Item 1.01 Entry into a Material Definitive Agreement

On February 13, 2009, Royale Energy, Inc. entered into a loan agreement for a $15 million revolving line of credit with Texas Credit Bank, replacing its line of credit with Guaranty Bank, as described in the attached press release.

Advances under the credit agreement bear interest at an adjustable rate equal to the greater of Texas Credit Bank's prime interest rate or the Federal Funds Rate, but no less than 3% per annum.

The loan agreement contains certain restrictive covenants, including a prohibition of payment of dividends on Royale's stock (other than dividends paid in stock). The loan agreement contains covenants that, among other things, Royale must:

• Maintain a minimum ratio of earnings before interest, taxes, depreciation and amortization to interest expense of at lest 3.00 to 1.00;

• Maintain a ratio of current assets to current liabilities of at least 1.00 to 1.00; and

• Maintain a tangible net worth as of the close of each fiscal quarter of at least 75% of Royale's tangible net worth on the loan closing date, plus 75% of positive quarterly net income thereafter.

Item 9.01 Financial Statements and Exhibits

Exhibit 99.1 Press release.

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