Edgar Filing: PARALLEL PETROLEUM CORP

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13G

(Amendment No. 2)*

Under the Securities Exchange Act of 1934

PARALLEL PETROLEUM CORPORATION

(Name of Issuer)

Common Stock, par value $0.01 per share

(Title of Class of Securities)

699157103

(CUSIP Number)

December 31, 2006

(Date of Event Which Requires Filing of this Statement)

Check the appropriate box to designate the rule pursuant to which this Schedule 13G is filed:

o Rule 13d-1(b)

x Rule 13d-1(c)

o Rule 13d-1(d)

*The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter the disclosures provided in a prior cover page.

The information required in the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

CUSIP No. 699157103
1	NAME OF REPORTING PERSON: WS Capital, L.L.C. I.R.S. Identification Nos. of above persons (entities only):
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) o (b) x
3	SEC USE ONLY
4	CITIZENSHIP OR PLACE OF ORGANIZATION Texas
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON		5	SOLE VOTING POWER: 476,558
		6	SHARED VOTING POWER: 0
		7	SOLE DISPOSITIVE POWER: 476,558
		8	SHARED DISPOSITIVE POWER: 0
9	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 476,558
10	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES [ ]
11	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 9 1.3%*
12	TYPE OF REPORTING PERSON HC/OO

* Based on 37,464,991 shares issued and outstanding as of November 6, 2006, as reported by the issuer in its Quarterly Report on Form 10-Q for the quarterly period ended on September 30, 2006.

CUSIP No. 699157103
1	NAME OF REPORTING PERSON: WS Capital Management, L.P. I.R.S. Identification Nos. of above persons (entities only):
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) o (b) x
3	SEC USE ONLY
4	CITIZENSHIP OR PLACE OF ORGANIZATION Texas
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON		5	SOLE VOTING POWER: 476,558
		6	SHARED VOTING POWER: 0
		7	SOLE DISPOSITIVE POWER: 476,558
		8	SHARED DISPOSITIVE POWER: 0
9	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 476,558
10	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES [ ]
11	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 9 1.3%*
12	TYPE OF REPORTING PERSON IA/PN

* Based on 37,464,991 shares issued and outstanding as of November 6, 2006, as reported by the issuer in its Quarterly Report on Form 10-Q for the quarterly period ended on September 30, 2006.

CUSIP No. 699157103
1	NAME OF REPORTING PERSON: WSV Management, L.L.C. I.R.S. Identification Nos. of above persons (entities only):
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) o (b) x
3	SEC USE ONLY
4	CITIZENSHIP OR PLACE OF ORGANIZATION Texas
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON		5	SOLE VOTING POWER: 91,942
		6	SHARED VOTING POWER: 0
		7	SOLE DISPOSITIVE POWER: 91,942
		8	SHARED DISPOSITIVE POWER: 0
9	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 91,942
10	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES [ ]
11	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 9 0.2%*
12	TYPE OF REPORTING PERSON IA/OO

* Based on 37,464,991 shares issued and outstanding as of November 6, 2006, as reported by the issuer in its Quarterly Report on Form 10-Q for the quarterly period ended on September 30, 2006.

CUSIP No. 699157103
1	NAME OF REPORTING PERSON: WS Ventures Management, L.P. I.R.S. Identification Nos. of above persons (entities only):
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) o (b) x
3	SEC USE ONLY
4	CITIZENSHIP OR PLACE OF ORGANIZATION Texas
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON		5	SOLE VOTING POWER: 91,942
		6	SHARED VOTING POWER: 0
		7	SOLE DISPOSITIVE POWER: 91,942
		8	SHARED DISPOSITIVE POWER: 0
9	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 91,942
10	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES [ ]
11	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 9 0.2%*
12	TYPE OF REPORTING PERSON HC/PN

* Based on 37,464,991 shares issued and outstanding as of November 6, 2006, as reported by the issuer in its Quarterly Report on Form 10-Q for the quarterly period ended on September 30, 2006.

