<PAGE>
                                                                    Exhibit 10.1

                                                                [EXECUTION COPY]

                       FOURTH AMENDMENT TO SECOND AMENDED
                          AND RESTATED CREDIT AGREEMENT

     This Fourth Amendment to Second Amended and Restated Credit Agreement (this
"Fourth Amendment") dated as of November 15, 2005, is by and among PARALLEL
PETROLEUM CORPORATION, a Delaware corporation, and PARALLEL, L.P., a Texas
limited partnership (collectively, the "Borrowers"), and PARALLEL, L.L.C., a
Delaware limited liability company ("Guarantor"), and CITIBANK TEXAS, N.A.
(formerly known as First American Bank, SSB), BNP PARIBAS, WESTERN NATIONAL BANK
and CITIBANK, F.S.B. (collectively, "Lenders"), and CITIBANK TEXAS, N.A., as
Joint Lead Arranger and as Administrative Agent ("Agent") and BNP PARIBAS, as
Joint Lead Arranger and as Syndication Agent.

                                    RECITALS:

     WHERAS, Borrowers, Guarantor and Lenders in the capacities stated above,
entered into that Second Amended and Restated Credit Agreement dated as of
September 27, 2004, as amended by First Amendment to Second Amended and Restated
Credit Agreement dated as of December 27, 2004, by Second Amendment to Second
Amended and Restated Credit Agreement dated as of April 1, 2005, and by Third
Amendment to Second Amended and Restated Credit Agreement dated as of October
13, 2005 (as amended, the "Credit Agreement"); and

     WHEREAS, Borrowers, Guarantor and Lenders desire to amend the Credit
Agreement in certain respects.

     NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged and confessed, the parties hereto
agree as follows:

                                    Agreement

     Section 1. Definitions. Except as otherwise expressly provided herein, all
terms defined in the Credit Agreement shall have the same meanings herein.

     Section 2. New Definitions. Section 1 of the Credit Agreement is hereby
amended to include the following additional defined terms in their appropriate
alphabetical order:

          (a) Intercreditor Agreement means that certain Intercreditor and
     Subordination Agreement dated November 15, 2005, executed by Borrowers,
     Guarantor, Agent, and BNP Paribas, as Subordinated Administrative Agent, as
     the same may be amended, modified or restated from time to time.

          (b) Subordinated Debt means all obligations owed by either Borrower or
     Guarantor pursuant to the Subordinated Loan Agreement, the Subordinated
     Notes or any related document or instrument, as the same may be amended,
     modified or restated from time to time.


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          (c) Subordinated Loan Agreement means that certain Second Lien Term
     Loan Agreement dated November 15, 2005, executed by Borrowers, BNP Paribas,
     as Administrative Agent, and the other lenders parties thereto, as the same
     may be amended, modified or restated from time to time.

          (d) Subordinated Notes means the subordinated promissory notes issued
     pursuant to the Subordinated Loan Agreement, as the same may be renewed,
     extended, modified or amended from time to time.

     Section 3. Amendment to Definition of Change of Control. The definition of
"Change of Control" in Section 1 of the Credit Agreement is hereby amended in
its entirety to read as follows:

          Change of Control shall occur (i) if a majority of the individuals
     comprising the Board of Directors of PPC as of the Effective Date shall
     either resign, be declared incompetent or otherwise be removed (voluntarily
     or involuntarily) or cease to serve as members of the Board of Directors of
     PPC, (ii) upon the acquisition of beneficial ownership (within the meaning
     of Rule 13d-3 under the Securities Exchange Act of 1934, as amended, the
     "1934 Act") of an aggregate of 35% or more of the Voting Power of PPC's
     outstanding Voting Securities by any person or group (as such term is used
     in Rule 13d-5 under the 1934 Act), and/or (iii) upon the sale, lease,
     transfer, conveyance or other disposition (other than by way of merger or
     consolidation), in one or a series of related transactions, of all or
     substantially all of the assets of PPC and its Subsidiaries taken as a
     whole to any "person" (as such term is used in Sections 13(d) and 14(d) of
     the 1934 Act). For purposes of the definition of "Change of Control,"
     Voting Securities" means all securities of a company entitling the holders
     thereof to vote in an election of directors (without consideration of the
     rights of any class of stock other than the common stock to elect directors
     by a separate class vote); and a specified percentage of the "Voting Power"
     of a company means such number of the Voting Securities as will enable the
     holders thereof to cast such percentage of all the votes which could be
     cast in an election of directors (without consideration of the rights of
     any class of stock other than the common stock to elect directors by a
     separate class vote).

     Section 4. Amendment to Definition of Consolidated Current Liabilities. The
definition of "Consolidated Current Liabilities" in Section 1 of the Credit
Agreement is hereby amended in its entirety to read as follows:

          Consolidated Current Liabilities means the total of consolidated
     current obligations as determined in accordance with GAAP, excluding
     therefrom, as of any date, current maturities due on the Loans and the
     Subordinated Notes, and excluding the after-tax net effect of any
     non-recurring non-cash charges after June 30, 2004, under Financial
     Accounting Standards Board Statement No. 133, as amended, supplemented or
     modified from time to time.

     Section 5. Amendment to Definition of Permitted Liens. The definition of
"Permitted Liens" in Section 1 of the Credit Agreement is hereby amended in its
entirety to read as follows:

          Permitted Liens shall mean (i) royalties, overriding royalties,
     reversionary interests, production payments and similar burdens to the
     extent the same do not reduce either Borrower's or Guarantor's net revenue
     interest in the Oil and Gas Properties to an interest below that
     represented to Agent and Lenders; (ii) sales contracts or other


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     arrangements for the sale of production of oil, gas or associated liquid or
     gaseous hydrocarbons which would not (when considered cumulatively with the
     matters discussed in clause (i) above) deprive either Borrower or Guarantor
     of any material right in respect of its assets or properties (except for
     rights customarily granted with respect to such contracts and
     arrangements); (iii) statutory Liens for taxes or other assessments that
     are not yet delinquent (or that, if delinquent, are being contested in good
     faith by appropriate proceedings, levy and execution thereon having been
     stayed and continue to be stayed and for which either Borrower or Guarantor
     has set aside on its books adequate reserves in accordance with GAAP); (iv)
     easements, rights of way, servitudes, permits, surface leases and other
     rights in respect to surface operations, pipelines, grazing, logging,
     canals, ditches, reservoirs or the like, conditions, covenants and other
     restrictions, and easements of streets, alleys, highways, pipelines,
     telephone lines, power lines, railways and other easements and rights of
     way on, over or in respect of either Borrower's or Guarantor's assets or
     properties and that do not individually or in the aggregate cause a
     Material Adverse Effect; (v) materialmen's, mechanic's, repairman's,
     employee's, vendor's, laborer's warehousemen's, landlord's, carrier's,
     pipeline's, contractor's, sub-contractor's, operator's, non-operator's
     (arising under operating or joint operating agreements), and other Liens
     (including any financing statements filed in respect thereof) incidental to
     obligations incurred by either Borrower or Guarantor in connection with the
     construction, maintenance, development, transportation, processing, storage
     or operation of either Borrower's or Guarantor's assets or properties to
     the extent not delinquent (or which, if delinquent, are being contested in
     good faith by appropriate proceedings and for which either Borrower or
     Guarantor, as applicable, has set aside on its books adequate reserves in
     accordance with GAAP); (vi) all contracts, agreements and instruments, and
     all defects and irregularities and other matters affecting either
     Borrower's or Guarantor's assets and properties which were in existence at
     the time either Borrower's or Guarantor's assets and properties were
     originally acquired by it and all routine operational agreements entered
     into in the ordinary course of business, which contracts, agreements,
     instruments, defects, irregularities and other matters and routine
     operational agreements are not such as to, individually or in the
     aggregate, interfere materially with the operation, value or use of either
     Borrower's or Guarantor's assets and properties, considered in the
     aggregate; (vii) liens in connection with workmen's compensation,
     unemployment insurance or other social security, old age pension or public
     liability obligations; (viii) legal or equitable encumbrances deemed to
     exist by reason of the existence of any litigation or other legal
     proceeding or arising out of a judgment or award with respect to which an
     appeal is being prosecuted in good faith and levy and execution thereon
     have been stayed and continue to be stayed; (ix) rights reserved to or
     vested in any municipality, governmental, statutory or other public
     authority to control or regulate either Borrower's or Guarantor's assets
     and properties in any manner, and all applicable laws, rules and orders
     from any governmental authority; (x) landlord's liens; (xi) Liens incurred
     pursuant to the Security Instruments; and (xii) Liens securing the
     Subordinated Debt. Provided, however, that the definition of the term
     "Permitted Liens" does not include Liens of any kind or character which are
     prior by perfection to Liens on the Collateral held by Agent, or which may,
     by operation of law, become prior to such Liens held by Agent.

