EIGHTH AMENDMENT TO CREDIT AGREEMENT

Exhibit 10.1

EXECUTION VERSION

EIGHTH AMENDMENT TO CREDIT AGREEMENT

EIGHTH AMENDMENT TO CREDIT AGREEMENT (this “ Amendment ”) dated as of April 22, 2009, by and among CARRIZO OIL & GAS, INC., a Texas corporation (“ Borrower ”), certain SUBSIDIARIES OF BORROWER, as Guarantors (in such capacity, “ Guarantors ”), the LENDERS party hereto (the “ Lenders ”), and GUARANTY BANK, as administrative agent for the Lenders (in such capacity, the “ Administrative Agent ”). Unless otherwise expressly defined herein, capitalized terms used but not defined in this Amendment have the meanings assigned to such terms in the Credit Agreement (as defined below).

WITNESSETH:

WHEREAS, Borrower, Guarantors, the Administrative Agent and certain Lenders have entered into that certain Credit Agreement, dated as of May 25, 2006 (as the same has been and may hereafter be amended, restated, supplemented or otherwise modified from time to time, the “ Credit Agreement ”); and

WHEREAS, Borrower has requested that the Administrative Agent and the Lenders amend the Credit Agreement to modify the leverage ratio financial covenant contained in Section 7.12(b) of the Credit Agreement and for certain other purposes as provided herein; and

WHEREAS, the Administrative Agent and the Lenders have agreed to amend the Credit Agreement as provided herein upon the terms and conditions set forth herein.

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

SECTION 1. Amendments to Credit Agreement. Subject to the satisfaction or waiver in writing of each condition precedent set forth in Section 2 of this Amendment, and in reliance on the representations, warranties, covenants and agreements contained in this Amendment, the Credit Agreement shall be amended in the manner provided in this Section 1 .

1.1 Additional Definitions. The following definitions shall be and they hereby are added to Section 1.01 of the Credit Agreement in appropriate alphabetical order:

“ Eighth Amendment Effective Date ” means April 22, 2009.

“ Senior Debt ” means, on any date of determination, the Borrower’s consolidated Indebtedness on such date less (a) the amount of unrestricted cash and cash equivalents on hand of the Borrower and the Guarantors as of such date, (b) any Non-Recourse Debt, (c) any Indebtedness of any Unrestricted Subsidiary, (d) any Indebtedness of the Borrower or any Restricted Subsidiary under any Convertible Notes (or any Permitted Refinancing thereof), and (e) any other unsecured Indebtedness of the Borrower or any Restricted Subsidiary to the extent permitted under Section 7.01(l).

Eighth Amendment to Credit Agreement

1.2 Amended Definitions. The following definitions in Section 1.01 of the Credit Agreement shall be and they hereby are amended in their respective entireties to read as follows:

“ Applicable Rate ” means, for any day, with respect to any ABR Loan or Eurodollar Loan, or with respect to the Unused Commitment Fees payable hereunder, as the case may be, the applicable rate per annum set forth below under the caption “ABR Spread”, “Eurodollar Spread” or “Unused Commitment Fee Rate”, as the case may be, based upon the Borrowing Base Usage applicable on such date:

Each change in the Applicable Rate shall apply during the period commencing on the effective date of such change and ending on the date immediately preceding the effective date of the next change.

“ Conforming Date ” means the Eighth Amendment Effective Date.

“ Convertible Notes ” means the senior unsecured convertible notes issued by the Borrower in one or more transactions on or after the Fourth Amendment Effective Date and on or before the Eighth Amendment Effective Date pursuant to the Convertible Notes Indenture, in each case, on terms and conditions reasonably satisfactory to the Administrative Agent and the Required Lenders (it being understood that the terms and conditions set forth in the Draft Preliminary Prospectus Supplement are satisfactory to the Administrative Agent and the Required Lenders and that, so long as such senior unsecured convertible notes do not contain terms and conditions that are materially more onerous to the Borrower and its Subsidiaries than those set forth in the Draft Preliminary Prospectus Supplement, the terms and conditions of such senior unsecured convertible notes are satisfactory to the Administrative Agent and the Required Lenders).

