FIRST SUPPLEMENTAL INDENTURE

FIRST SUPPLEMENTAL INDENTURE dated as of September 18, 2009 (this “Supplemental Indenture”), to the Indenture dated as of June 8, 2007 (the “Original Indenture”) among Energy XXI Gulf Coast, Inc., a Delaware corporation (the “Company”), each of the Guarantors party thereto and Well Fargo Bank, National Association, as trustee (the “Trustee”).

WHEREAS, the Company, the Guarantors and the Trustee have heretofore executed and delivered the Original Indenture, and the Company has issued pursuant to the Original Indenture its 10% Senior Notes due 2013 (the “Notes”);

WHEREAS, Section 9.02 of the Original Indenture provides that with the consent of the Holders (as defined in the Original Indenture) of at least a majority in aggregate principal amount of the then outstanding Notes voting as a single class (including, without limitation, consents obtained in connection with a tender offer or exchange offer for, or purchase of the Notes), the Guarantors and the Trustee may amend or supplement the Original Indenture, subject to certain limitations set forth in the Original Indenture;

WHEREAS, the Company has solicited the consents of the Holders of the Notes pursuant to the confidential offering circular and consent solicitation statement dated September 4, 2009 (as the same may be amended or supplemented from time to time, the “Offering Circular”), and the related letter of transmittal and consent dated September 4, 2009 (as the same may be amended or supplemented from time to time, the “Letter of Transmittal” and, together with the Offering Circular, the “Offering Documents”), to the proposed amendments to the Original Indenture upon the terms and conditions set forth therein (the “Amendments”);

WHEREAS, the Company has received and delivered or caused to be delivered to the satisfaction of the Trustee the consents of the Holders of at least a majority in outstanding principal amount of the Notes to the Amendments in accordance with the Offering Documents;

WHEREAS, pursuant to Section 9.06 of the Original Indenture, the execution of this Supplemental Indenture has been duly authorized by a resolution of the Board of Directors of the Company;

WHEREAS, all conditions and requirements necessary to make this Supplemental Indenture a valid, binding and legal instrument in accordance with its terms have been performed and fulfilled by the parties hereto and the execution and delivery thereof have been in all respects duly authorized by the parties hereto; and

WHEREAS, the Amendments contained herein will become operative (the “Operative Date”) upon the acceptance for exchange of at least a majority in outstanding principal amount of the Notes that are validly tendered and not withdrawn on or prior to the Expiration Date (as defined in the Offering Documents).

NOW, THEREFORE, in consideration of the premises and the covenants and agreements contained herein, and for other good and valuable consideration the receipt of which is hereby acknowledged, the Company and the Trustee hereby agree as follows:

Section 1.1       Definitions.

Capitalized terms used in this Supplemental Indenture and not otherwise defined herein shall have the meanings assigned to such terms in the Original Indenture.

Section 2.1       Amendment  of Certain Definitions in Article 1 of the Original Indenture.

(a)   Section 1.01 of the Original Indenture is hereby amended by adding the following definitions of terms, which shall read in their entirety as follows:

“ Collateral ” means all property mortgaged under the Mortgages and any other assets or other right or other property, whether now owned or hereafter acquired, upon which a Lien securing the Obligations under the Second Lien Notes Indenture, the Second Lien Notes or the Second Lien Notes Guarantees is granted or purported to be granted under the Security Agreement or any other Collateral Agreement.

“ collateral agent ” means the party named as such in the Second Lien Notes Indenture until a successor replaces it in accordance with the provisions of the Second Lien Notes Indenture and thereafter means such successor.

“ Collateral Disposition ” means any sale, transfer or other disposition to the extent involving assets or other rights or property that constitute Collateral under the Security Documents.  The sale or issuance of Equity Interests in a Restricted Subsidiary that owns Collateral such that it thereafter is no longer a Restricted Subsidiary shall be deemed to be a Collateral Disposition of the Collateral owned by such Restricted Subsidiary.

“ First Lien Agent” means the Administrative Agent and any successor designated as such by the holders of First Lien Claims.

“ First Lien Claims ” means (1) Indebtedness under the Credit Agreement permitted pursuant to clause (1) of the definition of the term “Permitted Debt,” (2) First Lien Hedging Obligations, and (3) all other Obligations under the documents relating to Indebtedness described in clauses (1) and (2) above.

“ Intercreditor Agreement ” means the Intercreditor Agreement to be entered into concurrently with the Second Lien Notes Indenture, among the First Lien Agent, the trustee under the Second Lien Notes Indenture and the collateral agent, the Company, Energy XXI (USA), Inc. and the Subsidiaries giving Second Lien Guarantees, as same may be amended, supplemented, restated or replaced from time to time.

“ First Lien Hedging Obligations ” means all Hedging Obligations secured by any Collateral under the documents that secure Obligations under the Credit Agreement.