     Section 6. Amendment to Letter of Credit Provisions. Section 2(d) and
Section 2(e) of the Credit Agreement are hereby amended in their entirety to
read as follows, respectively:

          (d) Letters of Credit. On the terms and conditions hereinafter set
     forth, the Agent, or an Affiliate of Agent, shall from time to time during
     the period beginning on


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     the Effective Date and ending on the Maturity Date upon request of either
     Borrower issue standby Letters of Credit for the account of either Borrower
     (the "Letters of Credit") in such face amounts as either Borrower may
     request, but not to exceed in the aggregate face amount at any time
     outstanding the sum of One Million and No/100 Dollars ($1,000,000.00). The
     face amount of all Letters of Credit issued and outstanding hereunder shall
     be considered as Advances on the Commitment for Borrowing Base purposes and
     all payments made by the Agent, or any issuing Affiliate of Agent, on such
     Letters of Credit shall be considered as Advances under the Notes. Each
     Letter of Credit used for the account of either Borrower hereunder shall
     (i) be in favor of such beneficiaries as are specifically requested by such
     Borrower for purposes of securing such Borrower's obligations associated
     with its oil and gas operations and activities, or securing such Borrower's
     obligations in connection with Rate Management Transactions permitted under
     this Agreement, (ii) have an expiration date not exceeding the earlier of
     (a) one year or (b) the Maturity Date, and (iii) contain such other terms
     and provisions as may be required by Agent. Each Lender (other than Agent,
     except in cases where an Affiliate of Agent is the issuer) agrees that,
     upon issuance of any Letter of Credit hereunder, it shall automatically
     acquire a participation in the Agent's, or its issuing Affiliate's,
     liability under such Letter of Credit in an amount equal to such Lender's
     Commitment Percentage of such liability, and each Lender (other than Agent,
     except in cases where an Affiliate of Agent is the issuer) thereby shall
     absolutely, unconditionally and irrevocably assume, as primary obligor and
     not as surety, and shall be unconditionally obligated to Agent, or its
     issuing Affiliate, to pay and discharge when due, its Commitment Percentage
     of Agent's, or its issuing Affiliate's, liability under such Letter of
     Credit. The Borrowers hereby, jointly and severally, unconditionally agree
     to pay and reimburse the Agent, or its issuing Affiliate, for the amount of
     each demand for payment under any Letter of Credit that is in compliance
     with the provisions of any such Letter of Credit at or prior to the date on
     which payment is to be made by the Agent, or its issuing Affiliate, to the
     beneficiary thereunder, without presentment, demand, protest or other
     formalities of any kind. Upon receipt from any beneficiary of any Letter of
     Credit of any demand for payment under such Letter of Credit, the Agent
     shall promptly notify the Borrowers of the demand and the date upon which
     such payment is to be made by the Agent, or its issuing Affiliate, to such
     beneficiary in respect of such demand. Forthwith upon receipt of such
     notice from the Agent, Borrowers shall advise the Agent whether or not
     Borrowers intend to borrow hereunder to finance their obligations to
     reimburse the Agent, or its issuing Affiliate, and if so, submit a Notice
     of Borrowing as provided in Section 2(c) hereof. If Borrowers fail to so
     advise Agent and thereafter fail to reimburse Agent, or its issuing
     Affiliate, the Agent shall notify each Lender of the demand and the failure
     of the Borrowers to reimburse the Agent, or its issuing Affiliate, and each
     Lender shall reimburse the Agent, or its issuing Affiliate, for its
     Commitment Percentage of each such draw paid by the Agent, or its issuing
     Affiliate, and unreimbursed by the Borrowers. All such amounts paid by
     Agent, or its issuing Affiliate, and/or reimbursed by the Lenders shall be
     treated as an Advance or Advances under the Commitment, which Advances
     shall be immediately due and payable and shall bear interest at the Maximum
     Rate.

