**UNITED      STATES**

**SECURITIES      AND EXCHANGE COMMISSION**

**Washington,      D.C. 20549**

**FORM      10-KSB**

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| Delaware                                                                      |   | 34-2035350                                          |
|-------------------------------------------------------------------------------|--------|-----------------------------------------------------|
| (State                of other jurisdiction of incorporation or organization) |   | (I.R.S.                Employer Identification No.) |
|                                                                          |   |                                                |
| 25025                I-45 North, Suite 525, The Woodlands, Texas              |   | 77380                                               |
| (Address                of principal executive offices)                       |   | (Zip                Code)                           |

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**TABLE      OF CONTENTS**

|                                                                                                                                                                                                                      |   | Page   |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|
|                                                                                                                                                                                                                      |   |   |   |   |
| **FORWARD                LOOKING STATEMENTS**                                                                                                                                                                             |   |   | 3      |   |
|                                                                                                                                                                                                                      |   |   |   |   |
| **PART                I**                                                                                                                                                                                                 |   |   | 5      |   |
|                                                                                                                                                                                                                      |   |   |   |   |
| ITEM                1. DESCRIPTION OF BUSINESS                                                                                                                                                                            |   |   | 5      |   |
| Business                Development                                                                                                                                                                                       |   |   | 5      |   |
| Business                of Issuer                                                                                                                                                                                         |   |   | 6      |   |
| Risk                Factors                                                                                                                                                                                               |   |   | 17     |   |
|                                                                                                                                                                                                                      |   |   |   |   |
| ITEM                2. DESCRIPTION OF PROPERTY                                                                                                                                                                            |   |   | 25     |   |
| Oil                and Gas Leases                                                                                                                                                                                         |   |   | 25     |   |
| Other                                                                                                                                                                                                                     |   |   | 26     |   |
|                                                                                                                                                                                                                      |   |   |   |   |
| ITEM                3. LEGAL PROCEEDINGS                                                                                                                                                                                  |   |   | 26     |   |
|                                                                                                                                                                                                                      |   |   |   |   |
| ITEM                4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                                                                                                                                |   |   | 27     |   |
|                                                                                                                                                                                                                      |   |   |   |   |
| **PART                II**                                                                                                                                                                                                |   |   | 28     |   |
|                                                                                                                                                                                                                      |   |   |   |   |
| ITEM                5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER                MATTERS                                                                                                                            |   |   | 28     |   |
|                                                                                                                                                                                                                      |   |   |   |   |
| ITEM                6. MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF                OPERATION                                                                                                                     |   |   | 29     |   |
| Critical                Accounting Policies                                                                                                                                                                               |   |   | 29     |   |
| Plan                of Operation                                                                                                                                                                                          |   |   | 29     |   |
| Liquidity                and Capital Resources                                                                                                                                                                            |   |   | 32     |   |
|                                                                                                                                                                                                                      |   |   |   |   |
| ITEM                7. FINANCIAL STATEMENTS                                                                                                                                                                               |   |   | 37     |   |
|                                                                                                                                                                                                                      |   |   |   |   |
| ITEM                      8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING                      AND                      FINANCIAL DISLOSURE MATTERS                                                        |   |   | 38     |   |
|                                                                                                                                                                                                                      |   |   |   |   |
| ITEM                8A. CONTROLS AND PROCEDURES                                                                                                                                                                           |   |   | 38     |   |
|                                                                                                                                                                                                                      |   |   |   |   |
| ITEM                8B. OTHER INFORMATION                                                                                                                                                                                 |   |   | 39     |   |
|                                                                                                                                                                                                                      |   |   |   |   |
| **PART                III**                                                                                                                                                                                               |   |   | 40     |   |
|                                                                                                                                                                                                                      |   |   |   |   |
| ITEM                    9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, CONTROL PERSONS                    AND CORPORATE                    GOVERNANCE; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE                    ACT |   |   | 40     |   |
| Corporate                Governance                                                                                                                                                                                       |   |   | 42     |   |
| Section                16(a) Compliance                                                                                                                                                                                   |   |   | 42     |   |
|                                                                                                                                                                                                                      |   |   |   |   |
| ITEM                10. EXECUTIVE COMPENSATION                                                                                                                                                                            |   |   | 43     |   |
|                                                                                                                                                                                                                      |   |   |   |   |
| ITEM                    11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT                    AND                    RELATED STOCKHOLDER MATTERS                                                          |   |   | 46     |   |
|                                                                                                                                                                                                                      |   |   |   |   |
| ITEM                    12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR                    INDEPENDENCE                                                                                                  |   |   | 48     |   |
|                                                                                                                                                                                                                      |   |   |   |   |
| ITEM                13. EXHIBITS                                                                                                                                                                                          |   |   | 49     |   |
|                                                                                                                                                                                                                      |   |   |   |   |
| ITEM                14. PRINCIPAL ACCOUNTING FEES AND SERVICES                                                                                                                                                            |   |   | 56     |   |
|                                                                                                                                                                                                                      |   |   |   |   |
| **SIGNATURES**                                                                                                                                                                                                            |   |   | 57     |   |
|                                                                                                                                                                                                                      |   |   |   |   |
| **EXHIBIT                INDEX**                                                                                                                                                                                          |   |   | 58     |   |

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**FORWARD-LOOKING      STATEMENTS**

|   | · | plans                and objectives of our management for future operations relating to                our                products and services; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | plans                and objectives of our management for our future economic                performance; |
|--------|--------|-----------------------------------------------------------------------------------------------------------|

|   | · | amounts                and nature of future capital                expenditures; |
|--------|--------|----------------------------------------------------------------------------------|

|   | · | wells                to be drilled or reworked; |
|--------|--------|-------------------------------------------------|

|   | · | oil                and gas prices and demand; |
|--------|--------|-----------------------------------------------|

 

|   | · | exploitation                and exploration prospects; |
|--------|--------|--------------------------------------------------------|

|   | · | estimates                of proved oil and gas reserves; |
|--------|--------|----------------------------------------------------------|

|   | · | reserve                potential; |
|--------|--------|-----------------------------------|

|   | · | development                and infill drilling potential; |
|--------|--------|-----------------------------------------------------------|

|   | · | expansion                and other development trends of the oil and gas                industry; |
|--------|--------|---------------------------------------------------------------------------------------------------|

|   | · | business                strategy; |
|--------|--------|-----------------------------------|

|   | · | production                of oil and gas reserves; |
|--------|--------|----------------------------------------------------|

|   | · | planned                asset sales or dispositions; and |
|--------|--------|---------------------------------------------------------|

|   | · | expansion                and growth of our business and                operations. |
|--------|--------|------------------------------------------------------------------------------------|

|   | · | risk                factors discussed in this annual                report; |
|--------|--------|-----------------------------------------------------------------------------|

|   | · | oil                and gas prices; |
|--------|--------|------------------------------------|

|   | · | exploitation                and exploration successes; |
|--------|--------|--------------------------------------------------------|

|   | · | continued                availability of capital and                financing; |
|--------|--------|--------------------------------------------------------------------------------|

|   | · | general                economic, market or business                conditions; |
|--------|--------|--------------------------------------------------------------------------------|

|   | · | acquisitions                and other business opportunities (or lack thereof) that may be presented                to and pursued by us; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------|

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|   | · | changes                in laws or regulations; and |
|--------|--------|----------------------------------------------------|

|   | · | other                factors, most of which are beyond our                control. |
|--------|--------|------------------------------------------------------------------------------------|

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**PART      I**

**Item      1.**
**      Description of Business.**

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*Business      Strategy*

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*Western      Newfoundland Prospect Development*

|   | · | Prepare                a technically sound exploration and development                plan. |
|--------|--------|---------------------------------------------------------------------------------------------|

|   | · | Lease                the mineral rights over the prospective acreage at reasonable terms                for                the Company. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Establish                our presence in Newfoundland by forming a Newfoundland subsidiary,                qualifying                to do business in Newfoundland and opening an office there; familiarizing                ourselves                with the applicable regulatory regime(s) for oil and gas activity                in the                province;                and establishing good working relations with the regulators, government                officials                and the local communities in which we will be                operating. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Obtain                the approvals required to conduct an intense 3D seismic survey over                the                area’s onshore prospects. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The                exploration and development plan is                complete. |
|--------|--------|---------------------------------------------------------------------------------|

|   | · | We                have developed a significant network of contacts in Newfoundland                and have                established                a Newfoundland subsidiary and an office in St. John’s, Newfoundland,                staffed                by two employees, one of whom previously worked for the Newfoundland                Department                of Natural Resources for eight                years. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | · | We                have met with relevant government agencies, such as the Department                of                Natural                Resources, the Canada-Newfoundland and Labrador Offshore Petroleum                Board, the Department of Environment and Conservation, Environment                Canada,                the Department of Fisheries and Oceans, as well as the Fish, Food                and                Allied Workers                Union. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | We                have obtained an exploration license to conduct the 3D seismic survey                over                the                onshore and transition area prospect. The next step will involve                submission of                a detailed seismic program for approval. Onshore preparatory work                can                begin in the                Spring of 2008, followed by the survey in the Fall of                2008. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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On      January 3, 2007, the Company and Ptarmigan Resources Limited, a company based      in      Newfoundland & Labrador, Canada, executed a Farmout Agreement with respect      to Ptarmigan’s offshore exploration license EL-1069. The License covers      approximately 140,000 hectares, or 346,500 acres, of offshore surface area,      in      the shallow waters of the Gulf of St. Lawrence north of the Port au Port      peninsula in western Newfoundland.

*Onshore      Rig Construction*

*Rigzone.com*
*WorldOil.com*
*Drilling      Contractor*

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|   | · | Two-year,                long-term contract - $32 million, with an expected                mobilization/demobilization charge                of $10 million, according to an estimate by Nabors International.                Factors                affecting the                estimate were limited land market in Newfoundland, higher labor costs                in                Canada, the fact                that there is no rig in the area and the necessity of                winterization. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Purchase                new - $27 million, with 12 to 18 month delivery, according to an                estimate                from National                Oilwell Varco. Prices for new rigs have been steadily increasing                in                response to demand. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Refurbish                older unit - $10 million with 6 months delivery through our own turnkey                operation,                as outlined below. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| **ITEM DESCRIPTION**                                                                             |   | **ESTIMATED****PURCHASE****PRICE** |         | ****ESTIMATED****COST TO****REFURBISH** |   | **TRANSPORT.****COSTS**      |   | **TOTAL** |       |
|-------------------------------------------------------------------------------------------------------|--------|------------------------------------|--------------|----------------------------------------------|--------|------------------------------|--------|-----------|------------|
|                                                                                                  |   | **$US**                            |         | **$US**                                      |   | **$US**                      |   | **$US**   |       |
| Substructure                25' clear working height                                                  |   |                               |              |                                         |   |                              |   |      |            |   |   |  |   |
| Mast                152' x 1,300,000 lbs capacity                                                     |   |                               |              |                                         |   |                              |   |      |            |   |   |  |   |
| National                1320 UE Drawwork c/w electric brake                                           |   |                               |              |                                         |   |                              |   |      |            |   |   |  |   |
| National                P275 rotary table                                                             |   |                               |              |                                         |   |                              |   |      |            |   |   |  |   |
| Oilwell                P500 swivel                                                                    |   |                               |              |                                         |   |                              |   |      |            |   |   |  |   |
| Traveling                block / hook B660GA500                                                       |   |                               |              |                                         |   |                              |   |      |            |   |   |  |   |
|                                                                                                  |   |                               |              |                                         |   |                              |   |      |            |   |   |  |   |
| Items                above to be purchased as part of the original four rig                package.   |   |                               | 1,500,000.00 |                                         |   | 600,000.00                   |   |      | 200,000.00 |   |   | 2,300,000.00 |   |
|                                                                                                  |   |                               |              |                                         |   |                              |   |      |            |   |   |  |   |
| Engines                / generators - Caterpillar or Detroit (3)                                      |   |                               | 600,000.00   |                                         |   | 100,000.00                   |   |      | 60,000.00  |   |   | 760,000.00 |   |
| SCR                system and building                                                                |   |                               | 650,000.00   |                                         |   |                              |   |      | 30,000.00  |   |   | 680,000.00 |   |
| *                3                tank mud system 1800 bbls total volume                              |   |                               | 750,000.00   |                                         |   |                              |   |      | 20,000.00  |   |   | 770,000.00 |   |
| 1600                hp mud pumps (two pumps)                                                          |   |                               | 650,000.00   |                                         |   | 100,000.00                   |   |      | 40,000.00  |   |   | 790,000.00 |   |
| *                Water tank and pumping system                                                        |   |                               | 150,000.00   |                                         |   |                              |   |      | 7,000.00   |   |   | 157,000.00 |   |
| *                Dog house and windwall on off drillers side                                          |   |                               | 150,000.00   |                                         |   |                              |   |      | 5,000.00   |   |   | 155,000.00 |   |
| Blow                out preventer 13 5/8" x 5000                                                      |   |                               | 200,000.00   |                                         |   |                              |   |      | 15,000     |   |   | 215,000.00 |   |
| 6                station closing unit                                                                 |   |                               | 80,000.00    |                                         |   |                              |   |      | 10,000.00  |   |   | 90,000.00 |   |
| Choke                manifold and poorboy degasser                                                    |   |                               | 120,000.00   |                                         |   |                              |   |      | 10,000.00  |   |   | 130,000.00 |   |
| Hydraulic                catwalk                                                                      |   |                               | 530,000.00   |                                         |   |                              |   |      | 25,000.00  |   |   | 555,000.00 |   |
| *                Pipe tubs( 7units )                                                                  |   |                               | 150,000.00   |                                         |   |                              |   |      | 5,000.00   |   |   | 155,000.00 |   |
| Handling                tools (tongs, slips, elevators) Pipe spinner to suit                tubulars  |   |                               | 200,000.00   |                                         |   |                              |   |      | 5,000.00   |   |   | 205,000.00 |   |
| Tuggers,                air winch and wire line unit                                                  |   |                               | 60,000.00    |                                         |   | 10,000.00                    |   |      | 5,000.00   |   |   | 75,000.00 |   |
| Cold                start and air compressors                                                         |   |                               | 110,000.00   |                                         |   | 15,000.00                    |   |      | 5,000.00   |   |   | 130,000.00 |   |
| Instrumentation                                                                                       |   |                               | 75,000.00    |                                         |   | 15,000.00                    |   |      | 1,000.00   |   |   | 91,000.00 |   |
| Wire                rope & bridle line                                                            |   |                               | 55,000.00    |                                         |   |                              |   |      | 5,000.00   |   |   | 60,000.00 |   |
| *                Suitcases & grasshopper/rig stairs                                               |   |                               | 70,000.00    |                                         |   |                              |   |      | 5,000.00   |   |   | 75,000.00 |   |
| 15,000'                of 5" Grade S-135 (19.5 lbs/ft.)                                               |   |                               | 960,000.00   |                                         |   |                              |   |      | 100,000.00 |   |   | 1,060,000.00 |   |
| Drill                collars 30 ea x 6 1⁄2", 6 ea. X 8"; 3 ea. 9 1/2" drill                collars |   |                               | 230,000.00   |                                         |   |                              |   |      | 40,000.00  |   |   | 270,000.00 |   |
| HWDP                5" x 50 joints                                                                    |   |                               | 235,000.00   |                                         |   |                              |   |      | 30,000.00  |   |   | 265,000.00 |   |
| *                Double walled fuel tank c/w pump                                                     |   |                               | 75,000.00    |                                         |   |                              |   |      | 1,000.00   |   |   | 76,000.00 |   |
| EZ-Torque                hydraulic system                                                             |   |                               | 30,000.00    |                                         |   | 2,000.00                     |   |      | 1,000.00   |   |   | 33,000.00 |   |
| Rig                hydraulic pump, tank and hook up                                                   |   |                               | 85,000.00    |                                         |   | 20,000.00                    |   |      | 2,000.00   |   |   | 107,000.00 |   |
| *                Sandblasting & paint                                                             |   |                               | 78,000.00    |                                         |   |                              |   |      | 1,000.00   |   |   | 79,000.00 |   |
| Kelly                hose, shock hoses & fire proof hoses                                         |   |                               | 62,000.00    |                                         |   |                              |   |      | 5,000.00   |   |   | 67,000.00 |   |
| Miscellaneous                equipment                                                                |   |                               | 100,000.00   |                                         |   |                              |   |      | 5,000.00   |   |   | 105,000.00 |   |
| *                Complete electrical                                                                  |   |                               | 225,000.00   |                                         |   |                              |   |      |            |   |   | 225,000.00 |   |
| Rig                and mechanic tools                                                                 |   |                               | 15,000.00    |                                         |   |                              |   |      |            |   |   | 15,000.00 |   |
| Rig                up costs (cranes, trucks)                                                          |   |                               | 150,000.00   |                                         |   |                              |   |      |            |   |   | 150,000.00 |   |
| *                Labor                                                                                |   |                               | 630,000.00   |                                         |   |                              |   |      |            |   |   | 630,000.00 |   |
|                                                                                                  |   |                               |              |                                         |   |                              |   |      |            |   |   |  |   |
| **Total**                                                                                             |   |                               | 8,975,000.00 |                                         |   | **                862,000.00 |   |      | 638,000.00 |   |   | 10,475,000.00 |   |
|                                                                                                  |   |                               |              |                                         |   |                              |   |      |            |   |   |  |   |
| Optional                Equipment                                                                     |   |                               |              |                                         |   |                              |   |      |            |   |   | Cost plus 15 | % |
| a                650 Ton Top Drive                                                                    |   |                               |              |                                         |   |                              |   |      |            |   |   | Cost plus 15 | % |
| b                Rig Matting                                                                          |   |                               |              |                                         |   |                              |   |      |            |   |   | Cost plus 15 | % |
| c                Convert rig to AC power                                                              |   |                               |              |                                         |   |                              |   |      |            |   |   | Cost plus 15 | % |
| d                Purchase 125 hp boiler and winterize rig                                             |   |                               |              |                                         |   |                              |   |      |            |   |   | Cost plus 15 | % |

