RE: Waiver, Consent and Forbearance Agreement (?Agreement?) relating to Amended and Restated Credit Agreement

Exhibit 10.1

STERLING BANK

2550 NORTH LOOP WEST, SUITE 100

HOUSTON, TEXAS 77092

November 10, 2006

Lothian Oil Inc.

500 Fifth Ave., Suite 2600

New York, NY 10110

Attention: Scott Wilson

By execution of this Agreement, Borrower acknowledges that certain Events of Default have occurred as a result of Borrower’s failure to timely deliver its Financial Statements for the periods ending March 31, 2006 and June 30, 2006 (“ Financial Statement Defaults ”). Additionally, Borrower acknowledges that an Event of Default has occurred as a result of Borrower’s failure to comply with the financial covenant under Section 6.14 of the Credit Agreement regarding its Current Ratio (the “ Current   Ratio Default ”). Finally, Borrower has informed Sterling Bank that it will be unable to deliver the Financial Statements to Sterling Bank for the quarter ending September 30, 2006 as required under Section 5. 2 of the Credit Agreement.

Borrower hereby requests that Sterling Bank (i) waive the Events of Default with regard to the Financial Statement Defaults, (ii) forbear from exercising any remedies under the Credit Agreement with regard to the Current Ratio Default and (iii) consent to late delivery of the September 30, 2006 Financial Statements.

Sterling Bank hereby (i) waives the Events of Default solely with regard to the Financial Statement Defaults, (ii) agrees to forbear from exercising any of its rights or remedies under the Credit Agreement or the other Loan Documents, solely as of the result of the Current Ratio Default but only until the fiscal quarter ending September 30, 2006 (the “ Forbearance Period ”) and (iii) consents to the late delivery date of the September 30, 2006 quarter-ending Financial Statements but only until December 1, 2006 (the “ Consent Period ”).

Notwithstanding the foregoing, the waivers, the forbearance and the consent (collectively, the “ Accommodations &#822