“ Mortgages ” means the mortgages, deeds of trust, deeds to secure Indebtedness or other similar documents granting Liens on the Company’s and its Restricted Subsidiaries’ Oil and Gas Assets to secure the Second Lien Notes and the Second Lien Guarantees.

“ PIK Notes ” means any Second Lien Notes issued in partial payment of interest on Second Lien Notes of any series.

“ PIK Payment ” means any increase in the principal amount of Second Lien Notes in partial payment of interest on Second Lien Notes of any series.

“ Second Lien Agent ” means the collateral agent.

“ Second Lien Claims ” means (1) Indebtedness under the Second Lien Notes of any series, including any issued or added to the principal amount thereof in payment of interest thereon, and the Guarantees permitted pursuant to clause (3) of the definition of the term Permitted Debt and (2) all other Obligations related to the Indebtedness described in clause (1) above.

“ Second Lien Guarantees ” means any guarantee of the Company’s Payment Obligations under the Second Lien Indenture and the Second Lien Notes.

“ Second Lien Notes Indenture ” means the indenture among the Company, the guarantors parties thereto and the Second Lien Notes Trustee, relating to the Second Lien Notes.

“ Second Lien Notes ” means the Company’s 16% Second Lien Junior Secured Notes due 2014 of any series, including any additional Second Lien Notes issued or added to the principal amount thereof in payment of interest on any such series.

“ Second Lien Notes Trustee ” means the party named as such in the Second Lien Notes Indenture until a successor replaces it in accordance with the provisions of the Second Lien Notes Indenture and thereafter means such successor.

“ Secured Obligations ” means the First Lien Claims and Second Lien Claims.

“ Secured Parties ” means the holders of the First Lien Claims, the First Lien Agent, the holders of the Second Lien Claims, the collateral agent, the Second Lien Notes Trustee and the Holders of the Second Lien Notes.

“ Security Agreement ” means one or more Second Lien Security Agreements, dated as of the issue date of the Second Lien Notes, made by the Company and certain Guarantors in favor of the collateral agent for the benefit of the Holders of the Second Lien Notes, as amended or supplemented from time to time in accordance with its terms.

“ Security Documents ” means any one or more of the Intercreditor Agreement, the Security Agreement, each Mortgage and any other security agreements, pledge agreements, mortgages, deeds of trust or other grants or transfers for security executed and delivered by the Company, the guarantors parties thereto or any other obligor under the Second Lien Notes Indenture creating, or purporting to create, a Lien upon Collateral in favor of the collateral agent for the benefit of the Holders of the Second Lien Notes, in each case as amended, modified, renewed, restated or replaced, in whole or part, from time to time, in accordance with its terms.

“ Specified Ratios ” means, collectively, (a) the Company’s Fixed Charge Coverage Ratio for the most recently ended four full fiscal quarters for which internal financial statements are available, (b) the Company’s Total Leverage Ratio (as defined in the Credit Agreement as in effect on the issue date of the Second Lien Notes) as of the most recent balance sheet date for which internal financial statements are available, and (c) the ratio of the Company’s Total Debt to Proven Reserves (as each such term is defined in the Credit Agreement as in effect on the issue date of the Second Lien Notes).  For purposes of the calculations in clause (c), (i) Total Debt will be as of the most recent balance sheet date for which internal financial statements are available and (ii) Proven Reserves will be as set forth in the Company’s year-end reserve report in accordance with the definition of “ACNTA,” prepared by the Company and one or more of the Company’s independent petroleum engineers as of the last date of the Company’s most recent fiscal year, as adjusted for subsequent acquisitions, dispositions, discoveries, extensions or revisions, if any, as provided for in the definition of “ACNTA.”

(b)      Section 1.01 of the Original Indenture is hereby amended by amending the following definitions of terms, which shall read in their entirety as follows.

“Permitted Liens” means:

Notwithstanding the foregoing, the aggregate principal amount of the Indebtedness secured by the Permitted Liens shall not exceed the sum of (1) the aggregate principal amount of the Second Lien Notes, (2) the aggregate principal amount of Indebtedness available to be borrowed under the Credit Facilities at the time such Indebtedness was incurred, (3) Hedging Obligations, (4) Indebtedness incurred pursuant to clause (13) of the definition of Permitted Debt set forth in Section 4.09 of this Indenture for the purposes set forth therein and (5) Capital Lease Obligations not to exceed $10.0 million in aggregate principal amount.

Section 2.2   Amendment of Certain Provisions in Article 4 of the Original Indenture.

Section 4.08.   Dividend and Other Payment Restrictions Affecting Subsidiaries .

The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create or permit to exist or become effective any consensual encumbrance or restriction on the ability of any Restricted Subsidiary to: