**Exhibit 4.2**

**THIRD SUPPLEMENTAL INDENTURE**

This Third Supplemental Indenture, dated as of August 21, 2006 (this “***SupplementalIndenture***” or “***Guarantee***”), among Cane River Development LLC, a Delaware limited liability company (“***Cane River***”), PXP Deepwater L.L.C., a Delaware limited liability company(“***Deepwater***” and, together with Cane River, the “***New Subsidiary Guarantors***”), Plains Exploration & Production Company, a Delaware corporation (together with its successors and assigns, the“***Issuer***”), the subsidiary guarantors party thereto (the “***Current Subsidiary Guarantors***”), and Wells Fargo Bank, N.A., as Trustee (the “***Trustee***”) under the Indenture referred tobelow. 

W I T N E S S E T H: 

WHEREAS, the Issuer,the Current Subsidiary Guarantors and the Trustee have heretofore executed and delivered an Indenture, dated as of June 30, 2004 (as amended, supplemented, waived or otherwise modified through the date hereof, the“***Indenture***”), providing for the initial issuance of an aggregate principal amount of $250,000,000 of 7 1/8% Senior Notes due 2014 of the Issuer (the “***Securities***”); 

WHEREAS, Section 3.10 of the Indenture provides that the Issuer is required to cause each Restricted Subsidiary other than a Foreign Subsidiary createdor acquired by the Issuer and each of the Congo Domestic Subsidiaries, to the extent set forth in the Indenture, to execute and deliver to the Trustee a Subsidiary Guarantee pursuant to which such Subsidiary Guarantor will unconditionally Guarantee,on a joint and several basis with the other Subsidiary Guarantors, the full and prompt payment of the principal of, premium, and interest on the Securities on a senior basis; and 

WHEREAS, pursuant to Section 9.1 of the Indenture, the Trustee and the Issuer are authorized to execute and deliver this Supplemental Indenture toamend the Indenture, without the consent of any Securityholder. 

NOW, THEREFORE, in consideration of the foregoing and for other good and valuableconsideration, the receipt of which is hereby acknowledged, the New Subsidiary Guarantors, the Issuer, the other Current Subsidiary Guarantors and the Trustee mutually covenant and agree for the equal and ratable benefit of the Holders of theSecurities as follows: 

Definitions 

Defined Terms. As used in this Guarantee, terms defined in the Indenture or in the preamble or recital hereto are used herein as therein defined, except that the term “***Holders***” in this Guarantee shall refer tothe term “***Securityholders***” as defined in the Indenture and the Trustee acting on behalf or for the benefit of such Holders. The words “***herein***,” “***hereof***” and“***hereby***” and other words of similar import used in this Supplemental Indenture refer to this Supplemental Indenture as a whole and not to any particular section hereof. 

Agreement to be Bound; Guarantee 

Agreementto be Bound. Each of the New Subsidiary Guarantors hereby becomes a party to the Indenture, as a Subsidiary Guarantor and as such will have all of the rights and be subject to all of the obligations and agreements of a Subsidiary Guarantor underthe Indenture. Each of the New Subsidiary Guarantors agrees to be bound by all of the provisions of the Indenture applicable to a Subsidiary Guarantor and to perform all of the obligations and agreements of a Subsidiary Guarantor under theIndenture. 

Guarantee. Each of the New Subsidiary Guarantors hereby fully, unconditionally and irrevocably guarantees, as primary obligor andnot merely as surety, jointly and severally with each other Subsidiary Guarantor, to each Holder of the Securities and the Trustee, the full and punctual payment when due, whether at maturity, by acceleration, by redemption or otherwise, of theObligations pursuant to Article X of the Indenture on a senior basis. 

Miscellaneous 

Notices. All notices and other communications to the New Subsidiary Guarantors shall be given as provided in the Indenture to the New Subsidiary Guarantors at the following address, with a copy to the Issuer as providedin the Indenture for notices to the Issuer: c/o Plains Exploration & Production Company, 700 Milam, Suite 3100, Houston, Texas 77002. 

Parties. Nothing expressed or mentioned herein is intended or shall be construed to give any Person, firm or corporation, other than the Holders and the Trustee, any legal or equitable right, remedy or claim under or in respect ofthis Supplemental Indenture or the Indenture or any provision herein or therein contained. 

Governing Law. This Supplemental Indenture shallbe governed by, and construed in accordance with, the laws of the State of New York. 

Severability Clause. In case any provision in thisSupplemental Indenture shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby and such provision shall be ineffective only to the extentof such invalidity, illegality or unenforceability. 

Ratification of Indenture; Supplemental Indentures Part of Indenture. Except as expresslyamended hereby, the Indenture is in all respects ratified and confirmed and all the terms, conditions and provisions thereof shall remain in full force and effect. This Supplemental Indenture shall form a part of the Indenture for all purposes, andevery Holder of Securities heretofore or hereafter authenticated and delivered shall be bound hereby. The Trustee makes no representation or warranty as to the validity or sufficiency of this Supplemental Indenture. 

Counterparts. The parties hereto may sign one or more copies of this Supplemental Indenture in counterparts, all of which together shall constitute one andthe same agreement. 

Headings. The headings of the Articles and the sections in this Guarantee are for convenience of reference only and shallnot be deemed to alter or affect the meaning or interpretation of any provisions hereof. 

**[SIGNATURE PAGE FOLLOWS]**

IN WITNESS WHEREOF, the parties hereto have caused this Third Supplemental Indenture to be duly executed as of thedate first above written. 

 
PLAINS EXPLORATION & PRODUCTION COMPANYBy: /s/ Winston M. TalbertName: Winston M. TalbertTitle: Executive Vice President & Chief Financial OfficerCANE RIVER DEVELOPMENT LLC, as a New Subsidiary GuarantorBy: /s/ John F. WombwellName: John F. WombwellTitle: Vice President & SecretaryPXP DEEPWATER L.L.C., as a New Subsidiary GuarantorBy: /s/ Winston M. TalbertName: Winston M. TalbertTitle: Vice President & TreasurerWELLS FARGO BANK. N.A., as TrusteeBy: /s/ Nancye PattersonName: Nancye PattersonTitle: Vice President