporated by reference to Exhibit 10.1 of the
Registrants Current Report on Form 8-K filed on November 30, 2007)3.3
    
    
    Certificate of Formation of Parallel, L.L.C. (Incorporated by reference to
Exhibit No. 3.3 of the Registrants Registration Statement on Form S-3, No. 333-119725
filed on October 13, 2004)3.4
    
    
    Limited Liability Company Agreement of Parallel, L.L.C. (Incorporated by
reference to Exhibit No. 3.4 of the Registrants Statement on Form S-3, No. 333-119725
filed on October 13, 2004)3.5
    
    
    Certificate of Limited Partnership of Parallel, L.P. (Incorporated by reference
to Exhibit No. 3.5 of the Registrants Registration Statement on Form S-3, No.
333-119725 filed on October 13, 2004)
 (55)




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##### Table of Contents



No.
    
    Description of Exhibit3.6
    
    
    Agreement of Limited Partnership of Parallel, L.P. (Incorporated by reference
to Exhibit No. 3.6 of the Registrants Registration Statement on Form S-3, No.
333-119725 filed on October 13, 2004)4.1
    
    
    Certificate of Designations, Preferences and Rights of Serial Preferred Stock 
6% Convertible Preferred Stock (Incorporated by reference to Exhibit 4.1 of Form 10-Q
of the Registrant for the fiscal quarter ended June 30, 2004)4.2
    
    
    Certificate of Designations, Preferences and Rights of Series A Preferred Stock
(Incorporated by reference to Exhibit 4.2 of Form 10-K of the Registrant for the fiscal
year ended December 31, 2000)4.3
    
    
    Rights Agreement, dated as of October 5, 2000, between the Registrant and
Computershare Trust Company, Inc., as Rights Agent (Incorporated by reference to
Exhibit 1 of Form 8-A of the Registrant filed with the Securities and Exchange
Commission on October 10, 2000)4.4
    
    
    Form of common stock certificate of the Registrant (Incorporated by reference
to Exhibit No. 4.6 of the Registrants Registration Statement on Form S-3, No.
333-119725 filed on October 13, 2004)4.5
    
    
    Warrant Purchase Agreement, dated November 20, 2001, between the Registrant and
Stonington Corporation (Incorporated by reference to Exhibit 4.7 of Form 10-K of the
Registrant for the fiscal year ended December 31, 2004)4.6
    
    
    Warrant Purchase Agreement, dated December 23, 2003, between the Registrant and
Stonington Corporation (Incorporated by reference to Exhibit 4.8 of Form 10-K of the
Registrant for the fiscal year ended December 31, 2004)4.7
    
    
    Purchase Warrant Agreement, dated as of October 1, 1980, between the Registrant
and American Stock Transfer, Inc. (Incorporated by reference to Exhibit 4.7 of Form
10-K of the Registrant for the fiscal year ended December 31, 2006)4.8
    
    
    First Amendment to Warrant Agreement, dated as of February 22, 2007, among the
Registrant, Computershare Shareholder Services, Inc. and Computershare Trust Company,
N.A. (Incorporated by reference to Exhibit 4.8 of Form 10-K of the Registrant for the
fiscal year ended December 31, 2006)4.9
    
    
    Form of Rule 144A 101/4% Senior Note due 2014 (Incorporated by reference to
Exhibit 4.2 to the Registrants Current Report on Form 8-K filed on August 1, 2007)4.10
    
    
    Form of IAI 101/4% Senior Note due 2014 (Incorporated by reference to Exhibit 4.3
to the Registrants Current Report on Form 8-K filed on August 1, 2007)4.11
    
    
    Form of Regulation S 101/4% Senior Note due 2014 (Incorporated by reference to
Exhibit 4.4 to the Registrants Current Report on Form 8-K filed on August 1, 2007)4.12
    
    
    Indenture, dated as of July 31, 2007, among the Registrant as Issuer and Wells
Fargo Bank, National Association as Trustee (Incorporated by reference to Exhibit 4.1
to the Registrants Current Report on Form 8-K filed on August 1, 2007)4.13
    
    
    Registration Rights Agreement, dated as of July 31, 2007, by and among the
Registrant, Jefferies & Company, Inc., Merrill Lynch, Pierce, Fenner and Smith
Incorporated and BNP Paribas Securities Corp. (Incorporated by reference to Exhibit
10.2 to the Registrants Current Report on Form 8-K filed on August 1, 2007)
 (56)




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##### Table of Contents



No.
    
