EXHIBIT 10.16

STOCK ISSUANCE AGREEMENT

THIS STOCK ISSUANCE AGREEMENT (the “Agreement”), effective as of May 1 , 2006 is
entered into by and between DON PARSONS, an individual having an address at 25
Mountbatten Drive, St. John's, Newfoundland (the “Employee”), and TEKOIL & GAS
CORPORATION, a Delaware corporation (the “Company”).

RECITALS:

WHEREAS, the Company holds all the equity interest in Tekoil & Gas Corporation,
a corporation duly incorporated under the laws of the Canadian Province of
Newfoundland and Labrador (the “Employer”); and

WHEREAS, the Employee is currently employed by the Employer, and the Company
desires to provide an incentive to the Employee in the performance of his duties
for the Employer by granting to the Employee fifty thousand (50,000) shares of
the Company’s Common Stock, par value $.000001 per share (the “Common Stock”)
(all such shares, the “Issued Stock”), which shall be subject to the terms,
conditions, and restrictions contained herein; and

WHEREAS, the Issued Stock shall be granted to the Employee simultaneously with
the execution hereof.

NOW, THEREFORE, in consideration of the mutual agreements hereinafter set forth,
the Company and the Employee have agreed and do hereby agree as follows:

AGREEMENT:

1. Issued Stock.

(a) Issued Stock; Transferability. The Issued Stock and the rights and
privileges conferred in whole or in part hereby may not be transferred,
assigned, pledged or hypothecated in any way (whether by operation of law or
otherwise), and the Company shall have no obligation to transfer such shares,
unless registered under the Securities Act of 1933, as amended (the “Act”) or,
in the opinion of counsel to the Company, such transaction is in compliance with
or exempt from the registration and prospectus requirements of the Act. The
Employee shall pay all costs incurred by the Company in such a transaction,
including but not limited to legal fees and costs. The Issued Stock shall not be
subject to levy and execution, attachment or similar process. Each certificate
or other documentation evidencing the ownership of any shares of Issued Stock
shall be imprinted with a legend in substantially the following form:

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED. THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND
MAY NOT BE REOFFERED, SOLD, TRANSFERRED, PLEDGED, OR ASSIGNED IN THE ABSENCE OF
(A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER SAID ACT AND
THE STATE SECURITIES ACT OR BLUE SKY ACT OF ANY STATE HAVING JURISDICTION
THEREOF, OR (B) AN OPINION OF COUNSEL, REASONABLY SATISFACTORY IN FORM, SCOPE
AND SUBSTANCE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT
OR THE SECURITIES ACT OR BLUE SKY ACT OF ANY STATE HAVING JURISDICTION WITH
RESPECT THERETO.
 
 
 

--------------------------------------------------------------------------------

 
 
The certificate may also bear additional inscriptions that the Company, in its
sole and absolute discretion, otherwise deems are required by federal, state,
foreign or local securities laws. All shares of Issued Stock shall be subject to
such stop-transfer orders and other restrictions as the Company may deem
advisable under the rules, regulations, and other requirements of the Securities
and Exchange Commission, any stock exchange upon which the Common Stock is then
listed, and any applicable federal or state securities law, and the Company may
cause a legend or legends to be put on any certificates evidencing such shares
to make appropriate reference to such restrictions.
 
(b) Restrictions on the Issued Stock. The Issued Stock is subject to all
restrictions in this Agreement. By acceptance of the Issued Stock, the Employee
agrees that the Issued Stock will be held for investment and will not be held
with a view to their distribution, as that term is used in the Act, unless in
the opinion of counsel to the Company, such distribution is in compliance with
or exempt from the registration and prospectus requirements of that Act. As a
condition of this Agreement, the Company may require the Employee to confirm any
factual matters reasonably requested by counsel for the Company.

THE EMPLOYEE UNDERSTANDS THAT THE ISSUED STOCK MAY NOT BE REGISTERED UNDER THE
SECURITIES ACT. THE EMPLOYEE REPRESENTS THAT IT IS EXPERIENCED IN EVALUATING
COMPANIES SUCH AS THE COMPANY, HAS SUCH KNOWLEDGE AND EXPERIENCE IN FINANCIAL
AND BUSINESS MATTERS AS TO BE CAPABLE OF EVALUATING THE MERITS AND RISKS OF ITS
INVESTMENT, AND HAS THE ABILITY TO SUFFER THE TOTAL LOSS OF THE INVESTMENT. THE
EMPLOYEE FURTHER REPRESENTS THAT IT HAS HAD THE OPPORTUNITY TO ASK QUESTIONS OF
AND RECEIVE ANSWERS FROM THE COMPANY CONCERNING THE TERMS AND CONDITIONS OF THE
ISSUED STOCK, THE COMMON STOCK, AND THE BUSINESS OF THE COMPANY, AND TO OBTAIN
ADDITIONAL INFORMATION TO SUCH EMPLOYEE’S SATISFACTION. THE EMPLOYEE FURTHER
REPRESENTS THAT IT IS AN “ACCREDITED INVESTOR” WITHIN THE MEANING OF REGULATION
D UNDER THE SECURITIES ACT, AS PRESENTLY IN EFFECT.