          (e) Procedure for Obtaining Letters of Credit. The amount and date of
     issuance, renewal, extension or reissuance of a Letter of Credit pursuant
     to the Lenders' commitments above in Section 2(d) shall be designated by
     either Borrower's written request delivered to Agent at least three (3)
     Business Days prior to the date of such issuance, renewal, extension or
     reissuance. Concurrently with or promptly following the delivery of the
     request for a Letter of Credit, the Borrower making such request shall


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     execute and deliver to the Agent, or its issuing Affiliate, an application
     and agreement with respect to the Letter of Credit, said application and
     agreement to be in the form used by the Agent, or its issuing Affiliate.
     Neither the Agent nor any Affiliate of Agent shall be obligated to issue,
     renew, extend or reissue such Letter of Credit if (A) the amount thereon
     when added to the face amount of the outstanding Letters of Credit plus any
     Reimbursement Obligations exceeds One Million and No/100 Dollars
     ($1,000,000.00) or (B) the amount thereof when added to the Total
     Outstandings would exceed the Commitment. Borrowers, jointly and severally,
     agree to pay the Agent, or its issuing Affiliate, for the benefit of the
     Lenders commissions for issuing the Letters of Credit (calculated
     separately for each Letter of Credit) in an amount equal to the greater of
     (i) the LIBOR Margin in effect per annum at the time of issuance times the
     maximum face amount of the Letter of Credit (calculated on the basis of
     actual days elapsed or a year consisting of 360 days) or (ii) $500.00. In
     addition, Borrowers, jointly and severally, agree to pay to the Agent, or
     its issuing Affiliate, for its own account an additional commission of
     one-quarter of one percent (.25%) times the maximum face amount of such
     Letter of Credit for issuing each such Letter of Credit. Such commissions
     shall be payable prior to the issuance of each Letter of Credit and
     thereafter on each anniversary date of such issuance while such Letter of
     Credit is outstanding.

     Section 7. New Affirmative Covenant. Section 12 of the Credit Agreement is
hereby amended to include an additional affirmative covenant reading as follows:

          (x) Subordinated Loan Agreement. Borrowers and Guarantor will (i)
     furnish to Agent copies of all documents, instruments, notices, reports,
     certificates or other items which are furnished to or received from the
     administrative agent or any lender pursuant to the terms of the
     Subordinated Loan Agreement or any Loan Documents (as defined in the
     Subordinated Loan Agreement), at the same time as the same are furnished to
     the administrative agent or any lender pursuant to the terms of
     Subordinated Loan Agreement or any such Subordinated Loan Documents (except
     to the extent a copy of any such item has previously been furnished to
     Agent), and (ii) grant to Agent for the ratable benefit of the Lenders a
     first and prior Lien on any of their assets upon which the administrative
     agent or any lender under the Subordinated Loan Agreement is granted a
     Lien, prior to granting any such Lien to the administrative agent or any
     lender under the Subordinated Loan Agreement.

     Section 8. Amendment to Debt Covenant. Section 13(f) of the Credit
Agreement is hereby amended in its entirety to read as follows:

          (f) Debts, Guaranties and Other Obligations. Neither either Borrower
     nor Guarantor will, and will not permit any Subsidiary to, incur, create,
     assume or in any manner become or be liable in respect of any indebtedness,
     or guarantee or otherwise in any manner become or be liable in respect of
     any indebtedness, liabilities or other obligations of any other Person,
     whether by agreement to purchase the indebtedness of any other Person or
     agreement for the furnishing of funds to any other Person through the
     purchase or lease of goods, supplies or services (or by way of stock
     purchase, capital contribution, advance or loan) for the purpose of paying
     or discharging the indebtedness of any other Person, or otherwise, except
     that the foregoing restrictions shall not apply to:

