FORBEARANCE AND AMENDMENT AGREEMENT

Exhibit 10.1

Execution Copy

FORBEARANCE AND AMENDMENT AGREEMENT

     THIS FORBEARANCE AND AMENDMENT AGREEMENT (the “ Agreement ”) is made as of September 3, 2009, by and among THE MERIDIAN RESOURCE CORPORATION, a Texas corporation (the “ Borrower ”), the undersigned Guarantors (the “ Guarantors ”), the several banks, financial institutions and other entities from time to time parties to the Credit Agreement (as defined below) (collectively, the “ Lenders ”), and FORTIS CAPITAL CORP. (“ Fortis ” or the “ Administrative Agent ”), as administrative agent for the Lenders.

RECITALS :

     WHEREAS, the Borrower, Fortis as Administrative Agent, and the Lenders have entered into an Amended and Restated Credit Agreement dated as of December 23, 2004, as amended by that certain First Amendment to Credit Agreement dated as of February 25, 2008, and further amended by that certain Second Amendment to Credit Agreement dated as of December 19, 2008 (as so amended, the “ Credit Agreement ”);

     WHEREAS, as of the date hereof certain Events of Default have occurred and are continuing, or are anticipated to occur, under the Credit Agreement as set forth in Appendix I to this Agreement (the “ Designated Events of Default ”);

     WHEREAS, the Borrower acknowledges and agrees that as a result of the occurrence of the Designated Events of Default: (i) the Administrative Agent and the Lenders are entitled to accelerate the Obligations, to seek immediate payment in full of the Obligations, and to exercise their rights and remedies under the Loan Documents; and (ii) the Lenders have no obligation to make further Loans or otherwise extend credit to the Borrower under the Loan Documents or otherwise; and

     WHEREAS, the Borrower has requested that the Administrative Agent and Lenders forbear from accelerating the Obligations and from taking present action to collect payment in full of the Obligations, and from exercising any other rights and remedies under the Loan Documents with respect to the Designated Defaults, and the Administrative Agent and Lenders have agreed to do so under the terms and conditions set forth in this Agreement.

     NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and intending to be legally bound, each of the Administrative Agent, the Lenders, the Borrower and the Guarantors agree as follows:

     1.  Definitions .

     (a) Certain Capitalized Terms . Capitalized terms defined in the Recitals section of this Agreement are incorporated herein by this reference and are used herein as so defined. Capitalized terms used and not defined in this Agreement (including in the Recitals section of this Agreement) shall have the meanings assigned to such terms in the Credit Agreement.

     (b) Additional Definitions . As used herein, the following terms shall have the respective meanings given to them below:

     “ Borrower Merger Agreement ” means an agreement, subject to the approval of the Required Lenders, pursuant to which the Borrower will merge with or into or be acquired by or transfer all or substantially all of its assets to another Person, which transaction shall be consummated no later than October 30, 2009 (unless otherwise agreed by the Required Lenders pursuant to Section 10(b) hereof).

     “ Capital Expenditures ” means the sum of the aggregate amount of all expenditures of the Credit Parties for fixed or capital assets that, in accordance with GAAP, would be classified as capital expenditures.

     “ Capital Infusion Agreement ” means an agreement, subject to the approval of the Required Lenders, pursuant to which one or more Persons will contribute capital to the Borrower (which contribution may take the form of the purchase of capital stock or a subordinated loan), which contribution shall be consummated no later than October 30, 2009 (unless otherwise agreed by the Required Lenders pursuant to Section 10(b) hereof), in an amount sufficient to enable the Borrower to prepay the Revolving Credit Loans in an amount equal to 100% of the Borrowing Base Deficiency set forth in Section 3 hereof.

     “ CIT ” has the meaning assigned to it in Section 6(a) of this Agreement.

     “ CIT Loan Agreement ” means that Credit Agreement dated as of May 1, 2008, by and among TMR Drilling Corporation, as borrower, the CIT Group/Equipment Financing, Inc., as administrative agent, and the lenders party thereto.