    Description of Exhibit4.14
    
    
    Purchase Agreement, dated as of July 26, 2007, by and among the Registrant,
Jefferies & Company, Inc., Merrill Lynch, Pierce, Fenner and Smith Incorporated and BNP
Paribas Securities Corp. (Incorporated by reference to Exhibit 4.2 to the Registrants
Current Report on Form 8-K filed on August 1, 2007)4.15
    
    
    Form of 101/4% Unrestricted Senior Note due 2014 (Incorporated by reference to
Exhibit 4.13 of Form S-4 of the Registrant, Registration No. 333-148465)Executive Compensation Plans and Arrangements (Exhibit No.s 10.1 through 10.11):10.1
    
    
    1992 Stock Option Plan (Incorporated by reference to Exhibit 10.1 of Form 10-K
of the Registrant for the fiscal year ended December 31, 2004)10.2
    
    
    Non-Employee Directors Stock Option Plan (Incorporated by reference to Exhibit
10.3 of the Registrants Form 10-Q of the Registrant for the fiscal quarter ended June
30, 2005)10.3
    
    
    1998 Stock Option Plan (Incorporated by reference to Exhibit 10.4 of Form 10-K
of the Registrant for the fiscal year ended December 31, 2006)10.4
    
    
    2001 Non-Employee Directors Stock Option Plan (Incorporated by reference to
Exhibit 10.7 of the Registrants Form 10-Q Report for the fiscal quarter ended March
31, 2004)10.5
    
    
    2004 Non-Employee Director Stock Grant Plan (Incorporated by reference to
Exhibit 10.1 of the Registrants Form 8-K Report dated September 22, 2004)10.6
    
    
    Incentive and Retention Plan (Incorporated by reference to Exhibit 10.7 of Form
10-K of the Registrant for the fiscal year ended December 31, 2006)10.7
    
    
    2008 Long-Term Incentive Plan (Incorporated by reference to Exhibit 10.1 of the
Registrants Form 8-K Report dated March 27, 2008)10.8
    
    
    Form of Nonqualified Stock Option Agreement for nonqualified stock options
granted under the Registrants 2008 Long-Term Incentive Plan (Incorporated by reference
to Exhibit 10.2 of the Registrants Current Report on Form 8-K filed on June 18, 2008)10.9
    
    
    Form of Outside Director Stock Award Agreement for stock awards granted under
the Registrants 2008 Long-Term Incentive Plan (Incorporated by reference to Exhibit
10.3 of the Registrants Current Report on Form 8-K filed on June 18, 2008)10.10
    
    
    Form of Outside Director Restricted Stock Agreement for restricted stock
grants under the Registrants 2008 Long-Term Incentive Plan (Incorporated by reference
to Exhibit 10.4 of the Registrants Current Report on Form 8-K filed on June 18, 2008)10.11
    
    
    Agreement of Limited Partnership of West Fork Pipeline Company LP
(Incorporated by reference to Exhibit 10.21 of Form 10-K of the Registrant for the
fiscal year ended December 31, 2004)10.12
    
    
    ISDA Master Agreement, dated as of October 13, 2005, between Parallel, L.P.
and Citibank, N.A. (Incorporated by reference to Exhibit 10.5 of the Registrants Form
8-K Report dated October 14, 2005 and filed with the Securities and Exchange Commission
on October 20, 2005)10.13
    
    
    Third Amended and Restated Credit Agreement, dated as of December 23, 2005,
among Parallel Petroleum Corporation, Parallel, L.P., Parallel, L.L.C. and Citibank
Texas, N.A., BNP Paribas, CitiBank F.S.B., Western National Bank, Compass Bank,
Comerica Bank, Bank of Scotland and Fortis Capital Corp. (Incorporated by reference to
Exhibit No. 10.1 of the Registrants Form 8-K
 (57)




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##### Table of Contents



No.
    
    Description of ExhibitReport, dated December 23, 2005, as filed
with the Securities and Exchange Commission on December 30, 2005)10.14
    
    
    Second Lien Term Loan Agreement, dated November 15, 2005, among Parallel
Petroleum Corporation, Parallel, L.P., BNP Paribas and Citibank Texas, N.A.
(Incorporated by reference to Exhibit No. 10.4 of the Registrants Form 8-K Report,
dated November 15, 2005, as filed with the Securities and Exchange Commission on
November 21, 2005)10.15
    
    
    Intercreditor and Subordination Agreement, dated November 15, 2005, among
Citibank Texas, N.A., BNP Paribas, Parallel Petroleum Corporation, Parallel, L.P. and
Parallel, L.L.C. (Incorporated by reference to Exhibit No. 10.5 of the Registrants
Form 8-K Report, dated November 15, 2005, as filed with the Securities and Exchange
Commission on November 21, 2005)10.16
    
    
    Guaranty, dated as of December 23, 2005, made by Parallel, L.L.C. to and in
favor of Citibank Texas, N.A. (Incorporated by reference to Exhibit 10.23 of Form 10-K
of the Registrant for the fiscal year ended December 31, 2006)10.17
    
    
    Third Amended and Restated Pledge Agreement, dated as of December 23, 2005,
between Parallel, L.L.C. and Citibank Texas, N.A. (Incorporated by reference to Exhibit
10.24 of Form 10-K of the Registrant for the fiscal year ended December 31, 2006)10.18
    
    
    Second Lien Guarantee and Collateral Agreement, dated as of November 15, 2005,
made by Parallel Petroleum Corporation and Parallel, L.P. to and in favor of BNP
Paribas (Incorporated by reference to Exhibit 10.25 of Form 10-K of the Registrant for the
fiscal year ended December 31, 2006)10.19
    
    
    Third Amendment to Third Amended and Restated Credit Agreement, dated as of
July 31, 2007, among the Registrant, Citibank, N.A., BNP Paribas, Western National
Bank, Compass Bank, Comerica Bank, Bank of Scotland, and Fortis Capital Corp.
(Incorporated by reference to Exhibit 10.3 of the Registrants Current Report on Form
8-K filed on August 1, 2007)10.20
    
    
    Fourth Amendment to Third Amended and Restated Credit Agreement, dated as of
November 30, 2007, among the Registrant, Citibank, N.A., BNP Paribas, Western National
Bank, Compass Bank, Comerica Bank, Bank of Scotland, and Fortis Capital Corp.
(Incorporated by reference to Exhibit 10.27 of Form S-4 of the Registrant, Registration
No. 333-148465)10.21
    
    
    Hagerman Gas Gathering System Joint Venture Agreement, dated as of January 16,
2007, among the Registrant, Feagan Gathering Company and Capstone Oil and Gas Company,
L.P. (Incorporated by reference to Exhibit 10.28 of Form 10-K of the Registrant for
the fiscal year ended December 31, 2007)10.22
    
    
    Fourth Amended and Restated Credit Agreement, dated as of May 16, 2008, among
the Registrant, Citibank, N.A., BNP Paribas, Western National Bank, Compass Bank,
Comerica Bank, Bank of Scotland plc, and Texas Capital Bank, N.A. (Incorporated by
reference to Exhibit 10.1 of the Registrants Current Report on Form 8-K filed on May
22, 2008)10.23
    
    
    First Amendment to Fourth Amended and Restated Credit Agreement, dated as of
October 31, 2008, by and among Parallel Petroleum Corporation, Citibank, N.A., BNP
Paribas, Western National Bank, Compass Bank, Bank of Scotland plc, Texas Capital Bank,
N.A., Bank of America, N.A. and West Texas National Bank (Incorporated by reference to
Exhibit 10.34 of the Registrants Form 10-Q Report for the third fiscal quarter ended
September 30, 2008)
 (58)




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##### Table of Contents



No.
    