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|   | · | Scouting                for suitable rigs and rig components to ship to Newfoundland and                refining                material lists and cost estimates to procure, ship and refurbish                selected                rigs. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Negotiating                with interested oil companies for the pre-purchase of the initial                batch of                rigs. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Establishing                a wholly-owned subsidiary in Newfoundland, to handle the refurbishment                business. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------|

|   | · | Securing                key personnel under long-term                contracts. |
|--------|--------|---------------------------------------------------------------------------------|

|   | · | Conducting                site tours to inventory the college facilities and identify any additional                equipment that will need to be                purchased. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Negotiating                with the technical college to better define the training program                and the                business relationship with the                college. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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*Galveston      Bay Developments*

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*Recent      Developments*

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*Research      and Development Expenses*

*Costs      and Effects of Compliance with Environmental Laws*

*Employees*

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*Our      stock trades in a limited public market and is subject to price volatility.       *

*We      have a history of operating losses and an accumulated deficit and we expect      to      continue to incur losses for the foreseeable future.*

*Our      shareholders may suffer significant dilution as a result of contemplated capital      raising activities and the failure to raise substantial additional capital      to      fund operations could force the Company to delay, reduce or eliminate its      products and services.* 

*Exploration      of oil and gas is highly speculative and involves a great deal of      risk.*

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*We      will have to expend significant amounts in connection with our evaluation of      potential oil reserves and there can be no assurance that these efforts will      result in the identification of viable resources.*

*We      do      not currently own the leases to the Newfoundland properties in which we have      an      interest in exploring.*

*Our      oil and gas activities are subject to various risks which are beyond our      control.*

|   | · | human                error, accidents, labor force and other factors beyond our control                that                may cause personal injuries or death to persons and destruction or                damage                to equipment and facilities; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | · | blowouts,                fires, hurricanes, pollution and equipment failures that may result                in                damage to or destruction of wells, producing formations, production                facilities and equipment; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | unavailability                of materials and equipment; |
|--------|--------|-----------------------------------------------------------|

|   | · | engineering                and construction delays; |
|--------|--------|-----------------------------------------------------|

|   | · | unanticipated                transportation costs and delays; |
|--------|--------|---------------------------------------------------------------|

|   | · | unfavorable                weather conditions; |
|--------|--------|------------------------------------------------|

|   | · | hazards                resulting from unusual or unexpected geological or environmental                conditions; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------|

|   | · | environmental                regulations and requirements; |
|--------|--------|------------------------------------------------------------|

|   | · | accidental                leakage of toxic or hazardous materials, such as petroleum liquids                or                drilling fluids, into the                environment; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | changes                in laws and regulations, including laws and regulations applicable                to oil                and gas activities or markets for the oil and gas                produced; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | fluctuations                in supply and demand for oil and gas causing variations of the prices                we                receive for our oil and gas production;                and |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | the                internal and political decisions of OPEC and oil and natural gas                producing                nations and their impact upon oil and gas                prices. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

*The      unavailability or high cost of drilling rigs, equipment, supplies, personnel      and      oil field services could adversely affect our ability to execute our exploration      and development plans on a timely basis and within our budget.*

*“Business—Galveston      Bay Developments”*

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*We      could be adversely affected by fluctuations in oil and gas      prices.*

*We      could be adversely affected by increased costs of service providers that we      utilize.*

*We      have no experience in the rig building/refurbishment business and are relying      on      the expertise of third parties.*

*We      could have difficulty locating candidate rigs for the rig building/refurbishment      business or market conditions could change thus rendering our business model      unprofitable.*

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*We      anticipate that we will utilize horizontal drilling techniques, which could      result in greater mechanical risks and impair our ability to maximize      production.*

*Our      insurance policies may not adequately protect us against certain unforeseen      risks.*

*Our      activities are subject to extensive governmental regulation.*

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*We      are subject to various environmental risks, and governmental regulation relating      to environmental matters.*

*We      are subject to intense competition.*

*We      currently depend on our Chief Executive Officer and may have difficulty      attracting additional qualified personnel as our business      grows.* 

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*Certain      restricted shares of the Company are or will be eligible for sale in the future      which could affect the prevailing market price of our Common      Stock.*

*We      do      not expect to declare or pay any dividends in the foreseeable      future.*

*Our      Common Stock may be subject to secondary trading restrictions related to penny      stocks.*

*Our      directors and executive officers own a substantial amount of Common Stock,      which      permits them to exercise significant control over material corporate      decisions.*

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*We      cannot be certain that previous equity offerings by the Company were in      compliance with securities laws and regulations.*

*We      currently may be out of compliance with certain covenants under our secured      credit facility.*

*Business—Galveston      Bay Developments,*

**Item      2.**
**      Description of Property.**

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*Business—Galveston      Bay Developments,*

**Item      3. Legal Proceedings.**

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*“Business—Galveston      Bay Developments”*

**Item      4. Submission of Matters to a Vote of Security Holders.**

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**PART      II**

**Item      5.**
**      Market for Common Equity and Related Stockholder Matters.**

The      following sets forth the range of the closing bid prices for the Company's      Common Stock for the period starting May 7, 2004 through December 31, 2007.      The      quotations below, provided by Pink Sheets, LLC and the OTC Bulletin Board®,      reflect inter-dealer prices without retail markup, mark down or commission,      and      may not represent actual transactions. The quotations prior to October 14,      2005,      have not been adjusted for the 100-to-1 reverse stock split that occurred on      that date.

|                                       |   | 2004 |   |
|--------------------------------------------|--------|------|--------|
|                                       |   | High |   | Low |   |
| 4                th                Quarter |   | $    | 0.035  |   | $ | 0.001 |   |

|                                                               |   | 2005   |   |
|--------------------------------------------------------------------|--------|--------|--------|
|                                                               |   | High   |   | Low |   |
| 1                st                Quarter                         |   |   | 0.064  |   |   | 0.018 |   |
| 2                nd                Quarter                         |   |   | 0.05   |   |   | 0.001 |   |
| 3                rd                Quarter                         |   |   | 0.0095 |   |   | 0.003 |   |
| October                3 through October 13                        |   |   | 0.008  |   |   | 0.005 |   |
| *DATE                OF 100-to-1 REVERSE SPLIT - OCTOBER 14, 2005* |   |   |   |   |   |   |   |
| October                14 through December 30                      |   |   | 0.64   |   |   | 0.01 |   |

|                                       |   | 2006   |   |
|--------------------------------------------|--------|--------|--------|
|                                       |   | High   |   | Low |   |
| 1                st                Quarter |   |   | 0.45   |   |   | 0.25 |   |
| 2                nd                Quarter |   |   | 0.75   |   |   | 0.20 |   |
| 3                rd                Quarter |   |   | 0.50   |   |   | 0.25 |   |
| 4                th                Quarter |   |   | 1.25   |   |   | 0.40 |   |

|                                           |   | 2007                    |   |
|------------------------------------------------|--------|------------------------------|--------|
|                                           |   | High                         |   | Low |   |
| 1                  st                  Quarter |   |                         | 1.10   |   |   | 0.55 |   |
| 2                  nd                  Quarter |   |                         | 2.60   |   |   | 1.05 |   |
| 3                  rd                  Quarter |   |                         | 1.90   |   |   | 0.40 |   |
| 4th                  Quarter                   |   |                         | 0.61   |   |   | 0.22 |   |

----

**Item      6. Management’s Discussion and Analysis or Plan of      Operation.**

*Stock-Based      Compensation.*

*Intangible      Assets.*

***Forecasted      Activities December 2007 to December 2008***

|   | · | Drill                an onshore-to-offshore well in Block EL-1069, to a bottom-hole location                which has the potential to produce commercial                hydrocarbons. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Obtain                approval to conduct an intense 3D seismic survey over the area’s offshore                prospects. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------|

|   | · | Further                establish our general presence and enhance our company profile in                Newfoundland. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------|

|   | · | Continue                working with the Canadian government on an apprenticeship training                program                for the rig refurbishment business with the provincial technical                college. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Begin                remodeling of the rig refurbishment center located in Stephenville,                Newfoundland. The Company will purchase a 50,000 square foot building                previously used as a hockey stadium to use as its                center. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | · | Secure                and purchase two used drilling rigs for                refurbishment. |
|--------|--------|---------------------------------------------------------------------------------------------|

|   | · | An                *exploration                permit*                ,                issued as a result of a Request for Bids, confers the exclusive right                to                drill and test for petroleum on designated lands. It is valid for                a                primary term of five (5) years and can be extended for a further                secondary                term of two (2) years if certain conditions are                met. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | An                *exploration                license*                does not confer any petroleum rights, but confers the non-exclusive                right                to conduct an exploration survey ( *e.g.*                seismic program) described in the license. An exploration license                is valid                for 180 days. We have been granted an exploration license with respect                to                our 3D seismic survey. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | A                *lease*                ,                issued as a result of a discovery on an exploration permit, confers                to the                lessee the exclusive right to develop and produce a petroleum pool                in the                lease area. A lease has an initial term of 10 years, subject to five                (5)                year renewals for those areas still in production or necessary for                production. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | An                *exploration                license*                ,                issued as a result of a Request for Bids, confers the right to explore                for, and the exclusive right to drill and test for petroleum on designated                lands, as well as the exclusive right to develop those portions of                the                offshore area in order to produce petroleum and the exclusive right,                subject to compliance with other requirements, to obtain a production                license. An exploration license is valid for a primary term of nine                (9)                years, consisting of two consecutive periods of five (5) years and                four                (4) years, respectively, with certain milestones that must be completed                in                the first five years for the license holder to continue to have rights                in                the latter four years. At the end of nine years, all rights to an                area                terminate unless the area becomes subject to a significant discovery                license or a production license. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | A                *significant                discovery license*                may be granted with respect to an area as a result of an application                for a                declaration of significant discovery. It grants the same rights as                an                exploration license, and effectively extends rights to an area for                so long                as the relevant declaration of significant discovery is in force,                or until                a production license is issued for the relevant lands. The government                retains significant authority over drilling orders and development                orders. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | A                *production                license*                is                issued where a commercial discovery is declared, which is a discovery                of                petroleum that has been demonstrated to contain reserves that justify                the                investment of capital and effort to bring the discovery to production.                A                production license confers the following: the right to explore for,                and                the exclusive right to drill and test for, petroleum; the exclusive                right                to develop those portions of the offshore area in order to produce                petroleum; the exclusive right to produce petroleum from those portions                of                the offshore area; and title to the petroleum so produced. A production                license is effective from the date it is issued for a term of twenty-five                (25) years or for such period thereafter during which commercial                production continues. The government retains significant authority                over                drilling orders and development                orders. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

*Business—Galveston      Bay Developments*

----

----

----

----

----

**Item      7. Financial Statements **

----

|                                                                                                                                         |   | Page   |                      |
|----------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|---------------------------|
| Report                of Independent Registered Public Accounting Firm                                                                       |   |   | F-1                       |   |
|                                                                                                                                         |   |   |                      |   |
| Financial                Statements                                                                                                          |   |   |                      |   |
|                                                                                                                                         |   |   |                      |   |
| Consolidated                Balance Sheets as of December 31, 2007 and 2006                                                                  |   |   | F-2                       |   |
|                                                                                                                                         |   |   |                      |   |
| Consolidated                Statements of Operations for the years ended December 31, 2007 and                2006                           |   |   | F-3                       |   |
|                                                                                                                                         |   |   |                      |   |
| Consolidated                Statements of Stockholders’ Equity for the period January 1, 2006 through                December 31, 2007 |   |   | F-4                       |   |
|                                                                                                                                         |   |   |                      |   |
| Consolidated                Statements of Cash Flows for the years ended December 31, 2007 and                2006                           |   |   | F-5                -F- 6  |   |
|                                                                                                                                         |   |   |                      |   |
| Notes                to Consolidated Financial Statements                                                                                    |   |   | F-7                - F-34 |   |

----

**MADSEN          & ASSOCIATES CPA’S, INC.**

**684          EAST VINE STREET SUITE 3**

**MURRAY,          UTAH 84107**

**(801)          268-2632**

**REPORT          OF INDEPENDENT REGISTERED ACCOUNTING FIRM**

----

| TEKOIL                  & GAS CORPORATION AND SUBSIDIARIES |
|----------------------------------------------------------------|
| CONSOLIDATED                  BALANCE SHEET                    |

|                                                                                |   |
|--------------------------------------------------------------------------------|--------|
|                                                                           |   | December                  31, |   |
|                                                                           |   | 2007 |   | 2006 |   |
| ASSETS                                                                         |   |   |   |   |   |
| Current                  Assets:                                               |   |   |   |   |   |
| Cash                                                                           |   | $ | 3,070,834 |   | $ | 294,021 |   |
| Marketable                  securities - restricted                            |   |   | 6,527,419 |   |   | - |   |
| Accounts                  receivable                                           |   |   | 1,974,277 |   |   | - |   |
| Inventory                                                                      |   |   | 25,103 |   |   | - |   |
| Prepaid                  expenses                                              |   |   | 710,837 |   |   | 53,475 |   |
|  Total                  Current Assets                                    |   |   | 12,308,470 |   |   | 347,496 |   |
|                                                                           |   |   |   |   |   |   |   |
| Property                  and Equipment - net:                                 |   |   |   |   |   |   |   |
| Oil                  and gas mineral interests, equipment and facilities       |   |   | 54,182,021 |   |   | 458,871 |   |
|  (full                  cost method of accounting)                        |   |   |   |   |   |   |   |
| Other                  assets                                                  |   |   | - |   |   | 1,004,394 |   |
|                                                                           |   |   |   |   |   |   |   |
|                                                                           |   |   |   |   |   |   |   |
| TOTAL                  ASSETS                                                  |   | $ | 66,490,491 |   | $ | 1,810,761 |   |
|                                                                           |   |   |   |   |   |   |   |
| LIABILITIES                  AND STOCKHOLDERS' EQUITY                          |   |   |   |   |   |   |   |
| Current                  Liabilities:                                          |   |   |   |   |   |   |   |
| Accounts                  payable                                              |   | $ | 4,293,831 |   | $ | - |   |
| Accrued                  expenses                                              |   |   | 2,115,826 |   |   | 362,147 |   |
| Royalties                  payable                                             |   |   | 570,230 |   |   | - |   |
| Notes                  payable - related parties                               |   |   | 432,000 |   |   | 50,000 |   |
| Current                  portion of long-term debt                             |   |   | 31,533,893 |   |   | 4,261 |   |
| Asset                  retirement obligation                                   |   |   | 343,000 |   |   | - |   |
|  Total                  Current Liabilities                               |   |   | 39,288,780 |   |   | 416,408 |   |
|                                                                           |   |   |   |   |   |   |   |
| Long-term                  Liabilities:                                        |   |   |   |   |   |   |   |
| Royalties                  payable                                             |   |   | 1,535,865 |   |   | - |   |
| Long-term                  debt - less current portion above                   |   |   | 6,357,122 |   |   | 255,032 |   |
| Price                  risk market activity                                    |   |   | 2,157,404 |   |   | - |   |
| Asset                  retirement obligations                                  |   |   | 3,662,000 |   |   | - |   |
|  Total                  Long-term Liabilities                             |   |   | 13,712,391 |   |   | 255,032 |   |
|                                                                           |   |   |   |   |   |   |   |
| TOTAL                  LIABILITIES                                             |   |   | 53,001,171 |   |   | 671,440 |   |
|                                                                           |   |   |   |   |   |   |   |
| Minority                  interest in consolidated subsidiary                  |   |   | 5,251,990 |   |   | - |   |
|                                                                           |   |   |   |   |   |   |   |
| Commitments                  and Contingencies                                 |   |   |   |   |   |   |   |
|                                                                           |   |   |   |   |   |   |   |
| Stockholders'                  Equity:                                         |   |   |   |   |   |   |   |
|                                                                           |   |   |   |   |   |   |   |
| Preferred                  Stock, $.00000001 par value, authorized             |   |   |   |   |   |   |   |
|  20,000,000                  shares                                       |   |   |   |   |   |   |   |
|                                                                           |   |   |   |   |   |   |   |
|  Series                  A Convertible Preferred Stock, -0- and           |   |   |   |   |   |   |   |
|  2,985,000                  shares issued and outstanding at              |   |   |   |   |   |   |   |
|  December                  31, 2007 and 2006, respectively                |   |   | - |   |   | - |   |
|                                                                           |   |   |   |   |   |   |   |
| Common                  stock,par value $.000001 per share                     |   |   |   |   |   |   |   |
|  authorized                  200,000,000 shares;                          |   |   |   |   |   |   |   |
|  53,141,973                  and 21,624,175 shares issued and outstanding |   |   |   |   |   |   |   |
|  at                  December 31, 2007 and 2006, respectively             |   |   | 53 |   |   | 22 |   |
| Additional                  paid-in capital                                    |   |   | 33,551,558 |   |   | 6,758,637 |   |
| Cummulative                  other comprehensive income (loss)                 |   |   | 45,274 |   |   | (772 | ) |
| Deficit                                                                        |   |   | (25,084,555 | ) |   | (5,618,566 | ) |
|                                                                           |   |   | 8,512,330 |   |   | 1,139,321 |   |
| Less                  cost of common stock in treasury,                        |   |   |   |   |   |   |   |
|  500,000                  shares in 2007                                  |   |   | (275,000 | ) |   | - |   |
|                                                                           |   |   |   |   |   |   |   |
| Total                  Stockholders' Equity                                    |   |   | 8,237,330 |   |   | 1,139,321 |   |
|                                                                           |   |   |   |   |   |   |   |
| TOTAL                  LIABILITIES AND STOCKHOLDERS' EQUITY                    |   | $ | 66,490,491 |   | $ | 1,810,761 |   |

----

| TEKOIL                  & GAS CORPORATION AND SUBSIDIARIES |
|----------------------------------------------------------------|
| CONSOLIDATED                  STATEMENT OF OPERATIONS          |

|                                                          |   | Years                  Ended  |        |
|---------------------------------------------------------------|--------|-------------------------------|-------------|
|                                                          |   | December                  31, |        |
|                                                          |   | 2007                          |        | 2006 |   |
|                                                          |   |                          |        |   |   |
| Revenues:                                                     |   |                          |        |   |   |
|                                                          |   |                          |        |   |   |
| Oil                  sales                                    |   | $                             | 4,195,108   |   | $ | - |   |
| Gas                  sales                                    |   |                          | 2,517,383   |   |   | - |   |
| Transportation                  income                        |   |                          | 577,170     |   |   | - |   |
|                                                          |   |                          |        |   |   |   |   |
| Total                  revenues                               |   |                          | 7,289,661   |   |   | - |   |
| Less:                  Production taxes                       |   |                          | 276,095     |   |   | - |   |
|                                                          |   |                          |        |   |   |   |   |
| Net                  revenues                                 |   |                          | 7,013,566   |   |   | - |   |
|                                                          |   |                          |        |   |   |   |   |
| Cost                  and expenses:                           |   |                          |        |   |   |   |   |
| Leasehold                  operating expenses                 |   |                          |        |   |   |   |   |
| (including                  workover costs)                   |   |                          | 7,164,572   |   |   | - |   |
| Selling,                  general and administrative expenses |   |                          | 5,725,339   |   |   | 2,502,210 |   |
| Depreciation,                  depletion and amortization     |   |                          | 3,177,986   |   |   | 24,086 |   |
| Compensatory                  element of common               |   |                          |        |   |   |   |   |
| stock                  issurance                              |   |                          | 6,044,700   |   |   | 420,750 |   |
|                                                          |   |                          | 22,112,597  |   |   | 2,947,046 |   |
|                                                          |   |                          |        |   |   |   |   |
| Loss                  from operations                         |   |                          | (15,099,031 | ) |   | (2,947,046 | ) |
|                                                          |   |                          |        |   |   |   |   |
| Other                  income (expense):                      |   |                          |        |   |   |   |   |
| Other                  income                                 |   |                          | 12,490      |   |   | - |   |
| Interest                  income                              |   |                          | 160,954     |   |   | - |   |
| Interest                  expense                             |   |                          | (4,942,352  | ) |   | (9,480 | ) |
| Provision                  for price risk market activity     |   |                          | (2,157,404  | ) |   | - |   |
| Loss                  on investment                           |   |                          | -           |   |   | (10,000 | ) |
|                                                          |   |                          | (6,926,312  | ) |   | (19,480 | ) |
|                                                          |   |                          |        |   |   |   |   |
| Loss                  before minority interest                |   |                          | (22,025,343 | ) |   | (2,966,526 | ) |
|                                                          |   |                          |        |   |   |   |   |
| Minority                  interest share of (loss) of         |   |                          |        |   |   |   |   |
| consolidated                  subsidiary                      |   |                          | 2,559,354   |   |   | - |   |
|                                                          |   |                          |        |   |   |   |   |
| Loss                  before provision for income taxes       |   |                          | (19,465,989 | ) |   | (2,966,526 | ) |
|                                                          |   |                          |        |   |   |   |   |
| Provision                  for income taxes                   |   |                          | -           |   |   | - |   |
|                                                          |   |                          |        |   |   |   |   |
| Net                  loss                                     |   | $                             | (19,465,989 | ) | $ | (2,966,526 | ) |
|                                                          |   |                          |        |   |   |   |   |
| Loss                  per common share - basic and diluted    |   | $                             | (0.42       | ) | $ | (0.16 | ) |
|                                                          |   |                          |        |   |   |   |   |
| Weighted                  average number of common shares     |   |                          |        |   |   |   |   |
| outstanding                  - basic and diluted              |   |                          | 46,894,717  |   |   | 18,276,098 |   |

----

| TEKOIL                  & GAS CORPORATION AND SUBSIDIARIES  |
|-----------------------------------------------------------------|
| CONSOLIDATED                  STATEMENT OF STOCKHOLDERS' EQUITY |

|                                                                                                    |   |   |        | Comprehensive |   | Common                  Stock  |   | Series                  A Preferred Stock |                                                                     | AdditionalPaidin              |   | Treasury                                               |   | CumulativeOtherComprehensive |               |   |   |
|---------------------------------------------------------------------------------------------------------|--------|--------|-------------|---------------|--------|--------------------------------|--------|-------------------------------------------|--------------------------------------------------------------------------|-------------------------------|--------|--------------------------------------------------------|--------|------------------------------|--------------------|--------|--------|
|                                                                                                    |   | Total  |        | (Loss)        |   | No                  of shares  |   | Amount                                    |                                                                     | No                  of shares |   | Amount                                                 |   | Capital                      |               | Stock  |   | Income                  (loss) |   | Deficit |   |
| Balance,                  January 1, 2006                                                               |   | $      | 111,415     |          |   |                           |   |                                      | 17,472,005                                                               |                          | $      | 17                                                     |   |                         | 667,000            |   | $      | - |   | $ | 2,763,438 |   | $ | - |   | $ | - |   | $ | (2,652,040 | ) |
|                                                                                                    |   |   |        |          |   |                           |   |                                      |                                                                          |                          |   |                                                   |   |                         |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Sale                  of preferred stock                                                                |   |   | 2,268,000   |          |   |                           |   |                                      | -                                                                        |                          |   | -                                                      |   |                         | 2,268,000          |   |   | - |   |   | 2,268,000 |   |   | - |   |   |   |   |   | - |   |
|                                                                                                    |   |   |        |          |   |                           |   |                                      |                                                                     |                          |   |                                                   |   |                         |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance                  of preferred stock for services (valued at $1.00 per                  share)  |   |   | 50,000      |          |   |                           |   |                                      |                                                                     |                          |   |                                                   |   |                         | 50,000             |   |   | - |   |   | 50,000 |   |   | - |   |   |   |   |   |   |   |
|                                                                                                    |   |   |        |          |   |                           |   |                                      |                                                                     |                          |   |                                                   |   |                         |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Sale                  of common stock                                                                   |   |   | 1,050,000   |          |   |                           |   |                                      | 2,205,000                                                                |                          |   | 3                                                      |   |                         |               |   |   |   |   |   | 1,049,997 |   |   | - |   |   | - |   |   |   |   |
|                                                                                                    |   |   |        |          |   |                           |   |                                      |                                                                     |                          |   |                                                   |   |                         |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance                  of common stock for services (valued at $0.33 per share)                      |   |   | 627,204     |          |   |                           |   |                                      | 1,947,170                                                                |                          |   | 2                                                      |   |                         | -                  |   |   | - |   |   | 627,202 |   |   | - |   |   | - |   |   | - |   |
|                                                                                                    |   |   |        |          |   |                           |   |                                      |                                                                     |                          |   |                                                   |   |                         |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                  loss                                                                               |   |   | (2,966,526  | )             | $      | (2,966,526                     | )      |                                      | -                                                                        |                          |   | -                                                      |   |                         | -                  |   |   | - |   |   | - |   |   | - |   |   | - |   |   | (2,966,526 | ) |
|                                                                                                    |   |   |        |          |   |                           |   |                                      |                                                                     |                          |   |                                                   |   |                         |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Currency                  translation adjustment                                                        |   |   | (772        | )             |   | (772                           | )      |                                      | -                                                                        |                          |   | -                                                      |   |                         | -                  |   |   | - |   |   | - |   |   | - |   |   | (772 | ) |   | - |   |
| Comprehensive                  (loss)                                                                   |   |   |        |          | $      | (2,967,298                     | )      |                                      |                                                                     |                          |   |                                                   |   |                         |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                    |   |   |        |          |   |       |   |                                      |                             |                          |   |           |   |                         |     |   |   |   |   |   |   |   |   |   |   |   |      |   |   |       |   |
| Balance,                  December 31, 2006                                                             |   |   | 1,139,321   |          |   |                           |   |                                      | 21,624,175                                                               |                          |   | 22                                                     |   |                         | 2,985,000          |   |   | - |   |   | 6,758,637 |   |   |   |   |   | (772 | ) |   | (5,618,566 | ) |
|                                                                                                    |   |   |        |          |   |                           |   |                                      |                                                                     |                          |   |                                                   |   |                         |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Sale                  of preferred stock                                                                |   |   | 1,047,000   |          |   |                           |   |                                      | -                                                                        |                          |   | -                                                      |   |                         | 1,047,000          |   |   | - |   |   | 1,047,000 |   |   | - |   |   |   |   |   | - |   |
|                                                                                                    |   |   |        |          |   |                           |   |                                      |                                                                     |                          |   |                                                   |   |                         |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance                  of 9,000,000 shares of stock for acquisition                                  |   |   | 15,900,000  |          |   |                           |   |                                      | 9,000,000                                                                |                          |   | 9                                                      |   |                         | -                  |   |   | - |   |   | 15,899,991 |   |   | - |   |   |   |   |   |   |   |
|                                                                                                    |   |   |        |          |   |                           |   |                                      |                                                                     |                          |   |                                                   |   |                         |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance                  of 900,000 warrants (valued at $.44 per share)                                |   |   | 400,000     |          |   | -                              |   |                                      | -                                                                        |                          |   | -                                                      |   |                         | -                  |   |   | - |   |   | 400,000 |   |   | - |   |   |   |   |   |   |   |
|                                                                                                    |   |   |        |          |   |                           |   |                                      |                                                                     |                          |   |                                                   |   |                         |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Conversion                  of preferred stock into common stock                                        |   |   | -           |          |   | -                              |   |                                      | 12,266,000                                                               |                          |   | 12                                                     |   |                         | (4,032,000         | )      |   | - |   |   | (12 | ) |   | - |   |   |   |   |   |   |   |
|                                                                                                    |   |   |        |          |   |                           |   |                                      |                                                                     |                          |   |                                                   |   |                         |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Sale                  of common stock                                                                   |   |   | 2,745,252   |          |   |                           |   |                                      | 6,218,429                                                                |                          |   | 6                                                      |   |                         |               |   |   |   |   |   | 2,745,246 |   |   | - |   |   | - |   |   |   |   |
|                                                                                                    |   |   |        |          |   |                           |   |                                      |                                                                     |                          |   |                                                   |   |                         |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance                  of 7,000,000 stock options (valued at $0.064 per share)                       |   |   | 4,492,500   |          |   |                           |   |                                      | -                                                                        |                          |   | -                                                      |   |                         | -                  |   |   | - |   |   | 4,492,500 |   |   | - |   |   | - |   |   | - |   |
|                                                                                                    |   |   |        |          |   |                           |   |                                      |                                                                     |                          |   |                                                   |   |                         |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance                  of common stock for services (valued at $0.40 per share)                      |   |   | 677,400     |          |   |                           |   |                                      | 1,686,000                                                                |                          |   | 2                                                      |   |                         | -                  |   |   | - |   |   | 677,398 |   |   | - |   |   | - |   |   | - |   |
|                                                                                                    |   |   |        |          |   |                           |   |                                      |                                                                     |                          |   |                                                   |   |                         |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance                  of 3,571,429 stock options (valued at $0.25 per share)                        |   |   | 885,800     |          |   | -                              |   |                                      | -                                                                        |                          |   | -                                                      |   |                         | -                  |   |   | - |   |   | 885,800 |   |   | - |   |   | - |   |   | - |   |
|                                                                                                    |   |   |        |          |   |                           |   |                                      |                                                                     |                          |   |                                                   |   |                         |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance                  of common stock for debt (valued at $0.25 - $0.38 per                  share) |   |   | 645,000     |          |   | -                              |   |                                      | 2,347,369                                                                |                          |   | 2                                                      |   |                         | -                  |   |   | - |   |   | 644,998 |   |   | - |   |   | - |   |   |   |   |
|                                                                                                    |   |   |        |          |   |                           |   |                                      |                                                                     |                          |   |                                                   |   |                         |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Acquisition                  of treasury stock                                                          |   |   | (275,000    | )             |   | -                              |   |                                      | -                                                                        |                          |   | -                                                      |   |                         | -                  |   |   | - |   |   | - |   |   | (275,000 | ) |   | - |   |   | - |   |
|                                                                                                    |   |   |        |          |   |                           |   |                                      |                                                                     |                          |   |                                                   |   |                         |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                  loss                                                                               |   |   | (19,465,989 | )             | $      | (19,465,989                    | )      |                                      | -                                                                        |                          |   | -                                                      |   |                         | -                  |   |   | - |   |   | - |   |   |   |   |   | - |   |   | (19,465,989 | ) |
|                                                                                                    |   |   |        |          |   |                           |   |                                      |                                                                     |                          |   |                                                   |   |                         |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Currency                  translation adjustment - net of taxes                                         |   |   | 46,046      |          |   | 46,046                         |   |                                      | -                                                                        |                          |   | -                                                      |   |                         | -                  |   |   | - |   |   | - |   |   |   |   |   | 46,046 |   |   | - |   |
| Comprehensive                  (loss)                                                                   |   |   |        |          | $      | (19,419,943                    | )      |                                      |                                                                     |                          |   |                                                   |   |                         |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                    |   |   |        |          |   |                           |   |                                      |                                                                     |                          |   |                                                   |   |                         |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance,                  December 31, 2007                                                             |   | $      | 8,237,330   |          |   |                           |   |                                      | 53,141,973                                                               |                          | $      | 53                                                     |   |                         | -                  |   | $      | - |   | $ | 33,551,558 |   | $ | (275,000 | ) | $ | 45,274 |   | $ | (25,084,555 | ) |

----

| TEKOIL                  & GAS CORPORATION AND SUBSIDIARIES |
|----------------------------------------------------------------|
| CONSOLIDATED                  STATEMENT OF CASH FLOWS          |

|                                                             |   | Years                  Ended  |        |
|------------------------------------------------------------------|--------|-------------------------------|-------------|
|                                                             |   | December                  31, |        |
|                                                             |   | 2007                          |        | 2006 |   |
| Cash                  flows from operating activities:           |   |                          |        |   |   |
| Net                  loss                                        |   | $                             | (19,465,989 | ) | $ | (2,966,526 | ) |
| Adjustments                  to reconcile net loss               |   |                          |        |   |   |   |   |
| to                  net cash used in operating activities:       |   |                          |        |   |   |   |   |
| Depreciation,                  depletion and amortization        |   |                          | 3,177,986   |   |   | 24,086 |   |
| Non                  cash fair value of stock for services       |   |                          | 677,400     |   |   | 677,204 |   |
| Non                  cash value of stock options                 |   |                          | 5,378,300   |   |   | - |   |
| Price                  risk market activity                      |   |                          | 2,157,404   |   |   | - |   |
| Minority                  interest loss                          |   |                          | (2,559,354  | ) |   | - |   |
| Accretion                  on long term debt                     |   |                          | 1,343,847   |   |   | - |   |
| Changes                  in operating assets                     |   |                          |        |   |   |   |   |
| and                  liabilities:                                |   |                          | 4,808,470   |   |   | 290,758 |   |
| Net                  Cash Used in Operating Activities           |   |                          | (4,481,936  | ) |   | (1,974,478 | ) |
|                                                             |   |                          |        |   |   |   |   |
| Cash                  flows from investing activities:           |   |                          |        |   |   |   |   |
| Purchase                  of property, plant and                 |   |                          |        |   |   |   |   |
| equipment                                                        |   |                          | (4,359,008  | ) |   | (475,546 | ) |
| Payment                  on acquisition                          |   |                          | (31,607,582 | ) |   | (1,000,000 | ) |
| Payment                  for marketable securities - restricted  |   |                          | (6,370,000  | ) |   | - |   |
|                                                             |   |                          |        |   |   |   |   |
| Net                  Cash Flows Used in Investing Activities     |   |                          | (42,336,590 | ) |   | (1,475,546 | ) |
|                                                             |   |                          |        |   |   |   |   |
| Cash                  flows from financing activities:           |   |                          |        |   |   |   |   |
| Proceeds                  from issuance of common                |   |                          |        |   |   |   |   |
| stock                                                            |   |                          | 2,745,252   |   |   | 1,050,000 |   |
| Proceeds                  from borrowings                        |   |                          | 45,420,173  |   |   | 260,318 |   |
| Proceeds                  from issuance of preferred             |   |                          |        |   |   |   |   |
| stock                                                            |   |                          | 1,047,000   |   |   | 2,268,000 |   |
| Repayment                  of debt                               |   |                          | (4,951      | ) |   | (1,025 | ) |
| Proceeds                  from borrowings - related parties      |   |                          | 1,274,500   |   |   | - |   |
| Repayment                  of debt - related parties             |   |                          | (247,500    | ) |   | - |   |
| Repayment                  of royalties                          |   |                          | (364,135    | ) |   | - |   |
| Common                  stock purchased for the treasury         |   |                          | (275,000    | ) |   | - |   |
| Net                  Cash Flows Provided by Financing Activities |   |                          | 49,595,339  |   |   | 3,577,293 |   |
|                                                             |   |                          |        |   |   |   |   |
| Effect                  of exchange rate changes on cash         |   |                          | -           |   |   | (772 | ) |
|                                                             |   |                          |        |   |   |   |   |
| Net                  Increase in cash                            |   |                          | 2,776,813   |   |   | 126,497 |   |
|                                                             |   |                          |        |   |   |   |   |
| Cash                  - beginning of period                      |   |                          | 294,021     |   |   | 167,524 |   |
|                                                             |   |                          |        |   |   |   |   |
| Cash                  - end of period                            |   | $                             | 3,070,834   |   | $ | 294,021 |   |

----

| TEKOIL                  & GAS CORPORATION AND SUBSIDIARIES    |
|-------------------------------------------------------------------|
| CONSOLIDATED                  STATEMENT OF CASH FLOWS (continued) |

|                                                                                                         |   | Years                    Ended  |       |
|--------------------------------------------------------------------------------------------------------------|--------|---------------------------------|------------|
|                                                                                                         |   | December                    31, |       |
|                                                                                                         |   | 2007                            |       | 2006 |   |
|                                                                                                         |   |                            |       |   |   |
| Supplementary                    information:                                                                |   |                            |       |   |   |
| Cash                    paid during the year for:                                                            |   |                            |       |   |   |
| Interest                                                                                                     |   | $                               | 3,520,917  |   | $ | 5,517 |   |
| Income                    taxes                                                                              |   | $                               | -          |   | $ | - |   |
|                                                                                                         |   |                            |       |   |   |   |   |
| Non-cash                    financings activities:                                                           |   |                            |       |   |   |   |   |
| Issuance                    of preferred stock for services                                                  |   | $                               | -          |   | $ | 50,000 |   |
| Issuance                    of common stock for services                                                     |   | $                               | 677,400    |   | $ | 627,204 |   |
| Issuance                    of common stock for debt                                                         |   | $                               | 645,000    |   | $ | - |   |
|                                                                                                         |   |                            |       |   |   |   |   |
| Changes                    in operating assets and liabilities consists of the                    following: |   |                            |       |   |   |   |   |
| Increase                    in accounts receivable                                                           |   | $                               | (1,974,277 | ) | $ | - |   |
| Increase                    in interest receivable                                                           |   |                            | (157,419   | ) |   | - |   |
| Increase                    in inventory                                                                     |   |                            | (112,116   | ) |   | - |   |
| Increase                    in prepaid expenses                                                              |   |                            | (570,349   | ) |   | (53,475 | ) |
| Decrease                    in other assets                                                                  |   |                            | 1,004,393  |   |   | 5,606 |   |
| Increase                    in accrued expenses and accounts payable                                         |   |                            | 6,618,238  |   |   | 338,627 |   |
|                                                                                                         |   |                            |       |   |   |   |   |
|                                                                                                         |   | $                               | 4,808,470  |   | $ | 290,758 |   |
|                                                                                                         |   |                            |       |   |   |   |   |
|                                                                                                         |   |                            |       |   |   |   |   |
| Details                    of acquisition:                                                                   |   |                            |       |   |   |   |   |
| Fair                    value of net assets received                                                         |   | $                               | 47,507,582 |   |   |   |   |
| Less:                                                                                                        |   |                            |       |   |   |   |   |
| Issuance                    of common stock                                                                  |   |                            | 15,900,000 |   |   |   |   |
| Cash                    paid for acquisition                                                                 |   | $                               | 31,607,582 |   |   |   |   |

----

| 1. | DESCRIPTION                OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING                POLICIES |
|----|------------------------------------------------------------------------------------------------------|

*Organization*

*Basis      of Presentation*

----

*Going      Concern*

----

----

----

----

----

----

| 2. | ACQUISITION |
|----|-------------|

----

----

----

----

|                                |   | Year                Ended   |    |
|-------------------------------------|--------|-----------------------------|---------|
|                                |   | December                31, |    |
|                                |   | 2007                        |    | 2006 |   |
| Net                revenue          |   | $                           | 10,013  |   | $ | 13,056 |   |
|                                |   |                        |    |   |   |   |   |
| Net                loss             |   | $                           | (19,286 | ) | $ | (4,171 | ) |
|                                |   |                        |    |   |   |   |   |
| Net                loss per share - |   |                        |    |   |   |   |   |
| basic                and diluted    |   | $                           | (0.41   | ) | $ | (0.22 | ) |

| Property,                plant and equipment |   | $      | 17,926,213 |   |
|----------------------------------------------|--------|--------|------------|--------|
| Oil                and mineral interests     |   |   | 29,581,369 |   |
|                                         |   | $      | 47,507,582 |   |

----

| 3. | FARMOUT                AGREEMENT |
|----|----------------------------------|

| 3. | PROPERTY                AND EQUIPMENT |
|----|---------------------------------------|

----

|                                                     |   | December                31, |       |
|----------------------------------------------------------|--------|-----------------------------|------------|
|                                                     |   | 2007                        |       | 2006 |   |
| Building                and improvements                 |   | $                           | 415,356    |   | $ | 358,032 |   |
| Tangible                oil producing equipment          |   |                        | 18,016,086 |   |   | - |   |
| Equipment                and fixtures                    |   |                        | 542,102    |   |   | 125,748 |   |
|                                                     |   |                        | 18,973,544 |   |   | 483,780 |   |
| Less:                Accumulated depreciation            |   |                        | (510,468   | ) |   | 24,909 |   |
| Subtotal                                                 |   |                        | 18,463,076 |   |   | 458,871 |   |
|                                                     |   |                        |            |   |   |  |   |
| Oil                and gas leases                        |   |                        | 38,411,372 |   |   | - |   |
| Less:                Accumulated depletion               |   |                        | (2,692,427 | ) |   | - |   |
| Net                oil and gas leases                    |   |                        | 35,718,945 |   |   | - |   |
|                                                     |   |                        |       |   |   |   |   |
| Total                property, plant and equipment - net |   | $                           | 54,182,021 |   | $ | 458,871 |   |

| 4. | NOTES                PAYABLE - RELATED PARTIES |
|----|------------------------------------------------|

|   | a) | On                December 15, 2005 the Company issued an unsecured promissory note                at prime                plus 1% (8.5% at December 31, 2007) to a related party in the amount                of                $50,000, with principal and interest due at maturity on June 15,                2006.                This note was extended to June 30, 2008. At the option of the lender,                any                time prior to maturity the lender can convert the loan into 150,000                shares                of the Company’s common stock, at the fair value at the time the note was                issued. |
|--------|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | b) | During                2007, certain shareholders of the Company, including the Company’s Chief                Executive Officer and Chief Financial Officer, advanced funds in                the                amount of $1,280,000 for working capital. The funds advanced by the                Chief                Executive Officer and Chief Financial Officer are due upon demand                and bear                no interest. In December 2007, the Chief Executive Officer converted                $645,000 of his debt into 2,347,369 shares of the Company’s common stock                (valued at $0.25 - $0.38 per share). As of December 31, 2007, the                balance                due the Chief Executive Officer and Chief Financial Officer after                repayments of $90,500 and partial conversion of debt to common stock                was                $232,000. The balance of the advances by other shareholders of $150,000                at                December 31, 2007 is due in April 2008 with interest at 10% per annum                payable at maturity. For the year ended December 31, 2007, the Company                recorded interest expense of $8,365. |
|--|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 5. | LONG-TERM                DEBT |
|----|-------------------------------|

|  | a) | On                September 15, 2006, the Company entered into a mortgage agreement                with                CIBC Mortgages Inc. The Company borrowed $260,318 to purchase a building                in St. John’s, Newfoundland. The mortgage bears interest equal to the CIBC                Prime Rate plus 0.667% (6.667% at December 31, 2007). The mortgage                matures                September 15, 2011. The mortgage is collateralized by the building                in                Newfoundland and a personal guarantee by the Company’s Chief Financial                Officer. |
|--|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | b) | On                May 11, 2007, in connection with the acquisition of the Galveston                Bay                properties located in Galveston Bay, Texas, the Company borrowed                $30                million of a $50 million Senior Secured Credit Facility arranged                by                Goldman, Sachs E & P Capital. The $30 million funded portion of the                loan is guaranteed by the Company and secured by the Galveston Bay                Properties, has a term of 48 months, bears interest at an initial                rate of                libor plus 800 basis points (15.2% at December 31, 2007) and is amortized                by available net cash flow from the Galveston Bay Properties (after                payment of certain related lease operating and overhead expenses,                a                portion of which are allowed to the Company under certain                circumstances.) |
|--|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | c) | On                October 24, 2007, the Company and Tri Star Capital Ventures Limited                (“Tri                Star”) entered into a loan agreement (“Loan Agreement”), pursuant to which                Tri Star agreed to lend the Company $8.5 million (the “Tri Star Loan”).                The proceeds of the Tri Star Loan were used to make the $7.5 million                equity contribution to the Subsidiary as required in the Credit Agreement                and to pay certain costs and expenses of the Subsidiary. The Company                is                obligated to make monthly payments of principal on the Tri Star Loan                equal                to $708,333, beginning on May 1, 2008. The Tri Star Loan matures                on April                15, 2009 and accrues interest at an annual rate of                13%. |
|--------|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|  | d) | On                July 11, 2007 and December 6, 2007, the Company executed two unsecured                promissory notes with Geophysical Pursuit, Inc. in the total amount                of                $983,500. The two unsecured notes bear interest at 8% annum and are                due                upon demand. The parties are in negotiations on repayment terms.                For the                year ended December 31, 2007, interest expense amounted to                $24,236. |
|--|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|  | e) | On                October 3, 2007, the Company executed two promissory notes for a                total                amount of $50,000. The notes bear interest at 10% per annum and mature                February 4, 2008. The notes have not been paid and the Company has                received a demand letter from the lenders. For the year ended December                31,                2007, interest expense amounted to                $1,205. |
|--|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | f) | On                November 13, 2007, the Company’s Newfoundland subsidiary executed an                unsecured promissory note for $76,455. The note bears interest at                10% per                annum and is payable on demand. For the year ended December 31, 2007,                interest expense amounted to $938. |
|--|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2008                                 |   | $      | 31,533,893 |   |
|--------------------------------------|--------|--------|------------|--------|
| 2009                                 |   |   | 6,072,075  |   |
| 2010                                 |   |   | 5,919      |   |
| 2011                                 |   |   | 6,327      |   |
| 2012                                 |   |   | 6,761      |   |
| Thereafter                           |   |   | 266,050    |   |
|                                 |   |   | 37,891,025 |   |
| Less:                current portion |   |   | 31,533,893 |   |
|                                 |   | $      | 6,357,132  |   |

| 6. | INCOME                TAXES |
|----|-----------------------------|

| 7. | ROYALTY                PAYABLE |
|----|--------------------------------|

----

| 8. | ACCRUED                EXPENSES |
|----|---------------------------------|

|                                      |   | December                31, |      |
|-------------------------------------------|--------|-----------------------------|-----------|
|                                      |   | 2007                        |      | 2006 |   |
| Oil                and gas properties     |   | $                           | 506,796   |   | $ | - |   |
| Professional                fees          |   |                        | 1,034,631 |   |   | 311,660 |   |
| Price                risk market activity |   |                        | 129,864   |   |   | - |   |
| Payroll                expense            |   |                        | -         |   |   | 37,421 |   |
| Insurance                expense          |   |                        | 163,000   |   |   | - |   |
| Interest                expense           |   |                        | 111,513   |   |   | 3,963 |   |
| Other                                     |   |                        | 170,022   |   |   | 9,103 |   |
|                                      |   | $                           | 2,115,826 |   | $ | 362,147 |   |

| 9. | ASSET                RETIREMENT OBLIGATIONS |
|----|---------------------------------------------|

| Asset                retirement obligation at December 31, 2006     |   | $      | -          |   |
|---------------------------------------------------------------------|--------|--------|------------|--------|
| Additional                retirement obligations recorded in 2007   |   |   | 6,370,000  |   |
| Settlements                during 2007                              |   |   | -          |   |
| Revisions                to estimates and other changes during 2007 |   |   | (2,365,000 | )      |
|                                                                |   |   |       |   |
| Asset                retirement obligation at December 31, 2007     |   | $      | 4,005,000  |   |