               (i) the Notes and any renewal or increase thereof, or other
          indebtedness heretofore disclosed to Lenders in the Borrowers' or
          Guarantor's Financial Statements or on Schedule "4" hereto; or


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               (ii) taxes, assessments or other government charges which are not
          yet due or are being contested in good faith by appropriate action
          promptly initiated and diligently conducted, if such reserve as shall
          be required by GAAP shall have been made therefor and levy and
          execution thereon have been stayed and continue to be stayed; or

               (iii) indebtedness (other than in connection with a loan or
          lending transaction) incurred in the ordinary course of business which
          is not more than 60 days past due, including, but not limited to
          indebtedness for drilling, completing, leasing and reworking oil and
          gas wells; or

               (iv) obligations under Rate Management Transactions permitted
          pursuant to Section 13(l) hereof; or

               (v) the Subordinated Debt; or

               (vi) other indebtedness not exceeding $250,000 in the aggregate
          for Borrowers, Guarantor and Subsidiaries outstanding at any time; or

               (vii) any renewals or extensions of (but, other than in the case
          of the Notes, not increases in) any of the foregoing.

     Section 9. New Negative Covenant. Section 13 of the Credit Agreement is
hereby amended to include an additional negative covenant reading as follows:

          (r) Subordinated Debt. Neither either Borrower nor Guarantor will (i)
     amend or enter into any agreement to amend or otherwise change the
     Subordinated Loan Agreement or any agreement or instrument executed in
     connection therewith, except as permitted by Section 2.16 of the
     Intercreditor Agreement, (ii) fail to comply in any material respect with
     the provisions of the Intercreditor Agreement, or (iii) make any prepayment
     of amounts owing under the Subordinated Notes.

     Section 10. Events of Default. Section 14 of the Credit Agreement is hereby
amended to include an additional "Event of Default" reading as follows:

          (n) an Event of Default (as defined therein) shall occur under the
     terms of the Subordinated Loan Agreement or under any document or
     instrument executed in connection therewith.

     Section 11. Representations and Warranties of Borrowers and Guarantor.
Borrowers and Guarantor hereby jointly and severally represent and warrant to
Lenders as follows:

          (a) The representations and warranties contained in Section 10 of the
Credit Agreement are true and correct on and as of the date hereof as though
made on and as of the date hereof, except for those representations and
warranties which address matters only as of a particular date (which remain true
and correct as of such date).

          (b) No Event of Default or Default has occurred and is continuing
under the Credit Agreement.


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          (c) The execution, delivery and performance by Borrowers and Guarantor
of this Fourth Amendment are within the Borrowers' and Guarantor's partnership,
corporate and limited liability company powers, have been duly authorized by all
necessary action, require no action by or in respect of, or filing with, any
governmental body, agency or official and do not violate or constitute a default
under any provisions of applicable law or any material agreement binding upon
Borrowers, Guarantor or their respective Subsidiaries or result in the creation
or imposition of any Lien upon any of the assets of Borrowers, Guarantor or
their respective Subsidiaries, except Permitted Liens.

          (d) This Fourth Amendment constitutes the valid and binding obligation
of Borrowers and Guarantor enforceable in accordance with its terms except as
(i) the enforceability thereof may be limited by bankruptcy, insolvency or
similar laws affecting creditor's rights generally, and (ii) the availability of
equitable remedies may be limited by equitable principles of general
application.