    Description of Exhibit10.24
    
    
    Second Amendment to Fourth Amended and Restated Credit Agreement, executed as
of February 19, 2009, by and among Parallel Petroleum Corporation, Citibank, N.A., BNP
Paribas, Western National Bank, Compass Bank, Bank of Scotland plc, Texas Capital Bank,
N.A., Bank of America, N.A. and West Texas National Bank (Incorporated by reference to
Exhibit 10.24 of Form 10-K of the Registrant for the fiscal year ended December 31,
2008)10.25
    
    
    Third Amendment to Fourth Amended and Restated Credit Agreement, executed as
of April 30, 2009, by among Parallel Petroleum Corporation, Citibank, N.A., BNP
Paribas, Western National Bank, Compass Bank, Bank of Scotland plc, Texas Capital Bank,
N.A., Bank of America, N.A. and West Texas National Bank (Incorporated by reference to
Exhibit 10.1 of the Registrants Current Report on
Form 8-K filed on May 4, 2009)14
    
    
    Code of Ethics (Incorporated by reference to Exhibit No. 14 of the Registrants
Form 10-K Report for the fiscal year ended December 31, 2003 and filed with the
Securities and Exchange Commission on March 22, 2004)*31.1
    
    
    Certification of Principal Executive Officer pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 302 of the Sarbanes  Oxley Act of 2002.*31.2
    
    
    Certification of Principal Financial Officer pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 302 of the Sarbanes  Oxley Act of 2002.**32.1
    
    
    Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes  Oxley Act of 2002.**32.2
    
    
    Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes  Oxley Act of 2002.
 
 *
    
    Filed herewith.**
    
    Furnished herewith. (59)




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##### Table of Contents



PARALLEL PETROLEUM CORPORATIONBY:   /s/ Larry C. OldhamDate: May 5, 2009
    Larry C. OldhamPresident and Chief Executive OfficerDate: May 5, 2009
    BY:  /s/ Steven D. FosterSteven D. Foster,Chief Financial Officer




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##### Table of Contents



No.
    
    Description of Exhibit3.1
    
    
    Certificate of Incorporation of Registrant (Incorporated by reference to
Exhibit 3.1 to Form 10-Q of the Registrant for the fiscal quarter ended June 30, 2004)3.2
    
    
    Bylaws of Registrant (Incorporated by reference to Exhibit 10.1 of the
Registrants Current Report on Form 8-K filed on November 30, 2007)3.3
    
    
    Certificate of Formation of Parallel, L.L.C. (Incorporated by reference to
Exhibit No. 3.3 of the Registrants Registration Statement on Form S-3, No. 333-119725
filed on October 13, 2004)3.4
    
    
    Limited Liability Company Agreement of Parallel, L.L.C. (Incorporated by
reference to Exhibit No. 3.4 of the Registrants Statement on Form S-3, No. 333-119725
filed on October 13, 2004)3.5
    
    
    Certificate of Limited Partnership of Parallel, L.P. (Incorporated by reference
to Exhibit No. 3.5 of the Registrants Registration Statement on Form S-3, No.
333-119725 filed on October 13, 2004)3.6
    
    
    Agreement of Limited Partnership of Parallel, L.P. (Incorporated by reference
to Exhibit No. 3.6 of the Registrants Registration Statement on Form S-3, No.
333-119725 filed on October 13, 2004)4.1
    
    
    Certificate of Designations, Preferences and Rights of Serial Preferred Stock 
6% Convertible Preferred Stock (Incorporated by reference to Exhibit 4.1 of Form 10-Q
of the Registrant for the fiscal quarter ended June 30, 2004)4.2
    
    
    Certificate of Designations, Preferences and Rights of Series A Preferred Stock
(Incorporated by reference to Exhibit 4.2 of Form 10-K of the Registrant for the fiscal
year ended December 31, 2000)4.3
    