----

| 10. | STOCKHOLDERS'                EQUITY |
|-----|-------------------------------------|

|   | a) | The                Company is authorized to issue 200,000,000 shares of .000001 par                value                Common Stock. All the outstanding Common Stock is fully paid and                non-assessable. The total proceeds received for the Common Stock                is the                value used for the Common Stock. |
|--------|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | b) | During                the year ended December 31, 2007, the Company sold 6,218,429 shares                of its                Common Stock through private placements at purchase prices of $0.25                -                $0.75 per share, for an aggregate purchase price of                $2,745,252. |
|--------|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | c) | On                November 20, 2006, the Company sold 2,205,000 shares of its Common                Stock                at a purchase price of approximately $0.4762 per share, for an aggregate                purchase price of $1,050,000. Such shares were subject to a put option,                which has since expired. |
|--------|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | · | The                holders of Common Stock are entitled to one vote for each share held                of                record on all matters to be voted on by stockholders. Each outstanding                share of Series A Convertible Preferred Stock entitle the holder                thereof                to vote on all matters on which holders of Common Stock are entitled                to                vote, and the holders of Series A Convertible Preferred Stock and                of                Common Stock vote together as a single class. With respect to any                such                vote, each share of Series A Convertible Preferred Stock entitles                the                holder to cast the number of votes per share as is equal to the number                of                votes that such holder would be entitled to cast had such holder                converted                its shares of Series A Convertible Preferred Stock into Share of                Common                Stock, such conversion rate being three (3) shares of Common Stock                for                each share of Series A Convertible Preferred Stock. There is no cumulative                voting, with the result that the holders of more than 50% if the                shares                voting for the election of directors can elect all of the                directors. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The                holders of Common Stock and the holders of Series A Convertible Preferred                Stock are entitled to receive dividends when, as and if declared                by the                Board of Directors for each such class of stock out of the funds                legally                available therefor. In the event of the liquidation, dissolution                or                winding up of the Company, the holders of Common Stock and the holders                of                Series A Convertible Preferred Stock are entitled to share ratably,                after                conversion of each share of Series A Convertible Preferred Stock                into                three (3) shares of Common Stock, in all assets remaining available                for                distribution after payment of liabilities and after provision has                been                made for each class of stock, if any, having preference over the                Common                Stock and the Series A Convertible Preferred                Stock. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Holders                of shares of Common Stock, as such, have no conversion, preemptive                or                other subscription rights, and there are no redemption provisions                applicable to the Common Stock. Each holder of shares of Series A                Convertible Preferred Stock has the right, at its option and without                further payment, to convert any or all of its shares of Series A                Convertible Preferred Stock into fully paid and non-assessable shares                of                Common Stock at the rate of three (3) shares of Common                Stock for each share of Series A Convertible Preferred Stock.                Each share of Series A Convertible Preferred Stock will automatically                convert into three (3) shares of Common Stock (i) immediately prior                to a                liquidation of the Company; (ii) immediately prior to an initial                public                offering by the Company, or (iii) at any time after July 29, 2006,                at the                sole discretion of the Company’s Board of Directors. The number and type                of securities to be received upon conversion of the Series A Convertible                Preferred Stock are subject to certain antidilution adjustments.                As                previously stated, on July 1, 2007, the Board of Directors converted                all                shares of Series A Convertible Preferred stock outstanding on that                date                into shares of Common Stock at the rate of three (3) shares of Common                Stock for each share of Series A Convertible Preferred                Stock. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                   |   | Number                of |      | Exercise |   | Expiration |   |
|----------------------------------------|--------|--------------------------|-----------|----------|--------|------------|--------|
| Warrants                               |   | Warrants                 |      | Price    |   | Date       |   |
| Goldman                Sachs & Co. |   |                     | 900,000   |     | $      | 0.50       |   |   | May                11, 2008 |   |
| RAB                                    |   |                     | 3,571,429 |     | $      | 0.28       |   |   | December                10, 2012 |   |

|                                            |   | Number  |      | Weighted                Average |   |
|-------------------------------------------------|--------|---------|-----------|---------------------------------|--------|
|                                            |   | of      |      | Exercise                        |   |
|                                            |   | Options |      | Price                           |   |
| Outstanding                at January 1, 2007   |   |    | -         |                            | $      | - |   |
| Granted                                         |   |    | 7,000,000 |                            | $      | 1.00 |   |
| Exercised                                       |   |    | -         |                            | $      | - |   |
| Cancelled                                       |   |    | -         |                            | $      | - |   |
|                                            |   |    |      |                            |   |   |   |
| Outstanding                at December 31, 2007 |   |    | 7,000,000 |                            | $      | 1.00 |   |
|                                            |   |    |      |                            |   |   |   |
| Options                exercisable:             |   |    |      |                            |   |   |   |
| December                31, 2007                |   |    | 7,000,000 |                            | $      | 1.00 |   |

|   |                              |   | Options                Outstanding |   |                            |   | Options                Exercisable |   |                            |   |
|--------|-----------------------------------|--------|------------------------------------|--------|---------------------------------|--------|------------------------------------|--------|---------------------------------|--------|
|   | Range                of           |   | Outstanding                at      |   | Weighted                Average |   | Exercisable                at      |   | Weighted                Average |   |
|   | Exercisable                Prices |   | December                31, 2007   |   | Exercise                Price   |   | December                31, 2007   |   | Exercise                Price   |   |
|   | $                                 | 1.00   |                               |   | 7,000,000                       |   | $                                  | 1.00   |                            |   | 7,000,000 |   | $ | 1.00 |   |

----

| 11. | BUSINESS                SEGMENT INFORMATION |
|-----|---------------------------------------------|

|                                   |   | 2007   |        | 2006   |   |
|----------------------------------------|--------|--------|-------------|--------|--------|
| Total                Revenues:         |   |   |        |   |   |
| United                States           |   | $      | 7,289,661   |   | $      | - |   |
| Canada                                 |   |   | -           |   |   | - |   |
|                                   |   | $      | 7,289,661   |   | $      | - |   |
| Loss                from Operations:   |   |   |        |   |   |   |   |
| United                States           |   | $      | (15,154,295 | )      | $      | (2,718,565 | ) |
| Canada                                 |   |   | 55,264      |   |   | (228,481 | ) |
|                                   |   | $      | (15,099,031 | )      | $      | (2,947,046 | ) |
| Long-Lived                Assets:      |   |   |        |   |   |   |   |
| United                States           |   | $      | 53,574,011  |   | $      | 1,028,483 |   |
| Canada                                 |   |   | 608,010     |   |   | 434,782 |   |
|                                   |   | $      | 54,182,021  |   | $      | 1,463,265 |   |
| Capital                Expenditures:   |   |   |        |   |   |   |   |
| United                States           |   | $      | 4,192,190   |   | $      | 27,974 |   |
| Canada                                 |   |   | 101,117     |   |   | 447,572 |   |
|                                   |   | $      | 4,293,307   |   | $      | 475,546 |   |
| Depreciation,                Depletion |   |   |        |   |   |   |   |
| and                Amortization:       |   |   |        |   |   |   |   |
| United                States           |   | $      | 3,137,090   |   | $      | 6,903 |   |
| Canada                                 |   |   | 40,896      |   |   | 17,183 |   |
|                                   |   | $      | 3,177,986   |   | $      | 24,086 |   |

----

| 12. | OIL                AND NATURAL GAS HEDGING ACTIVITIES |
|-----|-------------------------------------------------------|

----

|                                 |   |   |   |     |   |                        |   |                         |   | Estimated                        |   |
|--------------------------------------|--------|--------|--------|----------|--------|-----------------------------|--------|------------------------------|--------|----------------------------------|--------|
|                                 |   |   |   |     |   |                        |   |                         |   | Fair                Value        |   |
|                                 |   |   |   | Notional |   | Floor                Price  |   | Ceiling                Price |   | Asset                (Liability) |   |
|                                 |   | Type   |   | Amount   |   | ($                per unit) |   | ($                per unit)  |   | December                31, 2007 |   |
| NATURAL                GAS (MMBTU)   |   |   |   |     |   |                        |   |                         |   |                             |   |
| May                2007 - April 2011 |   |   | Collar |     |   | 933,340                     |   | $                            | 7.62   |                             | $      | 7.62 |   | $ | 61,012 |   |
|                                 |   |   |   |     |   |                        |   |                         |   |                             |   |   |   |   |   |   |
| CRUDE                OIL (BBLS)      |   |   |   |     |   |                        |   |                         |   |                             |   |   |   |   |   |   |
| May                2007 - April 2011 |   |   | Collar |     |   | 131,307                     |   | $                            | 65.00  |                             | $      | 65.00 |   |   | (2,218,416 | ) |
|                                 |   |   |   |     |   |                        |   |                         |   |                             |   |   |   | $ | (2,157,404 | ) |

| 13. | MAJOR                CUSTOMERS |
|-----|--------------------------------|

|                                  |   | Year                Ended   |      |   |   |
|---------------------------------------|--------|-----------------------------|-----------|--------|--------|
|                                  |   | December                31, |      |   |   |
| Customer                              |   | 2007                        |      |   |   |
| Plains                Marketing, L.P. |   |                        | 3,412,000 |   |   | (46.8 | %) |
| Erskine                Energy, LLC    |   |                        | 1,019,000 |   |   | (14.0 | %) |

| 14. | LEGAL                PROCEEDINGS |
|-----|----------------------------------|

|   | a) | On                or about August 15, 2006, a complaint was filed against the Company                by                Gerald M. Dunne in the Circuit Court of the 17th                Judicial Circuit in and for Broward County, Florida (Case No. 0612299).                In                the complaint, Mr. Dunne alleged that the Company breached a May                25, 2005                Acquisition Agreement pursuant to which the Company acquired certain                shares of Tekoil & Gas Corporation, a Florida corporation, owned by                Mr. Dunne in exchange for shares of our common stock. Mr. Dunne alleged                that the Company failed to issue shares of our common stock in an                amount                equal to seven percent (7%) of the Company’s outstanding shares of common                stock in breach of the Acquisition                Agreement. |
|--------|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | b) | On                March 14, 2007, Masters Resources, LLC and Masters Oil and Gas, LLC                (together, Masters) were named in a lawsuit filed in the 55th                Judicial District Court of Harris County, Texas for alleged under-delivery                of oil and gas that was transported through Masters’ pipeline pursuant to                oil and gas transportation agreements and several related claims.                Tekoil                and Gas Gulf Coast, LLC, a majority-owned subsidiary of the Company,                was                subsequently added to the lawsuit on August 9, 2007, based upon the                subsidiary’s acquisition of the subject pipelines as of October 1, 2006.                The plaintiff in the lawsuit seeks relief against the subsidiary                for                redelivery of the alleged undelivered oil and gas from and after                October                1, 2006 or, in the alternative, damages in excess of approximately                $1,395,000, plus court costs, attorneys’ fees and pre and post judgment                interest. |
|--------|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | c) | In                December 2007, J-W Power Company filed statements in Chambers County,                Texas and Galveston County, Texas asserting liens of approximately                $340,000 (plus costs and fees) against the mineral interests of Masters                Resources, LLC, Masters Oil & Gas LLC and Tekoil and Gas Gulf Coast                LLC in certain of the Red Fish Reef properties described in Note                2 of                Notes to Consolidated Financial Statements for amounts allegedly                due for                gas compression services allegedly provided from June 21, 2005 through                June 4, 2007. The Company only recently learned of these statements                and                intends to vigorously contest them. |
|--|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 15. | RELATED                PARTY TRANSACTIONS |
|-----|-------------------------------------------|

| 16. | COMMITMENTS                AND CONTINGENCIES |
|-----|----------------------------------------------|

----

| 17. | SUBSEQUENT                EVENTS |
|-----|----------------------------------|

|                                           |   | Year                Ended   |       |
|------------------------------------------------|--------|-----------------------------|------------|
|                                           |   | December                31, |       |
|                                           |   | 2007                        |       |
| Costs                incurred during the year: |   |                        |       |
| Property                acquisition costs      |   | $                           | -          |   |
| Unproved                                       |   |                        | 32,365,120 |   |
| Proved                                         |   |                        | -          |   |
| Exploration                                    |   |                        | 2,041,252  |   |
| Development                                    |   |                        | -          |   |
|                                           |   | $                           | 34,406,372 |   |

|                                 |   | December                31, |       |
|--------------------------------------|--------|-----------------------------|------------|
|                                 |   | 2007                        |       |
| Capitalized                costs     |   | $                           | 38,411,372 |   |
| Accumulated                depletion |   |                        | 2,692,427  |   |
| Net                capitalized costs |   | $                           | 35,718,945 |   |

|                                               |   | Year                Ended   |       |
|----------------------------------------------------|--------|-----------------------------|------------|
|                                               |   | December                31, |       |
|                                               |   | 2007                        |       |
| Operating                Revenues:                 |   |                        |       |
| Oil                                                |   | $                           | 4,195,108  |   |
| Natural                Gas                         |   |                        | 2,517,383  |   |
|                                               |   |                        | 6,712,491  |   |
| Less:                                              |   |                        |       |   |
| Oil                and natural gas operating costs |   |                        | 6,711,055  |   |
| Severance                and ad valorem taxes      |   |                        | 749,983    |   |
| Depletion                                          |   |                        | 2,692,427  |   |
|                                               |   |                        | 10,153,465 |   |
| Results                of operations from oil and  |   |                        |       |   |
| natural                gas producing activities    |   | $                           | (3,440,974 | ) |

----

|                                                    |   | Oil     |      | Natural                Gas |   |
|---------------------------------------------------------|--------|---------|-----------|----------------------------|--------|
|                                                    |   | (MBbls) |      | (MMcf)                     |   |
| Proved                reserves:                         |   |    |      |                       |   |
|                                                    |   |    |      |                       |   |
| January                1, 2007                          |   |    | -         |                       |   | - |   |
| Production                                              |   |    | (112      | )                          |   | (204 | ) |
| Extensions,                discoveries and acquisitions |   |    | 889  |                       |   | 1,526 |   |
| Revisions                of previous estimates          |   |    | -         |                       |   | - |   |
|                                                    |   |    |      |                       |   |   |   |
| December                31, 2007                        |   |    | 777  |                       |   | 1,322  |   |
|                                                    |   |    |      |                       |   |   |   |
|                                                         |   |    | Oil       |                       |   | Natural                Gas |   |
|                                                         |   |    | (MBbls)   |                       |   | (MMcf) |   |
| Proved                developed reserves:               |   |    |      |                       |   |   |   |
|                                                    |   |    |      |                       |   |   |   |
| December                31, 2007                        |   |    | 224  |                       |   | 1,022  |   |

----

|                                                           |   | December                31,   |    |
|----------------------------------------------------------------|--------|-------------------------------|---------|
|                                                           |   | 2007                          |    |
|                                                           |   | (In                thousands) |    |
| Future                cash inflows                             |   | $                             | 129,739 |   |
| Future                production and development costs         |   |                          | (82,698 | ) |
| Future                net cash flows - 10% annual discount for |   |                          |    |   |
| estimated                timing of cash flows                  |   |                          | (14,494 | ) |
| Standardized                measure of discounted future net   |   |                          |    |   |
| cash                flows                                      |   | $                             | 32,547  |   |

|                                                                      |   | December                31,   |   |
|---------------------------------------------------------------------------|--------|-------------------------------|--------|
|                                                                      |   | 2007                          |   |
|                                                                      |   | (In                thousands) |   |
| Beginning                of year                                          |   | $                             | -      |   |
| Net                change in sales and transfer prices and in production  |   |                          |   |   |
| (lifting)                costs related to the future production           |   |                          | -      |   |
| Net                change due to revisions in quantity estimates          |   |                          | -      |   |
| Changes                in estimated future development costs              |   |                          | -      |   |
| Accretion                of discount                                      |   |                          | -      |   |
| Changes                in production rate and other                       |   |                          | -      |   |
| Net                change due to extensions, discoveries and acquisitions |   |                          | 38,983 |   |
| Net                change due to purchases and sales of minerals in       |   |                          |   |   |
| place                                                                     |   |                          | -      |   |
| Sales                and transfers of oil and gas produced during the     |   |                          |   |   |
| period,                net of production costs                            |   |                          | (6,436 | ) |
| Previously                estimated development costs incurred during     |   |                          |   |   |
| the                period                                                 |   |                          | -      |   |
|                                                                      |   |                          |   |   |
| End                of year                                                |   | $                             | 32,547 |   |

----

**Item      8. Changes In and Disagreements With Accountants on Accounting and Financial      Disclosure.**

**Item      8A. Controls and Procedures.**

----

**Item      8B. Other Information.**

----

**PART      III**

**Item      9. Directors, Executive Officers, Promoters, Control Persons and Corporate      Governance; Compliance With Section 16(a) of the Exchange      Act.**

| **Name                 **   |   | **   Age** |   | **   Position**                                                                                  |   | **Director                Since** |
|----------------------------------|--------|---------------------------|--------|-----------------------------------------------------------------------------------------------------------------|--------|-----------------------------------|
|                             |   |                      |   |                                                                                                            |   |                              |
| Mark                S. Western   |   | 45                        |   | President                Chief                Executive Officer Chairman                of the Board (Director) |   | 2005                              |
|                             |   |                      |   |                                                                                                            |   |                              |
| Francis                G. Clear  |   | 53                        |   | Chief                Operating Officer Director                                                                 |   | 2005                              |
|                             |   |                      |   |                                                                                                            |   |                              |
| Gerald                Goodman    |   | 59                        |   | Chief                Financial Officer TreasurerDirector                                                        |   | 2005                              |
|                             |   |                      |   |                                                                                                            |   |                              |
| Richard                Creitzman |   | 36                        |   | Director                                                                                                        |   | 2005                              |
|                             |   |                      |   |                                                                                                            |   |                              |
| Donna                Parsons     |   | 40                        |   | President—Canadian                Operations                                                              |   | n/a                               |
|                             |   |                      |   |                                                                                                            |   |                              |
| Michael                Vosbein   |   | 61                        |   | Executive                Vice President Director                                                                |   | 2007                              |