     Section 12. Conditions Precedent. This Fourth Amendment shall be effective
as of the date upon which all of the following conditions have been satisfied:

          (a) Agent shall have received counterparts of this Fourth Amendment
duly executed by Borrowers, Guarantor and Lenders;

          (b) the Borrowers and Guarantor shall have provided to Agent (i) a
copy of resolutions, in form and substance satisfactory to Agent, of the Board
of Directors of PPC authorizing the execution, delivery and performance of this
Fourth Amendment and any other Loan Documents to be executed or delivered
pursuant hereto, certified by the secretary or an assistant secretary of PPC,
which certificate shall be in form and substance satisfactory to Agent and
Agent's counsel and shall state that the resolutions thereby certified have not
been amended, modified, revoked or rescinded, (ii) a copy of the resolutions, in
form and substance satisfactory to Agent, duly adopted by the respective
partners of PLP authorizing the execution, delivery and performance of this
Fourth Amendment and any other Loan Documents to be executed or delivered by PLP
pursuant hereto, certified by PLP's general partner, which certificate shall be
in form and substance satisfactory to Agent and Agent's counsel and shall state
that the resolutions thereby certified have not been amended, modified, revoked
or rescinded, and (iii) resolutions, in form and substance satisfactory to
Agent, of the managers of Guarantor authorizing the execution, delivery and
performance of this Fourth Amendment and any other Loan Documents to be executed
or delivered pursuant hereto, certified by its secretary or assistant secretary,
which certificate shall be in form and substance satisfactory to Agent and
Agent's counsel and shall state that the resolutions thereby certified have not
been amended, modified, revoked or rescinded;

          (c) The Borrowers and Guarantor shall have provided to Agent copies of
all documents, instruments, notices, reports, certificates and/or other items
executed and/or delivered by any of them in connection with the Subordinated
Loan Agreement;

          (d) The transactions contemplated by that certain Purchase and Sale
Agreement dated October 14, 2005, by and among Lynx Production Company, Inc., et
al., as Sellers, and Parallel, L.P., as Buyer (the "Purchase Agreement") shall
have been consummated upon terms and pursuant to instruments satisfactory to
Agent, and Borrowers and Guarantor shall have provided to Agent true and correct
copies of all documents, instruments and certificates delivered in connection
with such transaction;

          (e) PLP shall have executed and delivered to Agent a first and prior
deed of trust Lien on all properties acquired by PLP pursuant to the Purchase
Agreement, pursuant to instruments in form and substance satisfactory to Agent;


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          (f) The Borrowers shall have provided to Agent a certificate of
insurance coverage of the Borrowers evidencing that the Borrowers are carrying
insurance in accordance with Section 12(h) of the Credit Agreement and
reflecting that all acquired insurance policies are endorsed in favor of and
made jointly payable to Agent as its interests may appear, naming Agent and the
Lenders as "additional insureds" and providing that the insurer will give at
least thirty (30) days prior notice of any cancellation to Agent; and

          (g) Agent shall have received any other documents, certificates and
opinions in connection with this Fourth Amendment that may be requested by
Agent, in form and substance satisfactory to Agent.

     Section 13. Ratification of Credit Agreement and Other Loan Documents.
Except as expressly amended hereby, the Credit Agreement and all of the other
Loan Documents are and shall be unchanged and all of the terms, provisions,
covenants, conditions, schedules and exhibits thereof shall remain and continue
in full force and effect and are hereby ratified and confirmed by Borrowers,
Guarantor and Lenders as of the date of this Fourth Amendment as if the Credit
Agreement and the other Loan Documents were executed by Borrowers, Guarantor and
the other parties thereto as of the date of this Fourth Amendment. The
amendments contemplated hereby shall not limit or impair any Liens securing the
Loans, each of which are hereby ratified, affirmed and extended to secure the
Loans as they may be increased pursuant hereto.

     Section 14. No Waiver. Neither the execution by Lenders of this Fourth
Amendment nor anything contained herein shall in anywise be construed or operate
as a waiver by Lenders of any Default of Event of Default (whether now existing
or that may occur hereafter) or of any of Lenders' or Agent's rights under the
Credit Agreement as amended hereby or under any of the other Loan Documents.

     Section 15. Intercreditor Agreement. By its execution of this Fourth
Amendment, each Lender hereby consents to and agrees to be bound by the terms of
the Intercreditor Agreement and authorizes Agent to execute the Intercreditor
Agreement as Agent on behalf of such Lender.

     Section 16. Miscellaneous.

          16.1 Legal Expenses. The Borrowers hereby agree to pay on demand all
     reasonable fees and expenses of counsel to the Agent incurred by the Agent
     in connection with the preparation, negotiation and execution of this
     Fourth Amendment and all related documents.

