Amendment To Uboc Credit Facility

Exhibit 10.6 Execution Copy AMENDMENT NO. 3 This Amendment No. 3 dated as of April 4, 2008 (" Amendment" ) is among Callon Petroleum Company, a Delaware corporation (" Borrower" ), the Lenders, and Union Bank of California, N.A., as administrative agent (" Administrative Agent" ). INTRODUCTION A. The Borrower, the Lenders, and the Administrative Agent are parties to the Amended and Restated Credit Agreement dated as of August 30, 2006, as amended by Amendment No. 1 dated as of April 18, 2007 and Amendment No. 2 dated as of December 31, 2007 (" Credit Agreement" ). B. The Borrower has requested and the Majority Lenders have agreed to make certain amendments to the Credit Agreement. THEREFORE, the Borrower, the Majority Lenders and the Administrative Agent hereby agree as follows: Section 1. Definitions . Unless otherwise defined in this Amendment, each term used in this Amendment that is defined in the Credit Agreement has the meaning assigned to such term in the Credit Agreement. Section 2. Amendments . (a) Section 1.02 of the Credit Agreement is hereby amended as follows: (i) The definitions of the terms " Entrada Entity" and " Permitted Entrada Transaction" are hereby amended and restated, in their respective entireties, to read as follows:" Entrada Entity" means Callon Entrada Company, a Delaware corporation." Permitted Entrada Transaction" means (i) the sale, conveyance and assignment by the Borrower or any of its Subsidiaries of a portion of the Entrada Assets to CIECO in accordance with the terms of the CIECO PSA and the other CIECO PSA Documents, (ii) the contribution by the Borrower and/or CPOC of all or any portion of its remaining ownership interests in the Entrada Assets to the Entrada Entity, which contribution may occur either prior to, contemporaneously with or after the sale, conveyance and assignment contemplated in the immediately preceding clause (i), which Entrada Entity and/or its assets may be managed or operated under one or more management services agreements, contract operating agreements or similar agreements with the Borrower or any of its Subsidiaries, including, without limitation, CPOC, (iii) the incurrence by the Entrada Entity of Debt, the proceeds of which are to be used to fund the costs and expenses incurred to develop and/or produce its interests in the Entrada Assets pursuant to and in accordance with the CIECO Credit Agreement and the other CIECO Loan Documents, (iv) the granting of Liens on (w) the Entrada Assets, (x) all other assets of the Entrada Entity, (y) the equity interests of the Entrada Entity, and/or (z) any segregated deposit accounts established and maintained by Borrower or any of its Subsidiaries to hold only loan proceeds of such Debt pending


disbursement and/or any revenues and proceeds of production or other amounts attributable to the Entrada Assets or the Entrada Entity, in each case to secure such Debt, and (v) the contribution or advance by the Borrower or any of its other Subsidiaries of additional cash or other assets to the Entrada Entity from time to time not to exceed, in the aggregate at any time outstanding, the greater of (x) the aggregate amount of dividends, distributions or repayment of advances made by the Entrada Entity to the Borrower or any of its other Subsidiaries net of any outstanding contributions or advances previously made under this clause (v), and (y) $10,000,000, and (vi) the indemnification of any Person against loss from the failure of the Entrada Entity to comply with, or the guarantee of performance by the Entrada Entity of, certain of its obligations arising under or related to the documents and agreements evidencing or governing its Debt or relating to the development and operations of its assets (other than the obligation of the Entrada Entity to repay the principal and interest of the Debt described in clause (iii) of this definition) by the Borrower or any of its other Subsidiaries in accordance with the terms of the CIECO Loan Documents." (ii) The following new definitions will be added in correct alphabetical order therein as follows:" CIECO" means CIECO Energy (Entrada) LLC, a Delaware limited liability company." CIECO Credit Agreement" means that certain Credit Agreement executed by the Entrada Entity and CIECO in connection with the consummation of the transactions contemplated by the CIECO PSA, as the sam ...