    
    Rights Agreement, dated as of October 5, 2000, between the Registrant and
Computershare Trust Company, Inc., as Rights Agent (Incorporated by reference to
Exhibit 1 of Form 8-A of the Registrant filed with the Securities and Exchange
Commission on October 10, 2000)4.4
    
    
    Form of common stock certificate of the Registrant (Incorporated by reference
to Exhibit No. 4.6 of the Registrants Registration Statement on Form S-3, No.
333-119725 filed on October 13, 2004)4.5
    
    
    Warrant Purchase Agreement, dated November 20, 2001, between the Registrant and
Stonington Corporation (Incorporated by reference to Exhibit 4.7 of Form 10-K of the
Registrant for the fiscal year ended December 31, 2004)4.6
    
    
    Warrant Purchase Agreement, dated December 23, 2003, between the Registrant and
Stonington Corporation (Incorporated by reference to Exhibit 4.8 of Form 10-K of the
Registrant for the fiscal year ended December 31, 2004)4.7
    
    
    Purchase Warrant Agreement, dated as of October 1, 1980, between the Registrant
and American Stock Transfer, Inc. (Incorporated by reference to Exhibit 4.7 of Form
10-K of the Registrant for the fiscal year ended December 31, 2006)4.8
    
    
    First Amendment to Warrant Agreement, dated as of February 22, 2007, among the
Registrant, Computershare Shareholder Services, Inc. and Computershare Trust
Company, N.A. (Incorporated by reference to Exhibit 4.8 of Form 10-K of the
Registrant for the fiscal year ended December 31, 2006)




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##### Table of Contents



No.
    
    Description of Exhibit4.9
    
    
    Form of Rule 144A 101/4% Senior Note due 2014 (Incorporated by reference to
Exhibit 4.2 to the Registrants Current Report on Form 8-K filed on August 1, 2007)4.10
    
    
    Form of IAI 101/4% Senior Note due 2014 (Incorporated by reference to Exhibit 4.3
to the Registrants Current Report on Form 8-K filed on August 1, 2007)4.11
    
    
    Form of Regulation S 101/4% Senior Note due 2014 (Incorporated by reference to
Exhibit 4.4 to the Registrants Current Report on Form 8-K filed on August 1, 2007)4.12
    
    
    Indenture, dated as of July 31, 2007, among the Registrant as Issuer and Wells
Fargo Bank, National Association as Trustee (Incorporated by reference to Exhibit 4.1
to the Registrants Current Report on Form 8-K filed on August 1, 2007)4.13
    
    
    Registration Rights Agreement, dated as of July 31, 2007, by and among the
Registrant, Jefferies & Company, Inc., Merrill Lynch, Pierce, Fenner and Smith
Incorporated and BNP Paribas Securities Corp. (Incorporated by reference to Exhibit
10.2 to the Registrants Current Report on Form 8-K filed on August 1, 2007)4.14
    
    
    Purchase Agreement, dated as of July 26, 2007, by and among the Registrant,
Jefferies & Company, Inc., Merrill Lynch, Pierce, Fenner and Smith Incorporated and BNP
Paribas Securities Corp. (Incorporated by reference to Exhibit 4.2 to the Registrants
Current Report on Form 8-K filed on August 1, 2007)4.15
    
    
    Form of 101/4% Unrestricted Senior Note due 2014 (Incorporated by reference to
Exhibit 4.13 of Form S-4 of the Registrant, Registration No. 333-148465)
Executive Compensation Plans and Arrangements (Exhibit No.s 10.1 through 10.11):10.1
    
    
    1992 Stock Option Plan (Incorporated by reference to Exhibit 10.1 of Form 10-K
of the Registrant for the fiscal year ended December 31, 2004)10.2
    
    
    Non-Employee Directors Stock Option Plan (Incorporated by reference to Exhibit
10.3 of the Registrants Form 10-Q of the Registrant for the fiscal quarter ended June
30, 2005)10.3
    
    
    1998 Stock Option Plan (Incorporated by reference to Exhibit 10.4 of Form 10-K
of the Registrant for the fiscal year ended December 31, 2006)10.4
    