          16.2 Multiple Counterparts. This Fourth Amendment may be executed in a
     number of identical separate counterparts (including by facsimile
     transmission), each of which for all purposes is to be deemed an original
     but all of which shall constitute, collectively, one agreement. No party to
     this Fourth Amendment shall be bound hereby until a counterpart of this
     Fourth Amendment has been executed by all parties hereto.

          16.3 Reference to Agreement. Each of the Loan Documents is hereby
     amended so that any reference in the Loan Documents to the Credit Agreement
     shall mean a reference to the Credit Agreement as amended hereby.

          16.4 Governing Law. This Fourth Amendment is being executed and
     delivered, and is intended to be performed, in Midland, Midland County,
     Texas, and the substantive laws of Texas shall govern the validity,
     construction, enforcement and


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     interpretation of this Fourth Amendment and all other documents and
     instruments referred to herein, unless otherwise specified therein.

          16.5 Plural and Singular Forms. The definitions given to terms defined
     hereby shall be equally applicable to both the singular and plural forms of
     such terms.

          16.6 Final Agreement. THIS FOURTH AMENDMENT, THE CREDIT AGREEMENT AND
     THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES
     AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
     SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
     AGREEMENTS BETWEEN THE PARTIES.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]


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     IN WITNESS THEREOF, Borrowers, Guarantor and Lenders have caused this
Fourth Amendment to be duly executed as of the day and year first above written.

BORROWERS:                              PARALLEL PETROLEUM CORPORATION,
                                        a Delaware corporation


                                        By: /s/ Steven D. Foster
                                            ------------------------------------
                                            Steven D. Foster
                                            Chief Financial Officer


                                        PARALLEL, L.P., a Texas limited
                                        partnership

                                        By: Parallel Petroleum Corporation,
                                            Its General Partner


                                        By: /s/ Steven D. Foster
                                            ------------------------------------
                                            Steven D. Foster
                                            Chief Financial Officer


GUARANTOR:                              PARALLEL, L.L.C., a Delaware limited
                                        liability company


                                        By: /s/ Steven D. Foster
                                            ------------------------------------
                                            Steven D. Foster
                                            Chief Financial Officer

                  [SIGNATURE PAGE TO FOURTH AMENDMENT TO SECOND
                     AMENDED AND RESTATED CREDIT AGREEMENT]


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LENDERS:                                CITIBANK TEXAS, N.A. a national banking
                                        association, as Joint Lead Arranger and
                                        Administrative Agent and as a Lender


                                        By: /s/ Frank K. Stowers
                                            ------------------------------------
                                            Frank K. Stowers
                                            Senior Vice President

                 [SIGNATURE PAGE TO FOURTH AMENDMENT TO SECOND
                     AMENDED AND RESTATED CREDIT AGREEMENT]


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                                        BNP PARIBAS, as Joint Lead Arranger and
                                        Syndication Agent and as a Lender


                                        By: /s/ Brian Malone
                                            ------------------------------------
                                        Name: Brian Malone
                                        Title: Managing Director


                                        By: /s/ Gabe Ellisor
                                            ------------------------------------
                                        Name: Gabe Ellisor
                                        Title: Vice President

                  [SIGNATURE PAGE TO FOURTH AMENDMENT TO SECOND
                     AMENDED AND RESTATED CREDIT AGREEMENT]


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                                        WESTERN NATIONAL BANK,
                                        as a Lender


                                        By: /s/ Wesley D. Bownds
                                            ------------------------------------
                                            Wesley D. Bownds
                                            Senior Vice President

                  [SIGNATURE PAGE TO FOURTH AMENDMENT TO SECOND
                     AMENDED AND RESTATED CREDIT AGREEMENT]


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                                        CITIBANK, F.S.B.,
                                        as a Lender


                                        By: /s/ Christopher Webb
                                            ------------------------------------
                                        Name: Christopher Webb
                                        Title: Senior Vice President

                  [SIGNATURE PAGE TO FOURTH AMENDMENT TO SECOND
                     AMENDED AND RESTATED CREDIT AGREEMENT]


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