SecProbe.io

<DOCUMENT>
<TYPE>LETTER
<SEQUENCE>1
<FILENAME>filename1.txt
<TEXT>

      July 6, 2005

Mr. Steven D. Foster
Chief Financial Officer
Parallel Petroleum Corporation
1004 N. Big Spring, Suite 400
Midland, Texas  79701

	Re:	Parallel Petroleum Corporation
		Form 10-K for Fiscal Year Ended December 31, 2004
Filed March 16, 2005
		Form 10-Q for Fiscal Quarter Ended March 31, 2005
      Filed May 10, 2005
		File No. 0- 13305

Dear Mr. Foster:

      We have reviewed your filing and have the following
comments.
We have limited our review to only your financial statements and
related disclosures and do not intend to expand our review to
other
portions of your documents.  Where indicated, we think you should
revise your document in response to these comments.  If you
disagree,
we will consider your explanation as to why our comment is
inapplicable or a revision is unnecessary.  Please be as detailed
as
necessary in your explanation.  In some of our comments, we may
ask
you to provide us with information so we may better understand
your
disclosure.  After reviewing this information, we may raise
additional
comments.

	Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We
look forward to working with you in these respects.  We welcome
any
questions you may have about our comments or any other aspect of
our
review.  Feel free to call us at the telephone numbers listed at
the
end of this letter.

Form 10-K for the Fiscal Year Ended December 31, 2004

Business, page 1

Proved Reserves as of December 31, 2004, page 3

1. We note that you have disclosed certain financial measures in
your
filings identified as non-GAAP measures, including, but without
limitation, the following:

* Present value of pretax future net revenues from properties,
page 3

* Future net revenues (before income taxes) and present value of
future net revenues (before income taxes), page 35

* Operating cash flow, pages 40 and 41

Please provide a detailed analysis that identifies each non-GAAP
financial measure that you have disclosed in your reports and
explain
how you have or intend to comply with the requirements of Item
10(e)
of Regulation S-K and/or Regulation G.  Clarify whether the
measure is
a liquidity or a performance measure.  In instances where you have
adjusted GAAP earnings for recurring items, expand your disclosure
to
address the guidance in Question 8 of the FAQ Regarding the Use of
Non-GAAP Financial Measures located at
<http://www.sec.gov/divisions/corpfin/faqs/nongaapfaq.htm#transiti
on>.
Refer also to Release Number 33-8176: Conditions for Use of Non-
GAAP
Financial Measures, located at <http://www.sec.gov/rules/final/33-
8176.htm> for additional guidance.

Management Discussion and Analysis, page 41

Results of Operations, page 44

2. We note you disclose a "reserves to production ratio" of
approximately 18.3 to 1.  Please disclose the following:

* How the ratio is calculated;

* How management uses this measure;

* The limitations of this measure.

Overhead Reimbursement - Joint Operations, page 47

3. We note that you reduce general and administrative expense for
overhead charged to working interest owners for properties you
operate.  We further note that you reduced capital costs for
overhead
reimbursements.  Please explain how you determine the amounts by
which
you reduce general and administrative and capital costs for
overhead
reimbursement.  Please expand your policy note (1)(d) under Oil
and
gas properties to address your treatment of overhead
reimbursement.

Incentive and Retention Plan, page

4. You disclose, with respect to your Incentive and Retention
Plan,
that the i) likelihood of a corporate transaction or change in
control
is possible, ii) ultimate liability is not readily determinable,
and
iii) terms and conditions of the Plan will be disclosed in your
financial statements.  You also state that you will account for
the
Plan under SFAS 5.  Please disclose , in the notes to your
financial
statements, the terms and conditions of the Plan and the
likelihood
that the Plan will result in the incurrence of a liability using
one
of the three terms identified in paragraph 3 of SFAS 5.  In
addition,
discuss  the potential affect this plan could have on your
financial
condition and results of operations in your Management`s
Discussion
and Analysis (MD&A).  Note that MD&A mandates disclosure of
specified
forward-looking information, and specifies its own standard for
disclosure (i.e. reasonably likely to have material effect).  You
may
refer to Financial Reporting Codification Section 501.02 for
further
guidance.