CUSIP No. 699157103
1	NAME OF REPORTING PERSON: Reid S. Walker I.R.S. Identification Nos. of above persons (entities only):
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) o (b) x
3	SEC USE ONLY
4	CITIZENSHIP OR PLACE OF ORGANIZATION United States
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON		5	SOLE VOTING POWER: 568,500
		6	SHARED VOTING POWER: 0
		7	SOLE DISPOSITIVE POWER: 568,500
		8	SHARED DISPOSITIVE POWER: 0
9	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 568,500
10	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES [ ]
11	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 9 1.5%*
12	TYPE OF REPORTING PERSON HC/IN

* Based on 37,464,991 shares issued and outstanding as of November 6, 2006, as reported by the issuer in its Quarterly Report on Form 10-Q for the quarterly period ended on September 30, 2006.

CUSIP No. 699157103
1	NAME OF REPORTING PERSON: G. Stacy Smith I.R.S. Identification Nos. of above persons (entities only):
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) o (b) x
3	SEC USE ONLY
4	CITIZENSHIP OR PLACE OF ORGANIZATION United States
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON		5	SOLE VOTING POWER: 568,500
		6	SHARED VOTING POWER: 0
		7	SOLE DISPOSITIVE POWER: 568,500
		8	SHARED DISPOSITIVE POWER: 0
9	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 568,500
10	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES [ ]
11	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 9 1.5%*
12	TYPE OF REPORTING PERSON HC/IN

* Based on 37,464,991 shares issued and outstanding as of November 6, 2006, as reported by the issuer in its Quarterly Report on Form 10-Q for the quarterly period ended on September 30, 2006.

CUSIP No. 699157103
1	NAME OF REPORTING PERSON: Patrick P. Walker I.R.S. Identification Nos. of above persons (entities only):
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) o (b) x
3	SEC USE ONLY
4	CITIZENSHIP OR PLACE OF ORGANIZATION United States
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON		5	SOLE VOTING POWER: 98,442
		6	SHARED VOTING POWER: 0
		7	SOLE DISPOSITIVE POWER: 98,442
		8	SHARED DISPOSITIVE POWER: 0
9	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 98,442
10	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES [ ]
11	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 9 0.3%*
12	TYPE OF REPORTING PERSON HC/IN

* Based on 37,464,991 shares issued and outstanding as of November 6, 2006, as reported by the issuer in its Quarterly Report on Form 10-Q for the quarterly period ended on September 30, 2006.

This Schedule 13G relates to the common stock (“Common Stock”) of PARALLEL PETROLEUM CORPORATION acquired by (i) WS Capital, L.L.C., a Texas limited liability company (“WS Capital”), for the account of (1) Walker Smith Capital, L.P., a Texas limited partnership (“WSC”), (2) Walker Smith Capital (Q.P.), L.P., a Texas limited partnership (“WSCQP”), (3) Walker Smith International Fund, Ltd., a British Virgin Islands exempted company (“WS International”), and (4) HHMI Investments, L.P., a Delaware limited partnership (“HHMI”), and (ii) WSV Management, L.L.C., a Texas limited liability company (“WSV”), for the account of (1) WS Opportunity Fund, L.P., a Texas limited partnership (“WSO”), (2) WS Opportunity Fund (Q.P.), L.P., a Texas limited partnership (“WSOQP”), and (3) WS Opportunity Fund International, Ltd., a Cayman Islands exempted company (“WSO International”). WS Capital is the general partner of WS Capital Management, L.P., a Texas limited partnership (“WSC Management”), which is the general partner of WSC and WSCQP and the investment manager for WS International and HHMI. WSV is the general partner of WS Ventures Management, L.P., a Texas limited partnership (“WSVM”), which is the general partner of WSO and WSOQP and the agent and attorney-in-fact for WSO International. Reid S. Walker and G. Stacy Smith are principals of WS Capital and WSV, and Patrick P. Walker is a principal of WSV. Each of the reporting persons hereby expressly disclaims membership in a “group” under Section 13(d) of the Securities Exchange Act of 1934 and the rules and regulations thereunder with respect to the shares of Common Stock reported herein, and this Schedule 13G shall not be deemed to be an admission that any such reporting person is a member of such a group.

Item 1(a).

Name of Issuer: PARALLEL PETROLEUM CORPORATION

Item 1(b).

Address of Issuer's Principal Executive Offices:

1004 N. Big Spring, Suite 400

Midland, Texas 79701

Item 2(a).

Name of Person Filing:

See Item 1 of each cover page.

Item 2(b).