**Mark      S. Western**

**Francis      G. Clear**

----

**Gerald      Goodman**

**Richard      Creitzman**

**Michael      Vosbein**

**Donna      Parsons**

----

----

**Item      10. Executive Compensation**

----

| **Name                  and****principal****position**                        |   | **Year**  |                            | **Salary****($)**  |   | **Bonus****($)**                    |               | **Stock****Awards****($)** |                       |  **Option** **Award                  (s)** **($)**  |   | **Non-Equity****Incentive Plan****Compensation****($)**  |                                    | **Nonqualified** **Deferred** **Compensation** **Earnings****($)**  |            | **All                  Other****Compensation****($)**  |   | **Total****($)**  |   |
|------------------------------------------------------------------------------------|--------|----------------|---------------------------------|-------------------------|--------|------------------------------------------|--------------------|----------------------------|----------------------------|-------------------------------------------------------------------------|--------|--------------------------------------------------------------------|-----------------------------------------|-----------------------------------------------------------------------------------------|-----------------|-------------------------------------------------------------|--------|------------------------|--------|
|                                                                               |   |           |                            |                    |   |                                     |               |                       |                       |                                                                    |   |                                                               |                                    |                                                                                    |            |                                                        |   |                   |   |
| Mark                  S. Western,CEO(principal                  executive officer) |   |           | 2007                  2006 2005 |                    |   | 275,000                  240,000 111,127 |     |                       |  0                  0 |                                                                    |   |  0                  1,000,000                                 |   (1)                         |                                                                                    |  1,280,000 |  (6)                                                   |   |                        |   |   |  |   |   |  |   |   | 1,555,000                  240,000 11,111,127 |   |
|                                                                               |   |           |                                 |                    |   |                                          |               |                       |                            |                                                                    |   |                                                                    |                                    |                                                                                    |                 |                                                        |   |                        |   |   |  |   |   |  |   |   |  |   |
| Gerald                  Goodman,CFO                                                |   |           | 2007                  2006 2005 |                    |   | 170,000                  54,0000         |               |                       | 0                          |                                                                    |   |  338,250                  400,000                             |  (3) (4)                  (2) |                                                                                    | 960,000         |  (6)                                                   |   |                        |   |   |  |   |   |  |   |   | 1,130,000                  392,250 400,000 |   |
|                                                                               |   |           |                                 |                    |   |                                          |               |                       |                            |                                                                    |   |                                                                    |                                    |                                                                                    |                 |                                                        |   |                        |   |   |  |   |   |  |   |   |  |   |
| Francis                  G.Clear,COO                                               |   |           | 2007                  2006 2005 |                    |   | 190,000                  120,000 64,250  |               |                       |  0                    |                                                                    |        |  0300,000                                                     |   (5)                         |                                                                                    |  960,000   |   (6)                                             |   |                        |   |   |  |   |   |  |   |   | 1,150,000                  120,000 364,250 |   |

| (1) | As                of December 31, 2005, Mr. Western had received restricted stock awards                totaling 5,000,000 shares of Common Stock, valued at $1,000,000 as                of                October 21, 2005, the date of grant (1,000,000 of such shares are                for                service as a director). Such valuation is also reflected in the “Stock                Based Compensation” section of Note 1 to the Company’s 2006 consolidated                financial statements. The shares are subject to the Company’s right to                repurchase them under certain circumstances, and the number of such                shares                to which the Company’s repurchase right applies is reduced by 1/36                th                for each full month of service as an employee or a director, as the                case                may be. The Company does not intend to pay dividends on these shares,                nor                on any shares of its Common Stock. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | As                of December 31, 2005, Mr. Goodman had received restricted stock awards                totaling 2,000,000 shares of Common Stock, valued at $400,000 as                of                October 21, 2005, the date of grant (1,000,000 of such shares are                for                service as a director). Such valuation is also reflected in the “Stock                Based Compensation” section of Note 1 to the Company’s 2006 consolidated                financial statements. The shares are subject to the Company’s right to                repurchase them under certain circumstances, and the number of such                shares                to which the Company’s repurchase right applies is reduced by 1/36                th                for each full month of service as an   employee or a director, as the                case may be. The Company does not intend to pay dividends on these                shares,                nor on any shares of its Common                Stock. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | On                November 8, 2006, the Company issued 1,000,000 shares of Common Stock,                valued at $330,000, to Gerald Goodman, the Company’s Chief Financial                Officer, in exchange for Mr. Goodman’s personal guarantee of the following                obligations of the Company: (i) credit card debts of the Company                and/or                its subsidiaries and related entities in the amount of Fifty Thousand                Dollars ($50,000), (ii) a mortgage and promissory note related to                property                owned by the Company and/or its subsidiaries and related entities                in                Newfoundland, Canada, in the amount of Two Hundred Sixty-Four Thousand                Dollars ($264,000), and (iii) a credit line of the Company and its                subsidiaries and related entities in the amount of Fifty Thousand                Dollars                ($50,000). |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4) | On                December 15, 2005, the Company issued an unsecured promissory note,                bearing interest at the rate of prime plus one percent (1%) per annum                (8.25% at December 31, 2005) to Wiener Goodman & Company, PC Profit                Sharing Plan FBO Gerald Goodman in the principal amount of $50,000,                with                principal and interest due at maturity on June 15, 2006. As further                consideration for the loan and pursuant to the terms of the promissory                note, the Company issued 25,000 shares of Common Stock, valued at                $8,250,                to Mr. Goodman on November 8, 2006. The maturity date was subsequently                extended until June 30, 2008. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (5) | As                of December 31, 2005, Mr. Clear had received restricted stock awards                totaling 1,500,000 shares of Common Stock, valued at $300,000 as                of                October 21, 2005, the date of grant (1,000,000 of such shares are                for                service as a director). Such valuation is also reflected in the “Stock                Based Compensation” section of Note 1 to the Company’s 2006 consolidated                financial statements. The shares are subject to the Company’s right to                repurchase them under certain circumstances, and the number of such                shares                to which the Company’s repurchase right applies is reduced by 1/36                th                for each full month of service as an employee or a director, as the                case                may be. The Company does not intend to pay dividends on these shares,                nor                on any shares of its Common Stock. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (6) | On                August 15, 2007, the Board of Directors granted non-qualified stock                options to Mark Western (2,000,000 options valued at $1,280,000),                Frank                Clear (1,500,000 options valued at $960,000) and Gerald Goodman (1,500,000                options valued at $960,000). |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                             |   | Options                Awards                                                                         |      | Stock                Awards                                                                             |   |
|----------------------------------|--------|-------------------------------------------------------------------------------------------------------|-----------|---------------------------------------------------------------------------------------------------------|--------|
| Name                             |   | Number of                Securities Underlying Unexercised Options(#)                Exercisable |      | Number of                Securities Underlying Unexercised Options(#)                Unexercisable |   | Equity                Incentive PlanAwards:                Number of Securities Underlying UnexercisedUnearned                Options(#) |   | Option                Exercise Price ($) |   | Option                Expiration Date |   | Number of                Shares or Units ofStock ThatHave NotVested(#) |   | MarketValue ofShares orUnits ofStock ThatHave NotVested($) |   | Equity                Incentive Plan Awards: Number of Unearned Shares,Units orOther                RightsThat HaveNot Vested(#) |   | Equity                Incentive Plan Awards: Market or PayoutValue ofUnearned                Shares, Units or Other Rights That Have Not                Vested($) |   |
|                             |   |                                                                                                  |      |                                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| (a)                              |   | (b)                                                                                                   |      | (c)                                                                                                     |   | (d) |   | (e) |   | (f) |   | (g) |   | (h) |   | (i) |   | (j) |   |
| Mark                Western      |   |                                                                                                  | 2,000,000 |                                                                                                    |   |   |   |   |   |   | $ | 1.00 |   |   | 8/2012 |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                             |   |                                                                                                  |      |                                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Richard                Creitzman |   |                                                                                                  | 2,000,000 |                                                                                                    |   |   |   |   |   |   | $ | 1.00 |   |   | 8/2012 |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                             |   |                                                                                                  |      |                                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Francis                Clear     |   |                                                                                                  | 1,500,000 |                                                                                                    |   |   |   |   |   |   | $ | 1.00 |   |   | 8/2012 |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                             |   |                                                                                                  |      |                                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Gerald                Goodman    |   |                                                                                                  | 1,500,000 |                                                                                                    |   |   |   |   |   |   | $ | 1.00 |   |   | 8/2012 |   |   |   |   |   |   |   |   |   |   |   |   |   |

Director      Compensation

----

**Item      11. Security Ownership of Certain Beneficial Owners and Management and Related      Stockholder Matters.**

| **Title of Class**                     |   | **Name and Address of****Beneficial Owner** |                                                                                                                                                                                 | **Amount and nature of****Beneficial****Ownership (1)** |   | **Percent of****Class**                 |   |
|--------------------------------------------------|--------|-----------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------|--------|----------------------------------------------|--------|
| Common                Stock, $0.000001 par value |   |                                                            | Mark                S. Western5209                Patricia DriveOrlando,                FL 32819                                                                                     |                                                                        |   | 10,310,571                 (2) (3) |   |   | 18.02% of Common Stock |   |
|                                             |   |                                                            |                                                                                                                                                                                      |                                                                        |   |                                              |   |   |  |   |
| Common                Stock, $0.000001 par value |   |                                                            | Francis                G. Clear5036                Dr. Phillips Blvd.,#292Orlando,                FL 32819                                                                           |                                                                        |   | 3,584,470                 (4)           |   |   | 6.32% of Common Stock |   |
|                                             |   |                                                            |                                                                                                                                                                                      |                                                                        |   |                                              |   |   |  |   |
| Common                Stock, $0.000001 par value |   |                                                            | Gerald                Goodman7                Briarwood RoadRumson,                NJ 07760                                                                                          |                                                                        |   | 4,643,170                 (4)           |   |   | 8.19% of Common Stock |   |
|                                             |   |                                                            |                                                                                                                                                                                      |                                                                        |   |                                              |   |   |  |   |
| Common                Stock, $0.000001 par value |   |                                                            | Richard                CreitzmanFlat                7, 22 Elm Park GardensLondon                SW10 9NYUnited                Kingdom                                                |                                                                        |   | 3,000,000                 (5)           |   |   | 5.24% of Common Stock |   |
|                                             |   |                                                            |                                                                                                                                                                                      |                                                                        |   |                                              |   |   |  |   |
| Common                Stock, $0.000001 par value |   |                                                            | RAB                Special Situations (Master) Fund Limitedc/o                RAB Capital Plc1                Adam StreetLondon                WC2N 6LEUnited                Kingdom |                                                                        |   | 7,142,858                 (6)           |   |   | 12.15% of Common Stock |   |
|                                             |   |                                                            |                                                                                                                                                                                      |                                                                        |   |                                              |   |   |  |   |
| Common                Stock, $0.000001 par value |   |                                                            | Rich                Holdings LLC9801                WestheimerSuite                1070Houston,                TX 77042                                                              |                                                                        |   | 4,000,000                 (7)           |   |   | 7.24% Common Stock |   |
|                                             |   |                                                            |                                                                                                                                                                                      |                                                                        |   |                                              |   |   |  |   |
| Common                Stock, $0.000001 par value |   |                                                            | John                W. Barton9801                WestheimerSuite                1070Houston,                TX 77042                                                                 |                                                                        |   | 4,000,000                 (7)           |   |   | 7.24% Common Stock |   |

|   | (1) | Unless                otherwise indicated, each person has sole voting power and sole investment                power with respect to all Common Stock set forth opposite such person’s                name, subject to applicable community property and similar                laws. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | Includes                2,000,000 shares issuable upon the exercise of Common Stock options                granted to Mr. Western. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------|

|   | (3) | Includes                2,347,369 shares recently issued to Mr. Western in connection with                the                conversion of a portion of his loan balance due from the Company                as                described under “ *Business—Recent                Developments*                .” |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (4) | Includes                1,500,000 shares issuable upon the exercise of Common Stock options                granted to Messrs. Clear and                Goodman. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (5) | Includes                2,000,000 shares issuable upon the exercise of Common Stock options                granted to Mr. Creitzman. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------|

|   | (6) | Includes                3,571,429 shares of Common Stock and 3,571,429 shares of Common Stock                issuable pursuant to a Warrant issued to RAB Special Situations (Master)                Fund Limited as described under “ *Business—Recent                Developments*                .”                The Warrant is subject to a limitation on exercise restricting RAB’s                beneficial ownership to 9.99% of the Company’s issued and outstanding                Common Stock, which restriction may be waived with 61 days                notice. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (7) | Represents                shares issued to purchase the Galveston Bay properties as described                under                “ *Business—Galveston                Bay Developments*                .” |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|  **Title of Class**               |   | **Name and Address of****Beneficial Owner** |                                                                                                                                  | **Amount and nature****of Beneficial****Ownership (1)** |   | **Percent of****Class**                 |   |
|--------------------------------------------------|--------|-----------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------|--------|----------------------------------------------|--------|
| Common                Stock, $0.000001 par value |   |                                                            | Mark                S. Western5209                Patricia DriveOrlando,                FL 32819                                      |                                                                        |   | 10,310,571                 (2) (3) |   |   | 18.02% of Common Stock |   |
|                                             |   |                                                            |                                                                                                                                       |                                                                        |   |                                              |   |   |  |   |
| Common                Stock, $0.000001 par value |   |                                                            | Francis                G. Clear5036                Dr. Phillips Blvd.,#292Orlando,                FL 32819                            |                                                                        |   | 3,584,470                 (4)           |   |   | 6.32% of Common Stock |   |
|                                             |   |                                                            |                                                                                                                                       |                                                                        |   |                                              |   |   |  |   |
| Common                Stock, $0.000001 par value |   |                                                            | Gerald                Goodman7                Briarwood RoadRumson,                NJ 07760                                           |                                                                        |   | 4,643,170                 (4)           |   |   | 8.19% of Common Stock |   |
|                                             |   |                                                            |                                                                                                                                       |                                                                        |   |                                              |   |   |  |   |
| Common                Stock, $0.000001 par value |   |                                                            | Richard                CreitzmanFlat                7, 22 Elm Park GardensLondon                SW10 9NYUnited                Kingdom |                                                                        |   | 3,000,000                 (5)           |   |   | 5.24% of Common Stock |   |
|                                             |   |                                                            |                                                                                                                                       |                                                                        |   |                                              |   |   |  |   |
| Common                Stock, $0.000001 par value |   |                                                            | Michael                Vosbein2715                Tannehill DriveHouston,                TX 77008                                     |                                                                        |   | 83,000                                       |   |   | 0.15% of Common Stock |   |
|                                             |   |                                                            |                                                                                                                                       |                                                                        |   |                                              |   |   |  |   |
| Common                Stock, $0.000001 par value |   |                                                            | Donna                Parsons25                Mountbatten DriveSt.                John’s, NL A1A 3Y1Canada                      |                                                                        |   | 210,000                                      |   |   | 0.38% of Common Stock |   |
|                                             |   |                                                            |                                                                                                                                       |                                                                        |   |                                              |   |   |  |   |
| Common                Stock, $0.000001 par value |   |                                                            | All                Directors and Executive Officers as a Group                                                                        |                                                                        |   | 21,831,211                                   |   |   | 35.08% of Common Stock |   |

|   | (1) | Unless                otherwise indicated, each person has sole voting power and sole investment                power with respect to all Common Stock set forth opposite such person’s                name, subject to applicable community property and similar                laws. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | Includes                2,000,000 shares issuable upon the exercise of Common Stock options                granted to Mr. Western, as further described                below. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (3) | Includes                2,347,369 shares recently issued to Mr. Western in connection with                the                conversion of a portion of his loan balance due from the Company                as                described under “ *Business—Recent                Developments*                .” |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (4) | Includes                1,500,000 shares issuable upon the exercise of Common Stock options                granted to Messrs. Clear and Goodman, as further described                below. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (5) | Includes                2,000,000 shares issuable upon the exercise of Common Stock options                granted to Mr. Creitzman, as further described                below. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

On      August      15, 2007, the Board of Directors of the Company, acting as the Administrator,      granted Nonqualified Stock Options (defined in the Tekoil & Gas Corporation      Omnibus Equity Plan) for the purchase of an aggregate of 7,000,000 shares of      Common Stock to certain officers and directors of the Company. Such options      provide to each optionee the right to purchase a specified number of shares      of      Common Stock for the exercise price of $1.00 per share, which the Board of      Directors determined to be equal to or greater than the Fair Market Value      (defined in the Plan) of the Common Stock on the grant date. Each optionee’s      option vested immediately and is immediately exercisable, and each option and      will expire on August 14, 2012. Each optionee is a party to a Stock Option      Agreement between such optionee and the Company, which sets forth the terms      of      the Nonqualified Stock Option granted to such optionee and incorporates by      reference the terms of the Plan (which prevail over the terms of the Stock      Option Agreement in the case of a conflict). The grant of each option was      approved unanimously by the Board of Directors, exempting such grants under      Rule      16b-3, promulgated under the Securities Exchange Act of 1934.