2. Entire Agreement. This written Agreement contains the sole and entire
agreement between the parties as to the matters contained herein, and supersedes
any and all other agreements between them. The parties acknowledge and agree
that neither of them has made any representation with respect to such matters of
this Agreement or any representations except as are specifically set forth
herein, and each party acknowledges that she or it has relied on her or its own
judgment in entering into this Agreement. The parties further acknowledge that
statements or representations that may have been heretofore made by either of
them to the other are void and of no effect and that neither of them has relied
thereon in connection with her or its dealing with the other.

 
2

--------------------------------------------------------------------------------

 
 
3. Severability. The invalidity or unenforceability of a particular provision of
this Agreement shall not affect the other provisions hereto, and this Agreement
shall be construed in all respects as if such invalid or unenforceable
provisions were omitted.

4. Counterparts. This Agreement may be executed in several counterparts, each of
which shall be an original, and such counterparts together shall constitute but
one and the same instrument.

5. Waiver of Rights. No failure of any party to exercise any power given such
party hereunder or to insist upon strict compliance by any party with its
obligations hereunder, and no custom or practice of the parties in variance with
the terms hereof shall constitute a waiver of the parties’ right to demand exact
compliance with the terms hereof.

6. Waiver or Modification. No waiver or modification of this Agreement or of any
covenant, condition, or limitation herein contained shall be valid unless in
writing and duly executed by the party to be charged therewith. Furthermore, no
evidence of any modification or waiver shall be offered or received as evidence
in any proceeding, arbitration or litigation between the parties arising out of
or affecting this Agreement or the rights or obligations of any party hereunder,
unless such waiver or modification is in writing, duly executed as aforesaid.
The provisions of this paragraph may not be waived except as herein set forth.

7. Headings. The division of this Agreement into articles, sections and
subsections and the insertion of headings are for convenience or reference only
and shall not affect the construction of the Agreement.

8. Notices. Communications in writing between the Employee and the Company shall
be considered to have been received by the addressee on the date of delivery, if
delivered by hand to the individual, or to an officer of the Company, or if sent
by facsimile transmission. Communications in writing between the Employee and
either the Company which are sent by post shall be considered to have been
received within five working days of the date on which the correspondence was
mailed.

9. Prior Agreements. This Agreement supersedes all prior agreements, oral or
written, between the parties with respect to the subject matter hereof. This
agreement contains the final and entire understanding and agreement between the
parties with respect to the subject matter hereof, and they shall not be bound
by any terms, conditions, statements, covenants, representations, or warranties,
oral or written, not herein contained with respect to the subject matter hereof.

10. Assignment of Rights. The Employee may not assign this Agreement without the
prior written consent of the Company. The Company may assign this Agreement
without the prior consent of the Employee.

11. Governing Law. This Agreement and the performance hereunder and all suits
and special proceedings hereunder shall be construed in accordance with the laws
of the State of Florida. Any and all actions under this Agreement shall be taken
in the applicable Federal or State court in Orange County, Florida. The Employee
hereby waives and agrees that she shall not assert that such forum is
inconvenient.

12. Waiver of Jury Trial. EACH PARTY HERETO IRREVOCABLY WAIVES ANY AND ALL
RIGHTS IT MAY HAVE TO DEMAND A TRIAL BY JURY FOR ANY ACTION, PROCEEDING OR
COUNTERCLAIM ARISING OUT OF OR IN ANY WAY RELATED TO THIS AGREEMENT OR THE
RELATIONSHIP OF THE PARTIES. THIS WAIVER EXTENDS TO ANY AND ALL RIGHTS TO DEMAND
A TRIAL BY JURY ARISING FROM ANY SOURCE, INCLUDING BUT NOT LIMITED TO THE
CONSTITUTION OF THE UNITED STATES, THE CONSTITUTION OF ANY STATE, COMMON LAW OR
ANY APPLICABLE STATUTE OR REGULATION. EACH PARTY HEREBY ACKNOWLEDGES THAT IT IS
KNOWINGLY AND VOLUNTARILY WAIVING THE RIGHT TO DEMAND TRIAL BY JURY.
13. No Inducement. The Employee hereby acknowledges and agrees that she has not
been induced into this Agreement through the expectation of her employment with
the Employer and neither the Employee’s initial or continued employment is
dependent on the Employee making this Agreement.

 
3

--------------------------------------------------------------------------------

 
 
WHEREOF, the parties have executed this Agreement as of the date first set forth
above.
 

        “COMPANY”   TEKOIL & GAS CORPORATION, a Delaware corporation   
   
   
    By:   /s/ Mark S. Western   Print Name: Mark Western    Title: President &
CEO        “EMPLOYEE”        /s/ Don Parsons    Don Parsons 

 
 
4

--------------------------------------------------------------------------------