     “ CIT Prepayment ” has the meaning assigned to it in Section 6(a) of this Agreement.

     “ Credit Parties ” means the Borrower and each Guarantor.

     “ Designated Events of Default ” has the meaning first set forth above.

     “ Excess Cash Flow ” means an amount equal to (i) the lowest projected cash balance on hand for each month during the Forbearance Period as set forth in the cash flow budget furnished to the Administrative Agent pursuant to Section 6(k)(v) hereof, less (ii) $2.0 million.

     “ Forbearance Default ” means each of the occurrences set forth in Section 11 of this Agreement.

     “ Forbearance Period ” has the meaning assigned to it in Section 2(a) of this Agreement.

     “ Guarantee ” has the meaning assigned to it in Section 8(e) of this Agreement.

     “ Lender Prepayment ” has the meaning assigned to it in Section 7(a) of this Agreement.

     “ Orion ” means Orion Drilling Company, LLC, a Texas limited liability company.

     “ Orion Day Work Rig Contracts ” means (i) that certain Drilling Bid Proposal and Daywork Drilling Contract — U.S., dated as of February 12, 2007, by and between The Meridian Resource & Exploration LLC, a Delaware limited liability company, and Orion, and (ii) that certain Drilling Bid Proposal and Daywork Drilling Contract — U.S., dated as of August 9, 2007, as amended by letter dated September 4, 2008, by and between The Meridian Resource & Exploration LLC, a Delaware limited liability company, and Orion Drilling Company, LP, a Texas limited partnership.

     “ Orion Transaction ” means the transaction among the Borrower, TMR Drilling, CIT and Orion described in Appendix II of this Agreement.

     “ Purchase and Sale Agreement ” means an agreement, subject to the approval of the Required Lenders, pursuant to which the Credit Parties agree to sell one or more Oil and Gas Properties, which sale shall be consummated no later than October 30, 2009 (unless otherwise agreed by the Required Lenders pursuant to Section 10(b) hereof) for net proceeds sufficient to prepay the Revolving Credit Loans in an amount equal to 100% of the Borrowing Base Deficiency set forth in Section 3 hereof, plus any incremental Borrowing Base Deficiency resulting from such sales.

     “ Released Parties ” has the meaning assigned to it in Section 13 of this Agreement.

     “ Shell ” has the meaning assigned to it in Section 6(i) of this Agreement.

     “ TMR Drilling ” has the meaning assigned to it in Section 6(a) of this Agreement.

     2.  Agreement to Forbear .

     (a) Forbearance . During the period (the “ Forbearance Period ”) commencing on the Effective Date (as defined below) and ending on the earlier to occur of: (i) 5:00 p.m. (Central Time) on the earlier of (x) the date which is 91 days following the consummation of the Orion Transaction, or (y) December 4, 2009, subject to Section 2(b) hereof; or (ii) the date that any Forbearance Default occurs, and subject to the other terms and conditions of this Agreement, the Administrative Agent and Lenders agree that they

will forbear from exercising any right or remedy arising as a result of the Designated Events of Default, in consideration of the Borrower’s agreements, covenants, releases and waivers contained in this Agreement. Upon the expiration or termination of the Forbearance Period: (x) such forbearance shall automatically terminate, and (y) the Administrative Agent and Lenders shall be entitled to exercise any and all of their rights and remedies under this Agreement, the Credit Agreement and the other Loan Documents without further notice.

     (b) Upon the consent of the Required Lenders to extend the date for consummation of the transactions contemplated by the Borrower Merger Agreement, Capital Infusion Agreement, or Purchase and Sale Agreement pursuant to Section 10(b) hereof, the Required Lenders shall be deemed to have consented to the extension of and the Forbearance Period shall be automatically extended for an equivalent period of time. Except as expressly provided herein, the Borrower agrees that the Administrative Agent and Lenders shall have no obligation to extend the Forbearance Period.

     (c) Extension of Borrowing Base Deficiency Payment . In addition to the forbearance set forth in Section 2(a) above, the Administrative Agent and Lenders agree to extend the date for compliance with Section 4.10 of the Credit Agreement (payment of the Borrowing Base Deficiency set forth in Section 3 hereof) until the termination or expiration of the Forbearance Period.

     (d) No Waiver, Restatement or Amendment . Notwithstanding the Administrative Agent’s and Lenders’ agreement to forbear set forth in Section 2(a) above: (i) such forbearance by the Administrative Agent and Lenders is not intended, shall not constitute, and shall not be construed or interpreted to constitute a waiver of the Designated Events of Default, or of any other default which may now or hereafter exist under the Loan Documents, (ii) this Agreement and such forbearance by the Administrative Agent and Lenders shall not constitute a restatement of the indebtedness evidenced by the Notes and secured by the Security Documents; and (iii) this Agreement and such forbearance by the Administrative Agent and Lenders shall not constitute an amendment or modification of the Loan Documents, except as expressly provided for herein. Except as expressly provided for herein, (x) the terms and conditions of the Credit Agreement and any other Loan Document are and shall remain in full force and effect, and the same are hereby ratified and confirmed by the Credit Parties in all respects, and (y) the Administrative Agent and Lenders reserve all rights, privileges and remedies granted under the Credit Agreement and the other Loan Documents, this Agreement and any other contract or instrument between any Credit Party, Administrative Agent and/or Lenders, and such rights, privileges and remedies may, at the Administrative Agent’s or Lenders’ sole election, be exercised at any time and from time to time and without notice, except to the extent notice is required (and is not waived) under the Loan Documents.

     (e) No Future Loans . The Borrower acknowledges that nothing in this Agreement shall be construed as creating any obligation whatsoever on the part of the Administrative Agent and Lenders to make any Loans or other extensions of credit to or for the benefit of the Borrower.

     3.  Outstanding Indebtedness . The Borrower hereby acknowledges and confirms that as of the date of this Agreement, (a) the outstanding aggregate principal amount of the Revolving Credit Commitment of all the Lenders (including, without limitation, all undrawn amounts in respect of outstanding Letters of Credit) is $94.5 million; (b) a Borrowing Base Deficiency exists in the amount of $34.5 million; and (c) the payment of such amounts set forth in clauses (a) and (b) above is not subject to any defenses, counterclaim, recoupment or offset of any kind.

     4.  Reserved .

     5.  Forbearance Fee . In consideration of the agreements set forth herein, the Lenders party to this Agreement shall be entitled to a forbearance fee of 1.00% of the aggregate outstanding Obligations of the Borrower as of the date of this Agreement payable to the Administrative Agent for the ratable benefit of such Lenders. Such forbearance fee shall be fully earned as of the date of this Agreement, but shall be payable as follows: (i) one-quarter on the effectiveness of this Agreement, (ii) one-quarter on the date which is one month thereafter, (iii) one-quarter on the date which is two months thereafter, and (iv) any unpaid amount of such fee on the date the Forbearance Period terminates.

     6.  Amendments to the Credit Agreement . The Borrower, Administrative Agent and the Lenders agree that the Credit Agreement will be amended as follows:

     (a) CIT Loan Agreement . Neither TMR Drilling Corporation, a Texas corporation (“ TMR Drilling ”), the Borrower nor any other Subsidiary of the Borrower shall make any prepayment or repayment of principal to the CIT Group/Equipment Financing, Inc. (“ CIT ”) under the CIT Loan Agreement, except that TMR Drilling may make a prepayment of up to $1.0 million to CIT (the “ CIT Prepayment ”) pursuant to the CIT Loan Agreement following the sale of undeveloped Properties not included in the Borrowing Base which results in net proceeds to the Borrower or its affiliates sufficient to make such CIT Prepayment and the Lender Prepayment pursuant to Section 4.5(a) of the Credit Agreement; provided that, such CIT Prepayment is made upon or after the execution and delivery of the documents evidencing the Orion Transaction on terms and conditions satisfactory to the Required Lenders which are generally set forth in Appendix II to this Agreement.

     (b) Payments to CIT . For each calendar month after the date hereof, provided that the Lenders have received the monthly payment due for such month under Section 7 of this Agreement, TMR Drilling may make an additional payment of principal and interest to CIT under the CIT Loan Agreement for such month in an amount not to exceed $220,000.00 per month.

     (c) Capital Expenditures . No Credit Party shall make cumulative Capital Expenditures during the Forbearance Period in excess of 115% of the capital expenditure amounts set forth in the cash flow budgets furnished to the Administrative Agent pursuant to Section 6(k)(v) below.

     (d) Meetings with Borrower . At the request of the Administrative Agent or the Required Lenders, the Borrower shall make available to the Lenders at least once a

month its senior officers to discuss the Borrower’s operations and its efforts to accomplish the transactions described in Section 10(a) hereof.

     (e) Borrowing Base Compliance . Section 4.10 of the Credit Agreement is amended in its entirety to read as follows:

     “4.10 Borrowing Base Compliance .

     (a) If at any time the Aggregate Revolving Credit Exposure of the Lenders exceeds the Borrowing Base then in effect (any such excess, the ‘ Borrowing Base Deficiency ’) (including as a result of a redetermination in connection with the incurrence of Subordinated Indebtedness provided for in Section 8.2(f) ), the Administrative Agent shall promptly notify the Borrower of such Borrowing Base Deficiency. Within ten (10) days from the date of such notification, the Borrower shall notify the Administrative Agent that the Borrower elects to take one of the following actions:

     (i) Execute and deliver to the Administrative Agent within thirty (30) days of such election supplemental or additional Security Documents, in form and substance reasonably satisfactory to the Administrative Agent and its counsel, securing payment of the Notes and the other Obligations and covering additional Oil and Gas Properties owned by the Borrower or any of its Subsidiaries which are not then included in the Borrowing Base having a value (determined by the Administrative Agent in its sole discretion) sufficient to eliminate the Borrowing Base Deficiency;

     (ii) Make a payment with respect to the Obligations within thirty (30) days of such election (which shall be applied, or held for application, as the case may be, by the Administrative Agent to the payment of the aggregate unpaid principal amount of those Loans then outstanding and then Letter of Credit Outstandings) in an aggregate principal amount sufficient to eliminate such Borrowing Base Deficiency; or

     (iii) Make three (3) consecutive prepayments of principal of the outstanding Loans, each of which shall be in an amount equal to one-third of the amount of the Borrowing Base Deficiency, commencing within thirty (30) days of such election, and continuing on (or, at the Borrower’s option, before) the same day of each succeeding month thereafter until such Borrowing Base Deficiency has been eliminated by such prepayments.

     (b) Failure of the Borrower to make the election provided for in subsection (a) above, or failure of the Borrower, having made such election, to deliver the Security Documents or make any payment required

under subsection (a) above, as applicable, shall be considered an Event of Default under Section 9 hereof.”

     (f) Limitation on Indebtedness . Subsection 8.2(i) of the Credit Agreement is amended in its entirety to read as follows and a new Section 8.2(j) is added to the Credit Agreement as follows:

     “(i) Indebtedness incurred by the Borrower or any of its Subsidiaries to finance insurance premiums related directly or indirectly to their drilling operations and insurance customary to the Borrower’s business operations (including, without limitation, directors and officers liability coverage), each as consistent with past practices; and

     (j) Indebtedness of the Borrower and its Wholly-Owned Subsidiaries created, incurred or assumed after August 11, 2009 not otherwise permitted pursuant to this Section 8.2 , provided that the aggregate outstanding principal amount of such Indebtedness shall not exceed $500,000.00 at any one time outstanding.”