**Item      12. Certain Relationships and Related Transactions, and Director      Independence.**

----

| Name                            |   | Number of Shares |                  |
|---------------------------------|--------|----------------------------|-----------------------|
|                            |   |                       |                  |
| Francis                G. Clear |   |                       | 584,470 shares   |   |
| Gerald                Goodman   |   |                       | 118,170 shares   |   |
| Mark                S. Western  |   |                       | 5,294,404 shares |   |
| TOTAL                           |   |                       | 5,997,044 shares |   |

**Item      13. Exhibits.**

| **Exhibit****Number** |   | **Description**                                                                                                                                                                                                           |
|-----------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                  |   |                                                                                                                                                                                                                      |
| **3.1**               | -      | Certificate                  of Incorporation of the Company and all Amendments thereto *(filed                  as Exhibit 2.1 to the Company’s Form 10-SB, filed with the SEC on July 5,                  2006)** |

----

| **3.2**   | -      | Bylaws                  of the Company *(filed                  as Exhibit 2.2 to the Company’s Form 10-SB, filed with the SEC on July 5,                  2006)**                                                                                                                                                                 |
|-----------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|      |   |                                                                                                                                                                                                                                                                                                                                     |
| **4.1**   | -      | Article                  Fourth of the Certificate of Incorporation of the Company, as amended                  *(filed                  as part of Exhibit 2.1 to the Company’s Form 10-SB, filed with the SEC on                  July 5, 2006)**                                                                                |
|      |   |                                                                                                                                                                                                                                                                                                                                     |
| **4.2**   | -      | Articles                  II, III, VIII and XI of the Bylaws of the Company *(filed                  as part of Exhibit 2.2 to the Company’s Form 10-SB, filed with the SEC on                  July 5, 2006)**                                                                                                                    |
|      |   |                                                                                                                                                                                                                                                                                                                                     |
| **4.3**   | -      | Certificate                  of the Powers, Designations, Preferences and Rights of the Series                  A                  Convertible Preferred Stock *(filed                  as Exhibit 3.3 to the Company’s Form 10-SB, filed with the SEC on July 5,                  2006)**                                         |
|      |   |                                                                                                                                                                                                                                                                                                                                     |
| **4.4**   | -      | Amendment                  to Certificate of the Powers, Designations, Preferences and Rights                  of the                  Series A Convertible Preferred Stock *(filed                  as Exhibit 3.4 to the Company’s Form 10-SB, filed with the SEC on July 5,                  2006)**                            |
|      |   |                                                                                                                                                                                                                                                                                                                                     |
| **4.5**   | -      | Second                  Amendment to Certificate of the Powers, Designations, Preferences                  and                  Rights of the Series A Convertible Preferred Stock *(filed                  as Exhibit 3.5 to the Company’s Form 10-SB, filed with the SEC on July 5,                  2006)**                     |
|      |   |                                                                                                                                                                                                                                                                                                                                     |
| **10.1**  | -      | Acquisition                  Agreement dated May 25, 2005, among Pexcon, Inc., Tekoil-FL, the                  shareholders of Tekoil-FL and Gerald M. Dunne *(filed                  as Exhibit 99.6.1 to the Company’s Form 10-SB, filed with the SEC on July                  5, 2006)**                                        |
|      |   |                                                                                                                                                                                                                                                                                                                                     |
| **10.2**  | -      | Unsecured                  Promissory Note dated December 15, 2005, from the Company to Wiener                  Goodman & Company PC Profit Sharing Plan FBO Gerald Goodman                  *(filed                  as Exhibit 99.6.2 to the Company’s Form 10-SB, filed with the SEC on July                  5, 2006)**    |
|      |   |                                                                                                                                                                                                                                                                                                                                     |
| **10.3**  | -      | Employment                  Agreement dated as of October 21, 2005, between the Company and                  Mark S.                  Western *(filed                  as Exhibit 99.6.3 to the Company’s Form 10-SB, filed with the SEC on July                  5, 2006)**                                                       |
|      |   |                                                                                                                                                                                                                                                                                                                                     |
| **10.4**  | -      | Employment                  Agreement dated as of October 21, 2005, between the Company and                  Gerald                  Goodman *(filed                  as Exhibit 99.6.4 to the Company’s Form 10-SB, filed with the SEC on July                  5, 2006)**                                                        |
|      |   |                                                                                                                                                                                                                                                                                                                                     |
| **10.5**  | -      | Employment                  Agreement dated as of October 21, 2005, between the Company and                  Francis G.                  Clear *(filed                  as Exhibit 99.6.5 to the Company’s Form 10-SB, filed with the SEC on July                  5, 2006)**                                                      |
|      |   |                                                                                                                                                                                                                                                                                                                                     |
| **10.6**  | -      | Employment                  Agreement dated as of October 21, 2005, between the Company and                  Eric                  Ottens *(filed                  as Exhibit 99.6.6 to the Company’s Form 10-SB, filed with the SEC on July                  5, 2006)**                                                           |
|      |   |                                                                                                                                                                                                                                                                                                                                     |
| **10.7**  | -      | Director                  Service Agreement dated as of October 21, 2005, between the Company                  and                  Mark S. Western *(filed                  as Exhibit 99.6.7 to the Company’s Form 10-SB, filed with the SEC on July                  5, 2006)**                                                 |
|      |   |                                                                                                                                                                                                                                                                                                                                     |
| **10.8**  | -      | Director                  Service Agreement dated as of October 21, 2005, between the Company                  and                  Gerald Goodman *(filed                  as Exhibit 99.6.8 to the Company’s Form 10-SB, filed with the SEC on July                  5, 2006)**                                                  |
|      |   |                                                                                                                                                                                                                                                                                                                                     |
| **10.9**  | -      | Director                  Service Agreement dated as of October 21, 2005, between the Company                  and                  Francis G. Clear *(filed                  as Exhibit 99.6.9 to the Company’s Form 10-SB, filed with the SEC on July                  5, 2006)**                                                |
|      |   |                                                                                                                                                                                                                                                                                                                                     |
| **10.10** | -      | Director                  Service Agreement dated as of October 21, 2005, between the Company                  and                  Richard Creitzman *(filed                  as Exhibit 99.6.10 to the Company’s Form 10-SB, filed with the SEC on July                  5, 2006)**                                              |
|      |   |                                                                                                                                                                                                                                                                                                                                     |
| **10.11** | -      | Employment                  Agreement dated as of June 1, 2006, between Tekoil Rig Development                  Corporation and Donna Parsons *(filed                  as Exhibit 99.6.11 to the Company’s Form 10-SB/A (Amendment No. 2), filed                  with the SEC on November 13, 2006)**                             |
|      |   |                                                                                                                                                                                                                                                                                                                                     |
| **10.12** | -      | Stock                  Grant and Repurchase Agreement dated as of June 1, 2006, between                  the                  Company and Donna Parsons *(filed                  as Exhibit 99.6.12 to the Company’s Form 10-SB/A (Amendment No. 2), filed                  with the SEC on November 13, 2006)                  ** |

----

| **10.13** | -      | Form                  of Tender dated August 14, 2006, and Indenture dated August 31,                  2006, for                  the purchase of Newfoundland facility *(filed                  as Exhibit 99.6.13 to the Company’s Form 10-SB/A (Amendment No. 2), filed                  with the SEC on November 13, 2006) **                                                                                                        |
|-----------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| **10.14** | -      | Mortgage                  dated September 12, 2006, between the Company and CIBC Mortgage                  Inc.                  *(filed                  as Exhibit 99.6.14 to the Company's Form 10-SB/A (Amendment No.                  2) filed                  with the SEC on November 13, 2006) **                                                                                                                                     |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| **10.15** | -      | Settlement                  Agreement and Mutual Release dated December 6, 2006, between the                  Company                  and Gerald M. Dunne *(filed                  as Exhibit 10.15 to the Company's Form 8-K dated December 6, 2006,                  and                  filed with the SEC on December 11, 2006) **                                                                                                       |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| **10.16** | -      | Stock                  Issuance Agreement dated May 1, 2006, between the Company and Don                  Parsons                  *(filed                  as Exhibit 10.16 to the Company's Form 8-K dated December 6, 2006,                  and                  filed with the SEC on December 11, 2006) **                                                                                                                               |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| **10.17** | -      | Form                  of Securities Purchase Agreement for the purchase of the Company’s Series                  A Convertible Preferred Stock *(filed                  as Exhibit 10.17 to the Company's Form 8-K dated December 6, 2006,                  and                  filed with the SEC on December 11, 2006) **                                                                                                             |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| **10.18** | -      | Purchase                  and Sale Agreement dated November 13, 2006, between the Company                  and                  Masters Resources, LLC, and Masters Oil & Gas, LLC *(filed                  as Exhibit 10.18 to the Company's Form 8-K dated December 11, 2006,                  and                  filed with the SEC on December 14, 2006) **                                                                          |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| **10.19** | -      | Form                  of Subscription Agreement (with Put Option) dated November 20,                  2006,                  between the Company and the subscribers thereto *(filed                  as Exhibit 10.19 to the Company's Form 8-K dated December 11, 2006,                  and                  filed with the SEC on December 14, 2006) **                                                                                    |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| **10.20** | -      | First                  Amendment to Purchase and Sale Agreement executed on December 29,                  2006,                  between the Company and Masters Resources, LLC, and Masters Oil& Gas,                  LLC *(filed                  as Exhibit 10.20 to the Company's Form 8-K dated December 29, 2006,                  and                  filed with the SEC on January 8, 2007)**                                    |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| **10.21** | -      | Subscription                  Agreement dated December 29, 2006, between the Company and Masters                  Resources, LLC, and Masters Oil & Gas, LLC *(filed                  as Exhibit 10.21 to the Company's Form 8-K dated December 29, 2006,                  and                  filed with the SEC on January 8, 2007)**                                                                                                   |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| **10.22** | -      | Registration                  Rights Agreement dated December 29, 2006, between the Company and                  Masters                  Resources, LLC, and Masters Oil & Gas, LLC, Rich Holdings, LLC, and                  John W. Barton *(filed                  as Exhibit 10.22 to the Company's Form 8-K dated December 29, 2006,                  and                  filed with the SEC on January 8, 2007)**                  |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| **10.23** | -      | Farmout                  Agreement executed on January 3, 2007, and dated as of December                  19, 2006,                  between the Company and Ptarmigan Resources Limited *(filed                  as Exhibit 10.23 to the Company's Form 8-K dated December 29, 2006,                  and                  filed with the SEC on January 8, 2007)**                                                                           |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| **10.24** | -      | Second                  Amendment to Purchase and Sale Agreement dated effective February                  8, 2007,                  between the Company and Masters Resources, LLC, and Masters Oil& Gas,                  LLC *(filed                  as Exhibit 10.24 to the Company's Form 8-K dated February 8, 2007,                  and                  filed with the SEC on February 15, 2007)**                               |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| **10.25** | -      | Third                  Amendment to Purchase and Sale Agreement dated effective March                  1, 2007,                  between Tekoil and Gas Gulf Coast, LLC, and Masters Resources,                  LLC, and                  Masters Oil & Gas, LLC *(filed                  as Exhibit 10.1 to the Company's Form 8-K dated March 22, 2007,                  and filed                  with the SEC on March 26, 2007)**   |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| **10.26** | -      | Fourth                  Amendment to Purchase and Sale Agreement dated effective March                  22, 2007,                  between Tekoil and Gas Gulf Coast, LLC, and Masters Resources,                  LLC, and                  Masters Oil & Gas, LLC *(filed                  as Exhibit 10.2 to the Company's Form 8-K dated March 22, 2007,                  and filed                  with the SEC on March 26, 2007)** |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| **10.27** | -      | Fifth                  Amendment to Purchase and Sale Agreement dated effective April                  12, 2007,                  between Tekoil and Gas Gulf Coast, LLC, and Masters Resources,                  LLC, and                  Masters Oil & Gas, LLC *(filed                  as Exhibit 10.27 to the Company's Form 8-K dated April 12, 2007,                  and filed                  with the SEC on April 18, 2007)** |

----

| **10.28** | -      | Sixth                  Amendment to Purchase and Sale Agreement executed on April 30,                  2007, and                  dated effective April 24, 2007, between Tekoil and Gas Gulf Coast,                  LLC,                  and Masters Resources, LLC, and Masters Oil & Gas, LLC *(filed                  as Exhibit 10.28 to the Company's Form 8-K dated April 30, 2007,                  and filed                  with the SEC on May 3, 2007)**                                                                                                                                                         |
|-----------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| **10.29** | -      | Credit                  and Guaranty Agreement dated as of May 11, 2007, by and among Tekoil                  and Gas Gulf Coast, LLC, the Company, and the other Guarantors                  (defined                  therein), the Lenders (defined therein), and J. Aron & Company, as                  Syndication Agent and Administrative Agent for the Lenders *(filed                  as Exhibit 10.29 to the Company’s Form 8-K/A dated May 11, 2007, and filed                  with the SEC on May 23, 2007)*                  *                                                                        |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| **10.30** | -      | Note                  dated May 11, 2007, in the principal amount of $50 million, made                  by Tekoil                  and Gas Gulf Coast, LLC to J. Aron & Company *(filed                  as Exhibit 10.30 to the Company’s Form 8-K/A dated May 11, 2007, and filed                  with the SEC on May 23, 2007)*                  *                                                                                                                                                                                                                                                                    |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| **10.31** | -      | Pledge                  and Security Agreement dated as of May 11, 2007, by and among Tekoil                  and                  Gas Gulf Coast, LLC, each of the affiliates of the Company signatory                  thereto, whether as an original signatory thereto or as an Additional                  Grantor (defined therein), and J. Aron & Company, as administrative                  agent for the Beneficiaries (defined therein) *(filed                  as Exhibit 10.31 to the Company’s Form 8-K/A dated May 11, 2007, and filed                  with the SEC on May 23, 2007)*                  * |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| **10.32** | -      | Pledge                  Agreement dated as of May 11, 2007, by and between the Company                  and J. Aron                  & Company, as administrative agent for the Beneficiaries (defined                  therein) *(filed                  as Exhibit 10.32 to the Company’s Form 8-K/A dated May 11, 2007, and filed                  with the SEC on May 23, 2007)*                  *                                                                                                                                                                                                                   |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| **10.33** | -      | Deed                  of Trust, Mortgage, Assignment, Security Agreement, Fixture Filing                  and                  Financing Statement dated May 11, 2007, from Tekoil and Gas Gulf                  Coast,                  LLC to John Howie, as Trustee, and J. Aron & Company, as Agent                  *(filed                  as Exhibit 10.33 to the Company’s Form 8-K/A dated May 11, 2007, and filed                  with the SEC on May 23, 2007)*                  *                                                                                                                           |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| **10.34** | -      | Blocked                  Deposit Account Control Agreement dated as of May 11, 2007, among                  Tekoil                  and Gas Gulf Coast, LLC, J. Aron & Company and Amegy Bank National                  Association *(filed                  as Exhibit 10.34 to the Company’s Form 8-K/A dated May 11, 2007, and filed                  with the SEC on May 23, 2007)*                  *                                                                                                                                                                                                                |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| **10.35** | -      | Default                  Deposit Account Control Agreement dated as of May 11, 2007, among                  Tekoil                  and Gas Gulf Coast, LLC, J. Aron & Company and Amegy Bank National                  Association *(filed                  as Exhibit 10.35 to the Company’s Form 8-K/A dated May 11, 2007, and filed                  with the SEC on May 23, 2007)*                  *                                                                                                                                                                                                                |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| **10.36** | -      | Conveyance                  of Overriding Royalty Interest dated as of May 11, 2007, but effective                  as                  of October 1, 2006, at 12:00 a.m. local time at the location of                  the                  property described therein, made by Tekoil and Gas Gulf Coast,                  LLC and its                  Affiliates, to and in favor of MTGLQ Investors, L.P. *(filed                  as Exhibit 10.36 to the Company’s Form 8-K/A dated May 11, 2007, and filed                  with the SEC on May 23, 2007)*                  *                                        |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| **10.37** | -      | Warrant                  to purchase 900,000 shares of the Company’s Common Stock, dated May 11,                  2007, issued to Goldman, Sachs & Co. by the Company *(filed                  as Exhibit 10.37 to the Company’s Form 8-K/A dated May 11, 2007, and filed                  with the SEC on May 23, 2007)*                  *                                                                                                                                                                                                                                                                        |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| **10.38** | -      | Amended                  and Restated Operating Agreement of Tekoil and Gas Gulf Coast,                  LLC                  (formerly known as Masters Acquisition Co., LLC), dated May 11,                  2007                  *(filed                  as Exhibit 10.38 to the Company’s Form 8-K/A dated May 11, 2007, and filed                  with the SEC on May 23, 2007)*                  *                                                                                                                                                                                                                   |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| **10.39** | -      | Registration                  Rights Agreement dated as of May 11, 2007, by and between the Company                  and                  Goldman, Sachs & Co. *(filed                  as Exhibit 10.39 to the Company’s Form 8-K/A dated May 11, 2007, and filed                  with the SEC on May 23, 2007)*                  *                                                                                                                                                                                                                                                                                     |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| **10.40** | -      | Assignment                  and Bill of Sale executed May 11, 2007, and effective October 1,                  2006, at                  12:00 midnight Central Standard Time, from Masters Resources, LLC                  and                  Masters Oil & Gas, LLC to Tekoil and Gas Gulf Coast, LLC *(filed                  as Exhibit 10.40 to the Company’s Form 8-K/A dated May 11, 2007, and filed                  with the SEC on May 23, 2007)*                  *                                                                                                                                           |

