THIRD AMENDMENT TO CREDIT AGREEMENT

Exhibit 10.1

THIRD AMENDMENT TO CREDIT AGREEMENT

     THIS THIRD AMENDMENT TO CREDIT AGREEMENT (herein called the “ Amendment ”) made as of August 11, 2009 by and among Encore Energy Partners Operating LLC, a Delaware limited liability company (“ Borrower ”), Encore Energy Partners LP, a Delaware limited partnership (“ Parent ”), Bank of America, N.A., as the Administrative Agent (the “ Administrative Agent ”) and L/C Issuer, and the Lenders party hereto.

W I T N E S S E T H:

     WHEREAS, Borrower, Parent, the Administrative Agent, L/C Issuer and the lenders party thereto (the “ Lenders ”) are party to that certain Credit Agreement dated as of March 7, 2007 (as heretofore amended, the “ Original Agreement ”), for the purpose and consideration therein expressed, whereby L/C Issuer became obligated to issue Letters of Credit to Borrower and the Lenders became obligated to make loans to Borrower as therein provided; and

     WHEREAS, Borrower, Parent, the Administrative Agent, the L/C Issuer and the Lenders party hereto desire to amend the Original Agreement as set forth herein;

     NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements contained herein and in the Original Agreement, in consideration of the loans and other credit which may hereafter be made by the Lenders and the L/C Issuer to the Borrower, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto do hereby agree as follows:

ARTICLE I.

DEFINITIONS AND REFERENCES

     Section 1.1. Terms Defined in the Original Agreement . Unless the context otherwise requires or unless otherwise expressly defined herein, the terms defined in the Original Agreement shall have the same meanings whenever used in this Amendment.

     Section 1.2. Other Defined Terms . Unless the context otherwise requires, the following terms when used in this Amendment shall have the meanings assigned to them in this Section 1.2.

     “ Amendment ” means this Third Amendment to Credit Agreement.

     “ Amendment Documents ” means this Amendment and all other documents or instruments delivered in connection herewith.

     “ Credit Agreement ” means the Original Agreement as amended hereby.

[ Third Amendment to
Credit Agreement ]

ARTICLE II.

AMENDMENT TO ORIGINAL AGREEMENT

     Section 2.1. Applicable Margin . The definition of “Applicable Margin” in Section 1.01 of the Original Agreement is hereby amended in its entirety to read as follows:

     ““ Applicable Margin ” means, on any date, with respect to each Loan, an amount determined by reference to the ratio of Total Outstandings on such date to the Borrowing Base on such date in accordance with the table below:

     Section 2.2. Commitment Fee Percentage . The definition of “Commitment Fee Percentage” in Section 1.01 of the Original Agreement is hereby amended in its entirety to read as follows:

     ““ Commitment Fee Percentage ” means, on any date, the percentage determined pursuant to the table below based on the ratio of the Total Outstandings on such date to the Borrowing Base in effect on such date:

[ Third Amendment to
Credit Agreement ]

     Section 2.3. Financial Covenants .

     (a) The definitions of “Consolidated Senior Interest Coverage Ratio” and “Consolidated Senior Interest Expense” in Section 1.01 of the Original Agreement are hereby deleted in their entirety.

     (b) Section 7.13(b) of the Original Agreement is hereby amended in its entirety to read as follows:

“(b) At the last day of each Fiscal Quarter, commencing September 30, 2009, neither the Borrower nor Parent will permit the Consolidated Total Interest Coverage Ratio to be less than 2.5 to 1.”

     Section 2.4. Schedule 2.01 . Schedule 2.01 to the Original Agreement is hereby replaced in its entirety with Schedule 2.01 attached hereto.

     Section 2.5. Borrowing Base . The Borrower, the Administrative Agent and the Lenders agree that from the Effective Date (as defined below) until the next redetermination or adjustment thereof, the Borrowing Base shall be $375,000,000.

ARTICLE III.

CONDITIONS OF EFFECTIVENESS

     Section 3.1. Conditions to Effectiveness of Amendment. This Amendment shall become effective when and only when the Administrative Agent shall have received executed counterparts of this Amendment (or a consent to this Amendment) from the Required Lenders and the following conditions precedent have been satisfied (the date such conditions are so satisfied herein called the “ Effective Date ”):

[ Third Amendment to
Credit Agreement ]

     (i) executed counterparts of this Amendment, sufficient in number for distribution to the Administrative Agent, each Lender and the Borrower;

     (ii) a Note (or replacement Note) executed by the Borrower in favor of each Lender requesting a Note to reflect such Lender’s Commitment after giving effect to this Amendment;

     (iii) Mortgages or amendments to existing Mortgages covering Proved Mineral Interests that have a Recognized Value of not less than the 80% of the Recognized Value of all Proved Mineral Interests owned by the Credit Parties on the Effective Date (after giving effect to the June 2009 Acquisition Transaction) and included in the Borrowing Base in effect on the Effective Date, duly executed and delivered by the applicable Credit Parties, together with such other assignments, conveyances, agreements and other writings as may be reasonably requested by the Administrative Agent, including, without limitation, UCC financing statements and/or amendments to financing statements, in form and substance reasonably satisfactory to the Administrative Agent;

     (iv) such certificates of resolutions or other action, incumbency certificates and/or other certificates of Responsible Officers of each Credit Party as the Administrative Agent may reasonably require evidencing the identity, authority and capacity of each Responsible Officer thereof authorized to act as a Responsible Officer in connection with this Amendment and the other Loan Documents to which such Credit Party is a party;

     (v) such documents and certifications as the Administrative Agent may reasonably require to evidence that each Credit Party is duly organized or formed, validly existing, in good standing and qualified to engage in business in each jurisdiction where its ownership, lease or operation of properties or the conduct of its business requires such qualification, except to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect;

     (vi) a favorable opinion of Baker Botts L.L.P., counsel to the Credit Parties, addressed to the Administrative Agent and each Lender, as to certain corporate matters and as to the enforceability of the Mortgages and amendments to Mortgages, as applicable, in Texas and otherwise in form and substance satisfactory to the Administrative Agent;

     (vii) a favorable opinion of Holme Roberts & Owens, LLP, special Montana and Wyoming counsel for the Administrative Agent, addressed to the Administrative Agent and each Lender, as to the enforceability of the Mortgages and amendments to Mortgages, as applicable, in Montana and Wyoming, respectively, and otherwise in form and substance satisfactory to the Administrative Agent;

     (viii) a favorable opinion of Wold Johnson PC, special North Dakota counsel for the Administrative Agent, addressed to the Administrative Agent and each Lender, as to the enforceability of the Mortgages and amendments to

[ Third Amendment to
Credit Agreement ]

Mortgages, as app