     (g) Limitation on Sale of Assets . Subsection 8.6(d) of the Credit Agreement is amended in its entirety to read as follows:

     “(d) the Disposition of any Oil and Gas Properties included in the Borrowing Base, provided that (i) a portion of the Net Proceeds of such Disposition equal to the amount by which the Borrowing Base has been reduced pursuant to Section 4.9(f) as a result of such Disposition shall be applied within three Business Days after the receipt of such Net Proceeds toward the prepayment of the Loans, and (ii) the aggregate value (determined by reference to the most recent Reserve Report) of all Oil and Gas Properties so Disposed of in any fiscal year of the Borrower shall not exceed 10% of the most recent and effective Borrowing Base;”

     (h) Limitation on Dividends . Notwithstanding any provision in Section 8.7(b) of the Credit Agreement, the Borrower may not redeem or repurchase any part of its Capital Stock.

     (i) Limitation on Investments . Section 8.8(k) of the Credit Agreement is amended in its entirety as follows:

“To the extent constituting an Investment, payment obligations of the Borrower with respect to the Borrower’s obligations under the CIT Loan Agreement in connection with the sale and transfer of TMR Drilling’s interest in the Triton Drilling Rig to Orion.”

     (j) Events of Default . Section 9(e) of the Credit Agreement is amended by substituting “$1,000,000” for “$4,000,000” at each place where the latter term appears in such section.

     (k) Shell Arbitration . No Credit Party shall make any payment or transfer of Property, without the prior approval of the Required Lenders, to SWEPI, LP or Shell Oil Company (together, “ Shell ”), by way of settlement or otherwise, relating to the arbitration proceeding involving Shell’s claim for indemnification for costs and expenses in connection with the Purchase and Sale Agreement dated effective October 1, 1997 between Shell Western E&P Inc. and The Meridian Resource Exploration Company and the Agreement and Plan of Merger dated March 27, 1998 by and among the Borrower LOPI Acquisition Corp., Shell Louisiana Onshore Properties, Inc, and Louisiana Onshore Properties, Inc.

     (l) Reporting Requirements . In addition to the reporting and notification requirements set forth in Section 7 of the Credit Agreement, the Borrower shall furnish to the Administrative Agent and to each of the Lenders:

     (i) within 45 days after the end of each calendar month commencing September 15, 2009 for July 2009, an unaudited balance sheet and income statement for such month (i.e. July 2009) and projections for the month in which delivery thereof is made (i.e. September 2009) in the same form as the financial information furnished to the Administrative Agent on April 15, 2009, including a variance analysis comparing actual results to budgets delivered pursuant to clause (v) below with explanations as to material variances.

     (ii) within 20 days of the end of each calendar month commencing September 20, 2009 for August 2009, a monthly liquidity report for such month (i.e. August 2009) which shall include information on accounts receivable aging and accounts payable aging, and a list of the cash balances of the Borrower and its Subsidiaries.

     (iii) on the 15 ^th and last day of each calendar month, commencing September 15, 2009, a status report on the transactions described in Section 10(a) below.

     (iv) on the 15 ^th and last day of each calendar month, commencing September 15, 2009, a production report specifying the estimated net volumes of the oil and gas produced by the Borrower and its Subsidiaries for the fifteen (15) day period ending fifteen (15) days prior to the such applicable reporting date.

     (v) no later than ten (10) days prior to the first Business Day of each month, a cash flow budget, subject to the approval of the Administrative Agent, for the three-month period commencing with such month, and on or before Friday of each week, a budget-to-actual report for the previous week, the form of such cash flow budget and the form of such budget-to-actual report to be approved by the Administrative Agent.

     (m) Bank Accounts . With the exception of the account at Comerica Securities noted on Appendix III hereto, the Borrower shall not have, at any time, any bank accounts which are not subject to a perfected security interest in favor of the Banks by

virtue of a three-party control agreement in form and substance satisfactory to the Banks, or by virtue of any other method of perfection satisfactory to the Banks. Further, not later than September 15, 2009, the Borrower shall close or cause to be closed those accounts at JPMorgan Chase Bank (Texas) noted on Appendix III hereto.

     7.  Payments by the Borrower .

     (a) Upon the effectiveness of this Agre