Address of Principal Business Office or if none, Residence:

300 Crescent Court, Suite 1111

Dallas, Texas 75201

Item 2(c).

Citizenship: See Item 4 of each cover page.

Item 2(d).

Title of Class of Securities: Common stock, par value $0.01 per share

Item 2(e).

CUSIP Number: 699157103

Item 3.

Not Applicable

Item 4.

Ownership:

(a)

Amount Beneficially Owned:

Reid S. Walker and G. Stacy Smith are the beneficial owners of 568,500 shares of Common Stock, which includes (i) 476,558 shares beneficially owned by WS Capital and WSC Management for the accounts of WSC, WSCQP and WS International and HHMI and (ii) 91,942 shares beneficially owned by WSV and WSVM for the accounts of WSO, WSOQP, WSO International.

Patrick P. Walker is the beneficial owner of 98,442 shares of Common Stock, reflecting (i) 91,942 shares beneficially owned by WSV and WSVM for the accounts of WSO, WSOQP and WSO International and (ii) 6,500 shares of Common Stock held in certain private investment accounts.

WS Capital and WSC Management are the beneficial owners of 476,558 shares of Common Stock for the accounts of WSC, WSCQP, WS International and HHMI.

WSV and WSVM are the beneficial owners of 91,942 shares of Common Stock for the accounts of WSO, WSOQP and WSO International.

(b)

Percent of Class: See Item 11 of each cover page.

(c)

Number of shares as to which such person has:

(i)

sole power to vote or to direct the vote: See Item 5 of each cover page.

(ii)

shared power to vote or to direct the vote: See Item 6 of each cover page.

(iii)

sole power to dispose or to direct the disposition of: See Item 7 of each cover page.

(iv)

shared power to dispose or to direct the disposition of: See Item 8 of each cover page.

Item 5.

Ownership of Five Percent or Less of a Class:

If this statement is being filed to report the fact that as of the date hereof the reporting person has ceased to be the beneficial owner of more than five percent of the class of securities, check the following x.

Item 6.

Ownership of More than Five Percent on Behalf of Another Person: Not applicable.

Item 7.

Identification and Classification of Subsidiary Which Acquired the Securities:

WSC Management is an investment adviser registered with the State of Texas and, as such, has beneficial ownership of the securities held by its clients, WSC, WSCQP, WS International and HHMI. WS Capital is the general partner of WSC Management. Reid S. Walker and G. Stacy Smith are the sole principals of WS Capital, and therefore exercise investment discretion and control with respect to the shares of Common Stock beneficially owned by WSC Management’s clients.

WSV is an investment adviser registered with the State of Texas and is the general partner of WSVM and, as such, has beneficial ownership of the securities held by its clients, WSO, WSOQP and WSO International. Reid S. Walker, G. Stacy Smith and Patrick P. Walker are the sole principals of WSV, and therefore exercise investment discretion and control with respect to the shares of Common Stock beneficially owned by WSV’s clients.

Item 8.

Identification and Classification of Members of the Group: Not applicable.

Item 9.

Notice of Dissolution of Group: Not applicable.

Item 10.

Certification:

By signing below I certify that, to the best of my knowledge and belief, the securities referred to above were not acquired and are not held for the purpose of or with the effect of changing or influencing the control of the issuer of the securities and were not acquired and are not held in connection with or as a participant in any transaction having that purpose or effect.

SIGNATURE

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

	February 10, 2007

	WS CAPITAL, L.L.C.

	By:	/s/ Reid S. Walker
		Reid S. Walker, Member


	WS CAPITAL MANAGEMENT, L.P.

	By:	WS Capital, L.L.C., its general partner

	By:	/s/ Reid S. Walker
		Reid S. Walker, Member


	WSV MANAGEMENT, L.L.C.

	By:	/s/ Reid S. Walker
		Reid S. Walker, Member


	WS VENTURES MANAGEMENT, L.P.

	By:	WSV Management, L.L.C., its general partner

	By:	/s/ Reid S. Walker
		Reid S. Walker, Member


		/s/ Reid S. Walker
		REID S. WALKER


		/s/ G. Stacy Smith
		G. STACY SMITH


		/s/ Patrick P. Walker
		PATRICK P. WALKER

Attention: Intentional misstatements or omissions of fact constitute Federal criminal violations (See 18 U.S.C. 1001)