    
    2001 Non-Employee Directors Stock Option Plan (Incorporated by reference to
Exhibit 10.7 of the Registrants Form 10-Q Report for the fiscal quarter ended March
31, 2004)10.5
    
    
    2004 Non-Employee Director Stock Grant Plan (Incorporated by reference to
Exhibit 10.1 of the Registrants Form 8-K Report dated September 22, 2004)10.6
    
    
    Incentive and Retention Plan (Incorporated by reference to Exhibit 10.7 of Form
10-K of the Registrant for the fiscal year ended December 31, 2006)10.7
    
    
    2008 Long-Term Incentive Plan (Incorporated by reference to Exhibit 10.1 of the
Registrants Form 8-K Report dated March 27, 2008)10.8
    
    
    Form of Nonqualified Stock Option Agreement for nonqualified stock options
granted under the Registrants 2008 Long-Term Incentive Plan (Incorporated by reference
to Exhibit 10.2 of the Registrants Current Report on Form 8-K filed on June 18, 2008)10.9
    
    
    Form of Outside Director Stock Award Agreement for stock awards granted under
the Registrants 2008 Long-Term Incentive Plan (Incorporated by reference to Exhibit
10.3 of the Registrants Current Report on Form 8-K filed on June 18, 2008)




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##### Table of Contents



No.
    
    Description of Exhibit10.10
    
    
    Form of Outside Director Restricted Stock Agreement for restricted stock
grants under the Registrants 2008 Long-Term Incentive Plan (Incorporated by reference
to Exhibit 10.4 of the Registrants Current Report on Form 8-K filed on June 18, 2008)10.11
    
    
    Agreement of Limited Partnership of West Fork Pipeline Company LP
(Incorporated by reference to Exhibit 10.21 of Form 10-K of the Registrant for the
fiscal year ended December 31, 2004)10.12
    
    
    ISDA Master Agreement, dated as of October 13, 2005, between Parallel, L.P.
and Citibank, N.A. (Incorporated by reference to Exhibit 10.5 of the Registrants Form
8-K Report dated October 14, 2005 and filed with the Securities and Exchange Commission
on October 20, 2005)10.13
    
    
    Third Amended and Restated Credit Agreement, dated as of December 23, 2005,
among Parallel Petroleum Corporation, Parallel, L.P., Parallel, L.L.C. and Citibank
Texas, N.A., BNP Paribas, CitiBank F.S.B., Western National Bank, Compass Bank,
Comerica Bank, Bank of Scotland and Fortis Capital Corp. (Incorporated by reference to
Exhibit No. 10.1 of the Registrants Form 8-K Report, dated December 23, 2005, as filed
with the Securities and Exchange Commission on December 30, 2005)10.14
    
    
    Second Lien Term Loan Agreement, dated November 15, 2005, among Parallel
Petroleum Corporation, Parallel, L.P., BNP Paribas and Citibank Texas, N.A.
(Incorporated by reference to Exhibit No. 10.4 of the Registrants Form 8-K Report,
dated November 15, 2005, as filed with the Securities and Exchange Commission on
November 21, 2005)10.15
    
    
    Intercreditor and Subordination Agreement, dated November 15, 2005, among
Citibank Texas, N.A., BNP Paribas, Parallel Petroleum Corporation, Parallel, L.P. and
Parallel, L.L.C. (Incorporated by reference to Exhibit No. 10.5 of the Registrants
Form 8-K Report, dated November 15, 2005, as filed with the Securities and Exchange
Commission on November 21, 2005)10.16
    
    
    Guaranty, dated as of December 23, 2005, made by Parallel, L.L.C. to and in
favor of Citibank Texas, N.A. (Incorporated by reference to Exhibit 10.23 of Form 10-K
of the Registrant for the fiscal year ended December 31, 2006)10.17
    
    
    Third Amended and Restated Pledge Agreement, dated as of December 23, 2005,
between Parallel, L.L.C. and Citibank Texas, N.A. (Incorporated by reference to Exhibit
10.24 of Form 10-K of the Registrant for the fiscal year ended December 31, 2006)10.18
    