Quantitative and Qualitative Disclosures About Market Risk, page
63

5. The guidance in Item 305 of Regulation S-K requires
quantitative
information about each market risk exposure category as of the end
of
the latest fiscal year in accordance with one of the three
disclosure
alternatives outlined in paragraphs 305(a)(1)(i)(A), (ii)(A) or
(iii)(A).  Please refer to the "Appendix to Item 305-Tabular
Disclosures" for further guidance and revise your presentation
accordingly.

Financial Statements

Consolidated Balance Sheets, page F-4

6. Please revise your disclosure to comply with the guidance in
Rule
4-10(c)(7)(ii), which requires the following:

* Separate disclosure on the face of the balance sheet of the
aggregate of the capitalized costs of unproved properties and
major
development projects that are excluded from the capitalized costs
being amortized;

* A description in the notes to the financial statements of the
current status of the significant properties or projects involved,
including the anticipated timing of the inclusion of the costs in
the
amortization computation;

* A table that shows, by category of cost, the total costs
excluded as
of the most recent fiscal year; and the amounts of such excluded
costs
incurred in each of the three most recent fiscal years and in the
aggregate for any earlier fiscal years in which the costs were
incurred.  Please refer to Rule 4-10(c)(7)(ii) for a description
of
the type of costs to be disclosed.

(1)  Organization, Business and Summary of Significant Accounting
Policies, page F-9

(b) Basis of Consolidation, page F-9

7. Please disclose  how you account for your investments in joint
ventures and working interests.

(d) Property and Equipment, page F-9

8. We note that you provide management and service fees under
contractual arrangements and that you treat the reimbursement of
costs
as an offset against the cost incurred to provide those services.
The
guidance in Rule 4-10(c)(6)(iv) of Regulation S-X prohibits
recognition of income in connection with service contracts where
you
have an interest in the property, except for the circumstances
described in paragraphs (A) and (B).  Please tell us how you have
complied with the provisions of Rule 4-10(c)(6)(iv)(A)-(D), if
applicable.

(o) Revenue Recognition, page F-14

9. Please expand your disclosure to address how your revenue
recognition policy complies with the guidance in SAB 104 and
provide
additional insight on how you apply the sales method in accordance
with EITF 90-22.

(15)  Supplemental Oil and Gas reserve Data (Unaudited), page F-29

Standardized Measure of Discounted Future Net Cash Flows, page F-
31

10. There is no provision for  the line item "Future net cash
flows
before income taxes" in paragraph 30 or Illustration 5 of SFAS 69.
Therefore, please revise your presentation accordingly.

Closing Comments

       As appropriate, please amend your filing and respond to
these
comments within 10 business days or tell us when you will provide
us
with a response.  You may wish to provide us with marked copies of
the
amendment to expedite our review.  Please furnish a cover letter
with
your amendment that keys your responses to our comments and
provides
any requested information.  Detailed cover letters greatly
facilitate
our review.  Please understand that we may have additional
comments
after reviewing your amendment and responses to our comments

	We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filing to be certain that the
filing
includes all information required under the Securities Exchange
Act of
1934 and that they have provided all information investors require
for
an informed investment decision.  Since the company and its
management
are in possession of all facts relating to a company`s disclosure,
they are responsible for the accuracy and adequacy of the
disclosures
they have made.

	In connection with responding to our comments, please
provide, in
writing, a statement from the company acknowledging that:

* the company is responsible for the adequacy and accuracy of the
disclosure in the filing;

* staff comments or changes to disclosure in response to staff
comments do not foreclose the Commission from taking any action
with
respect to the filing; and

* the company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal
securities laws of the United States.

      In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division
of Corporation Finance in our review of your filing or in response
to
our comments on your filing.

	You may contact Gary Newberry at (202) 551-3761, or Jennifer
Goeken at (202) 551-3721, if you have questions regarding comments
on
the financial statements and related matters.  Please contact me
at
(202) 551-3684 with any other questions.

								Sincerely,

								April Sifford
								Branch Chief

??

??

??

??

Mr. Steven D. Foster
Parallel Petroleum Corporation
July 6, 2005
page 1

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
100 F Street, N.E.
WASHINGTON, D.C. 20549-7010

   DIVISION OF
CORPORATION FINANCE
MAIL STOP 7010

</TEXT>
</DOCUMENT>