Eighth Amendment to Credit Agreement

“ Consolidated EBITDAX ” means the Borrower’s consolidated earnings determined in accordance with GAAP (excluding earnings of Unrestricted Subsidiaries) before interest expense, income taxes, depreciation, amortization, depletion, oil and gas asset impairment write downs, lease impairment expense, gains and losses from the sale of capital assets, and other non-cash charges. For purposes of calculating Consolidated EBITDAX, Consolidated EBITDAX shall not include (a) the non-cash effects of (i) the early extinguishment of long-term debt, (ii) CCBM’s equity investment in Pinnacle and (iii) any stock option re-pricing expenses, (b) the income (or deficit) of any Person that is not a Subsidiary in which the Borrower or any of its Restricted Subsidiaries has an Equity Interest, except to the extent of the amount of dividends or other distributions actually paid to the Borrower or any of its Restricted Subsidiaries, (c) the income (or deficit) of any Restricted Subsidiary in which any other Person (other than the Borrower or any of its Restricted Subsidiaries) has an Equity Interest, except to the extent that the declaration or payment of dividends or similar distributions by such Restricted Subsidiary is not prohibited by operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to such Restricted Subsidiary, and (d) any portion of the consolidated earnings of Marcellus Holdings that is allocated or remitted to Avista or Avista JV Partner in accordance with the Marcellus JV Participation Agreement or the Marcellus JV Operating Agreement. For purposes of determining the Borrower’s compliance with Section 7.12(b), Consolidated EBITDAX shall not include any net revenue attributable to any assets that are subject to a Lien granted to secure Non-Recourse Debt.

“ Fee Letter ” means that certain Fee Letter, dated as of April 22, 2009, between Borrower and Guaranty Bank.

“ Total Net Debt ” means, on any date of determination, the Borrower’s consolidated Indebtedness on such date less the amount of unrestricted cash and cash equivalents on hand of the Borrower and the Guarantors as of such date. For purposes of this definition and for determining the Borrower’s compliance with Section 7.12(b), the Borrower’s consolidated Indebtedness shall not include (a) Non-Recourse Debt, (b) Indebtedness of any Unrestricted Subsidiary, and (c) for each date of determination during any period set forth below, the amount set forth below opposite such period as the equity component of the Borrower’s Convertible Notes pursuant to FASB Staff Position (“FSB”) Accounting Principles Board (“APB”) 14-1:

Eighth Amendment to Credit Agreement

“ Redetermination Date ” means each date on which the Borrowing Base is redetermined pursuant to the terms hereof, which shall be (a) with respect to any Scheduled Redetermination, on or about March 31 and September 30 of each year, (b) with respect to any Special Redetermination (other than the Special Redeterminations set forth in the following clause (c)), the first day of the first month which is not less than twenty (20) Business Days following the date of a request by the Borrower for a Special Redetermination and (c) with respect to any Special Redetermination requested by the Required Lenders or any Redetermination pursuant to Section 7.04, the date notice of such Redetermination is delivered to the Borrower pursuant to Section 3.06.

“ Unrestricted Subsidiary ” means (a) any Subsidiary that at the time of determination shall be designated an Unrestricted Subsidiary by the Board of Directors of the Borrower in the manner provided below and (b) any Subsidiary of an Unrestricted Subsidiary. The Board of Directors of the Borrower may at any time and from time to time designate any Subsidiary (including any newly acquired or newly formed Subsidiary but excluding any Subsidiary that owns or operates Oil and Gas Interests included in the Borrowing Base Properties or other interests of the type described in clauses (d) or (e) of the definition of Oil and Gas Interests relating to any Borrowing Base Properties) to be an Unrestricted Subsidiary provided that (i) no Default or Event of Default has occurred or is continuing at the time of such designation and after giving effect to such designation, (ii) immediately after such designation, no Credit Party has any obligation to pay any Indebtedness of such Subsidiary, has in any way guaranteed any Indebtedness of such Subsidiary, or has any assets or properties (excluding a pledge of the Equity Interests in such Subsidiary) which are subject to any Lien securing any Indebtedness of such Subsidiary, and (iii) notice of any such designation is promptly given to the Administrative Agent in writing.

1.3 Mandatory Prepayment of Loans. Section 2.10 of the Credit Agreement shall be and it hereby is amended by (a) deleting the last sentence of clause (b) thereof in its entirety and (b) adding a new clause (c) and a new clause (d) to the end thereof to read as follows:

(c) In the event that the Aggregate Credit Exposure exceeds (i) the Maximum Facility Amount or (ii) the Aggregate Commitment at any time other than, with respect to this clause (ii), as a result of the occurrence of a Borrowing Base Deficiency, the Borrower shall immediately prepay, without penalty or premium but other