    
    Second Lien Guarantee and Collateral Agreement, dated as of November 15, 2005,
made by Parallel Petroleum Corporation and Parallel, L.P. to and in favor of BNP
Paribas (Incorporated by reference to Exhibit 10.25 of Form 10-K of the Registrant for
the fiscal year ended December 31, 2006)10.19
    
    
    Third Amendment to Third Amended and Restated Credit Agreement, dated as of
July 31, 2007, among the Registrant, Citibank, N.A., BNP Paribas, Western National
Bank, Compass Bank, Comerica Bank, Bank of Scotland, and Fortis Capital Corp.
(Incorporated by reference to Exhibit 10.3 of the Registrants Current Report on Form
8-K filed on August 1, 2007)10.20
    
    
    Fourth Amendment to Third Amended and Restated Credit Agreement, dated as of
November 30, 2007, among the Registrant, Citibank, N.A., BNP Paribas, Western
National Bank, Compass Bank, Comerica Bank, Bank of Scotland, and Fortis Capital
Corp. (Incorporated by reference to Exhibit 10.27 of Form S-4 of the Registrant,
Registration No. 333-148465)10.21
    
    
    Hagerman Gas Gathering System Joint Venture Agreement, dated as of January 16,
2007, among the Registrant, Feagan Gathering Company and Capstone Oil and Gas Company,
L.P. (Incorporated by reference to Exhibit 10.28 of Form 10-K of the Registrant for
the fiscal year ended December 31, 2007)




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##### Table of Contents



No.
    
    Description of Exhibit10.22
    
    
    Fourth Amended and Restated Credit Agreement, dated as of May 16, 2008, among
the Registrant, Citibank, N.A., BNP Paribas, Western National Bank, Compass Bank,
Comerica Bank, Bank of Scotland plc, and Texas Capital Bank, N.A. (Incorporated by
reference to Exhibit 10.1 of the Registrants Current Report on Form 8-K filed on May
22, 2008)10.23
    
    
    First Amendment to Fourth Amended and Restated Credit Agreement, dated as of
October 31, 2008, by and among Parallel Petroleum Corporation, Citibank, N.A., BNP
Paribas, Western National Bank, Compass Bank, Bank of Scotland plc, Texas Capital Bank,
N.A., Bank of America, N.A. and West Texas National Bank (Incorporated by reference to
Exhibit 10.34 of the Registrants Form 10-Q Report for the third fiscal quarter ended
September 30, 2008)10.24
    
    
    Second Amendment to Fourth Amended and Restated Credit Agreement, executed as
of February 19, 2009, by and among Parallel Petroleum Corporation, Citibank, N.A., BNP
Paribas, Western National Bank, Compass Bank, Bank of Scotland plc, Texas Capital Bank,
N.A., Bank of America, N.A. and West Texas National Bank (Incorporated by reference to
Exhibit 10.24 of Form 10-K of the Registrant for the fiscal year ended December 31,
2008)10.25
    
    
    Third Amendment to Fourth Amended and Restated Credit Agreement, executed as
of April 30, 2009, by among Parallel Petroleum Corporation, Citibank, N.A., BNP
Paribas, Western National Bank, Compass Bank, Bank of Scotland plc, Texas Capital Bank,
N.A., Bank of America, N.A. and West Texas National Bank (Incorporated by reference to
Exhibit 10.1 of the Registrants Current Report on
Form 8-K filed on May 4, 2009)14
    
    
    Code of Ethics (Incorporated by reference to Exhibit No. 14 of the Registrants
Form 10-K Report for the fiscal year ended December 31, 2003 and filed with the
Securities and Exchange Commission on March 22, 2004)*31.1
    
    
    Certification of Principal Executive Officer pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 302 of the Sarbanes  Oxley Act of 2002.*31.2
    
    
    Certification of Principal Financial Officer pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 302 of the Sarbanes  Oxley Act of 2002.**32.1
    
    
    Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes  Oxley Act of 2002.**32.2
    
    
    Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes  Oxley Act of 2002.
 
 *
    
    Filed herewith.**
    
    Furnished herewith.