----

| **10.41** | -      | Assignment                  of Overriding Royalty executed May 11, 2007, and effective as of                  October                  1, 2006, at 7:00 a.m. Central Daylight Savings Time, from Masters                  Resources, LLC and Masters Oil & Gas, LLC to Masters Pipeline, LLC                  *(filed                  as Exhibit 10.41 to the Company’s Form 8-K/A dated May 11, 2007, and filed                  with the SEC on May 23, 2007)*                  *                                                                                                                                                            |
|-----------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| **10.42** | -      | Indemnity                  Agreement dated as of May 11, 2007, among Masters Resources, LLC,                  Masters                  Oil & Gas, LLC and Masters Pipeline, LLC and Tekoil and Gas Gulf                  Coast, LLC *(filed                  as Exhibit 10.42 to the Company’s Form 8-K/A dated May 11, 2007, and filed                  with the SEC on May 23, 2007)*                  *                                                                                                                                                                                                                                      |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| **10.43** | -      | Management                  Services Agreement dated as of May 11, 2007, by and between the                  Company                  and Tekoil and Gas Gulf Coast, LLC *(filed                  as Exhibit 10.43 to the Company’s Form 8-K/A dated May 11, 2007, and filed                  with the SEC on May 23, 2007)*                  *                                                                                                                                                                                                                                                                                                     |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| **10.44** | -      | ISDA                  Master Agreement dated as of May 11, 2007, between J. Aron & Company                  and Tekoil and Gas Gulf Coast, LLC *(filed                  as Exhibit 10.44 to the Company’s Form 8-K/A dated May 11, 2007, and filed                  with the SEC on May 23, 2007)*                  *                                                                                                                                                                                                                                                                                                                           |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| **10.45** | -      | Schedule                  to the ISDA Master Agreement dated as of May 11, 2007, between                  J. Aron                  & Company and Tekoil and Gas Gulf Coast, LLC *(filed                  as Exhibit 10.45 to the Company’s Form 8-K/A dated May 11, 2007, and filed                  with the SEC on May 23, 2007)*                  *                                                                                                                                                                                                                                                                                          |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| **10.46** | -      | Transfer                  Acknowledgement and Agreement dated May 11, 2007, among the Company                  and                  Masters Resources, LLC, Masters Oil & Gas, LLC, Rich Holdings LLC and                  John W. Barton *(filed                  as Exhibit 10.46 to the Company’s Form 8-K/A dated May 11, 2007, and filed                  with the SEC on May 23, 2007)*                  *                                                                                                                                                                                                                                |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| **10.47** | -      | Transaction                  Confirmation, dated May 11, 2007, from J. Aron & Company to Tekoil and                  Gas Gulf Coast, LLC, effective May 1,2007 — Contract Reference 897282314 1                  1 *(filed                  as Exhibit 10.47 to the Company’s Form 8-K/A dated May 11, 2007, and filed                  with the SEC on May 23, 2007)*                  *                                                                                                                                                                                                                                                 |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| **10.48** | -      | Transaction                  Confirmation, dated May 11, 2007, from J. Aron & Company to Tekoil and                  Gas Gulf Coast, LLC, effective June 1, 2007 — Contract Reference 897282306                  1 1 *(filed                  as Exhibit 10.48 to the Company’s Form 8-K/A dated May 11, 2007, and filed                  with the SEC on May 23, 2007)*                  *                                                                                                                                                                                                                                               |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| **10.49** | -      | Amendment                  No. 1 and Waiver dated as of July 3, 2007, by and among Tekoil                  and Gas                  Gulf Coast, LLC, the Company, and the other Guarantors (defined                  therein),                  the Lenders (defined therein), and J. Aron & Company, as Lead Arranger                  and as Syndication Agent, and J Aron & Company, as Administrative                  Agent for the Lenders *(filed                  as Exhibit 10.49 to the Company’s Form 8-K dated July 3, 2007, and filed                  with the SEC on July 10, 2007)*                  *                      |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| **10.50** | -      | Letter                  Agreement dated July 3, 2007, by and among Amegy Bank National                  Association, Tekoil and Gas Gulf Coast, LLC, and J. Aron & Company                  *(filed                  as Exhibit 10.50 to the Company’s Form 8-K dated July 3, 2007, and filed                  with the SEC on July 10, 2007)**                                                                                                                                                                                                                                                                                                 |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| **10.51** | -      | Amendment                  No. 2 and Waiver dated as of August 15, 2007, by and among Tekoil                  and Gas                  Gulf Coast, LLC, the Company, the Lenders, J. Aron & Company, as Lead                  Arranger and as Syndication Agent, and J. Aron & Company, as                  Administrative Agent for the Lenders and as counterparty under                  the ISDA                  Master Agreement dated as of May 11, 2007. *(filed                  as Exhibit 10.51 to the Company’s Form 8-K dated August 15, 2007, and                  filed with the SEC on August 21, 2007)*                  * |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| **10.52** | -      | Tekoil                  & Gas Corporation Omnibus Equity Plan, adopted by the Company’s Board                  of Directors on August 15, 2007. *(filed                  as Exhibit 10.52 to the Company’s Form 8-K dated August 15, 2007, and                  filed with the SEC on August 21, 2007)**                                                                                                                                                                                                                                                                                                                                  |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| **10.53** | -      | Stock                  Option Agreement dated August 15, 2007, by and between the Company                  and                  Mark S. Western. *(filed                  as Exhibit 10.53 to the Company’s Form 8-K dated August 15, 2007, and                  filed with the SEC on August 21, 2007)**                                                                                                                                                                                                                                                                                                                                           |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| **10.54** | -      | Stock                  Option Agreement dated August 15, 2007, by and between the Company                  and                  Richard Creitzman. *(filed                  as Exhibit 10.54 to the Company’s Form 8-K dated August 15, 2007, and                  filed with the SEC on August 21, 2007)**                                                                                                                                                                                                                                                                                                                                         |

----

| **10.55** | -      | Stock                  Option Agreement dated August 15, 2007, by and between the Company                  and                  Francis G. Clear. *(filed                  as Exhibit 10.55 to the Company’s Form 8-K dated August 15, 2007, and                  filed with the SEC on August 21, 2007)*                  *                                                                                                                                                                                                                                                                                                                           |
|-----------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| **10.56** | -      | Stock                  Option Agreement dated August 15, 2007, by and between the Company                  and                  Gerald Goodman. *(filed                  as Exhibit 10.56 to the Company’s Form 8-K dated August 15, 2007, and                  filed with the SEC on August 21, 2007)*                  *                                                                                                                                                                                                                                                                                                                             |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| **10.57** | -      | Amendment                  No. 3 and Waiver, dated as of October 24, 2007, by and among Tekoil                  and                  Gas Gulf Coast, LLC, the Company, the Lenders, J. Aron & Company, as                  Lead Arranger and as Syndication Agent, and J Aron & Company, as                  Administrative Agent for the Lenders and as counterparty under                  the ISDA                  Master Agreement dated as of May 11, 2007. *(filed                  as Exhibit 10.57 to the Company’s Form 8-K dated October 24, 2007, and                  filed with the SEC on October 29, 2007)*                  * |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| **10.58** | -      | Limited                  Guaranty, dated as of October 24, 2007, by Mark S. Western in favor                  of J.                  Aron & Company, as Administrative Agent. *(filed**as                  Exhibit 10.58 to the Company’s Form 8-K dated October 24, 2007, and filed                  with the SEC on October 29, 2007)*                  *                                                                                                                                                                                                                                                                                        |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| **10.59** | -      | Loan                  Agreement, dated October                  24, 2007, by and between the Company and Tri Star Capital Ventures                  Limited                  (the “Lender”). *(filed                  as Exhibit 10.59 to the Company’s Form 8-K dated October 24, 2007, and                  filed with the SEC on October 29, 2007)*                  *                                                                                                                                                                                                                                                                  |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| **10.60** | -      | Deed                  of Guarantee, dated October 24, 2007, by and between                  Mark S. Western, as Guarantor, and the Lender.                  *(filed                  as Exhibit 10.60 to the Company’s Form 8-K dated October 24, 2007, and                  filed with the SEC on October 29, 2007)*                  *                                                                                                                                                                                                                                                                                                     |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| **10.61** | -      | Deed                  of Guarantee, dated October 24, 2007, by and between Gerald Goodman,                  as Guarantor, and the Lender.                  *(filed                  as Exhibit 10.61 to the Company’s Form 8-K dated October 24, 2007, and                  filed with the SEC on October 29, 2007)*                  *                                                                                                                                                                                                                                                                                                           |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| **10.62** | -      | Deed                  of Guarantee, dated October 24, 2007, by and between                  Francis G. Clear, as Guarantor, and the Lender.                  *(filed                  as Exhibit 10.62 to the Company’s Form 8-K dated October 24, 2007, and                  filed with the SEC on October 29, 2007)*                  *                                                                                                                                                                                                                                                                                                    |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| **10.63** | -      | Deed                  of Guarantee, dated October 24, 2007, by and between                  Richard Creitzman, as Guarantor, and the Lender.                  *(filed                  as Exhibit 10.63 to the Company’s Form 8-K dated October 24, 2007, and                  filed with the SEC on October 29, 2007)*                  *                                                                                                                                                                                                                                                                                                        |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| **10.64** | -      | Consulting                  Agreement, dated October 24, 2007, by and between the Company and                  Portland                  Worldwide Investments Limited.  *(filed                  as Exhibit 10.63 to the Company’s Form 8-K dated October 24, 2007, and                  filed with the SEC on October 29, 2007)*                  *                                                                                                                                                                                                                                                                                             |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| **10.65** | -      | Purchase                  Agreement, dated December 10, 2007, between the Company and RAB                  Special                  Situations (Master) Fund Limited.   *(filed                  as Exhibit 10.65 to the Company’s Form 8-K dated December 13, 2007, and                  filed with the SEC on December 14, 2007) **                                                                                                                                                                                                                                                                                                             |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| **10.66** | -      | Warrant                  to Purchase Common Stock of the Company issued to RAB Special Situations                  (Master) Fund Limited by the Company on December 10, 2007.                    *(filed                  as Exhibit 10.66 to the Company’s Form 8-K dated December 13, 2007, and                  filed with the SEC on December 14, 2007) **                                                                                                                                                                                                                                                                                    |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| **10.67** | -      | Registration                  Rights Agreement, dated as of December 10, 2007, by and between                  the                  Company and RAB Special Situations (Master) Fund Limited.                    *(filed                  as Exhibit 10.67 to the Company’s Form 8-K dated December 13, 2007, and                  filed with the SEC on December 14, 2007) **                                                                                                                                                                                                                                                                    |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| **10.68** | -      | Employment                  Agreement, dated effective May 1, 2007, between the Company and                  Michael                  Vosbein.  (filed as Exhibit 10.68 to the Company’s Form 8-K dated                  December 13, 2007, and filed with the SEC on December 14, 2007)                  *                                                                                                                                                                                                                                                                                                                                       |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| **10.69** | -      | Amendment                  No. 1 to Warrant to Purchase Common Stock of the Company issued                  to RAB                  Special Situations (Master) Fund Limited, dated January 23, 2008.                  *(filed                  as Exhibit 10.69 to the Company’s Amendment No. 1 to Form SB-2, filed with                  the SEC on February 11, 2008, File No.                  333-148560)*                                                                                                                                                                                                                                       |

----

| **10.70** | -      | Amendment                  No. 4 and Waiver, dated as of January 18, 2007, by and among Tekoil                  and                  Gas Gulf Coast, LLC, the Company, the Lenders, J. Aron & Company, as                  Lead Arranger and as Syndication Agent, and J. Aron & Company, as                  Administrative Agent for the Lenders and as counterparty under                  the ISDA                  Master Agreement dated as of May 11, 2007. *(filed                  as Exhibit 10.70 to the Company’s Form 8-K dated January 18, 2008, and                  filed with the SEC on January 25, 2008) ** |
|-----------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| **10.71** | -      | Reaffirmation                  of Guaranty, dated January 18, 2008, by Mark S. Western in favor                  of J.                  Aron & Company, as Administrative Agent. *(filed                  as Exhibit 10.71 to the Company’s Form 8-K dated January 18, 2008, and                  filed with the SEC on January 25, 2008) **                                                                                                                                                                                                                                                                                            |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| **10.72** | -      | Subscription                  Agreement, dated March 18, 2008, between the Company and Longfellow                  Energy                  LP. *(filed                  as Exhibit 10.72 to the Company’s Form 8-K dated March 18, 2008, and filed                  with the SEC on March 24, 2008)*                  *                                                                                                                                                                                                                                                                                                                     |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| **10.73** | -      | Convertible                  Promissory Note of the Company, issued to Longfellow Energy LP                  by the                  Company on March 8, 2008. *(filed                  as Exhibit 10.72 to the Company’s Form 8-K dated March 18, 2008, and filed                  with the SEC on March 24, 2008)*                  *                                                                                                                                                                                                                                                                                                     |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| **10.74** |   | Accounting                  Assistance Engagement Letter, dated February 4, 2008, between the                  Company                  and Corporate Accounting Group. *(filed                  herewith)*                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| **10.75** |   | Master                  Service Agreement, dated February 4, 2008, between the Company                  and                  Corporate Accounting Group, a Division of Temporary Professionals,                  Inc.                  *(filed                  herewith)*                                                                                                                                                                                                                                                                                                                                                                        |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| **10.76** |   | Engagement                  Letter Agreement, dated February 15, 2008, between the Company                  and Nomad                  Energy, Inc. *(filed                  herewith)*                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| **10.77** |   | Lender                  Party Notice Letter, dated March 31, 2008, from J. Aron & Company as                  Administrative Agent for the Lenders concerning certain matters                  related to                  the Credit and Guaranty Agreement, dated as of May 11, 2007. *(filed                  herewith)*                                                                                                                                                                                                                                                                                                              |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| **11**    | -      | Statement                  regarding the computation of earnings per share is omitted because                  such                  computation can be clearly determined from the material contained                  in this                  report on Form 10-KSB.                                                                                                                                                                                                                                                                                                                                                                           |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| **21**    | -      | Subsidiaries                  of the Small Business Issuer *(filed                  as Exhibit 21 to the Company's Amendment No. 3 to Form SB-2, filed                  with                  the SEC on December 21, 2007, File No. 333-144881)*                                                                                                                                                                                                                                                                                                                                                                                                 |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| **31.1**  | -      | Certifications                  of Chief Executive Officer pursuant to Rule 13a-14(a) *(filed                  herewith)*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| **31.2**  | -      | Certifications                  of Chief Financial Officer pursuant to Rule 13a-14(a) *(filed                  herewith)*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| **32.1**  | -      | Certifications                  of Chief Executive Officer pursuant to Section 1350 *(furnished                  herewith)*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| **32.2**  | -      | Certifications                  of Chief Executive Officer pursuant to Section 1350 *(furnished                  herewith)*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |

----

|  | * | Incorporated                herein by reference. SEC File No.                0-52100 |
|--|---|--------------------------------------------------------------------------------------|

----

**Item      14. Principal Accounting Fees and Services.**

*Audit      Fees.*

*Audit      Related Fees*

*Tax      Fees.*

*All      Other Fees. *

*Other      Matters.*

----

**SIGNATURES**

| **TEKOIL                & GAS CORPORATION** |                                                 |
|-------------------------------------------------|------------------------------------------------------|
|                                            |                                                 |   |
| By:                                             | /s/                Mark S. Western                   |   |
|                                            | Mark                S. Western                       |   |
|                                            | President                and Chief Executive Officer |   |
|                                            |                                                 |   |
| Date:                April 15, 2008             |                                                 |

| **Signature** |                                 | **Title** |                                    | **Date** |
|---------------|--------------------------------------|-----------|-----------------------------------------|----------|
|          |                                 |      |                                    |     |   |
|          |                                 |      | President                               |     |   |
| By:           | /s/                Mark S. Western   |      | Chief                Executive Officer  |     | April                15, 2008 |
|          | Mark                S. Western       |      | Chairman                of the Board    |     |   |
|          |                                 |      |                                    |     |   |
|          |                                 |      | Vice                President           |     |   |
| By:           | /s/                Francis G. Clear  |      | Chief                Operating Officer  |     | April                15, 2008 |
|          | Francis                G. Clear      |      | Director                                |     |   |
|          |                                 |      |                                    |     |   |
|          |                                 |      | Treasurer                               |     |   |
| By:           | /s/                Gerald Goodman    |      | Chief                Financial Officer  |     | April                15, 2008 |
|          | Gerald                Goodman        |      | Director                                |     |   |
|          |                                 |      |                                    |     |   |
| By:           | /s/                Richard Creitzman |      | Director                                |     | April                15, 2008 |
|          | Richard                Creitzman     |      |                                    |     |   |
|          |                                 |      |                                    |     |   |
| By:           | /s/                Michael Vosbein   |      | Executive                Vice President |     | April                15, 2008 |
|          | Michael                Vosbein       |      | Director                                |     |   |

----

**EXHIBIT      INDEX**

| **Exhibit****Number** |   | **Description**                                                                                                                                                                                                                                                                                                                       |
|-----------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                  |   |                                                                                                                                                                                                                                                                                                                                  |
| **3.1**               | -      | Certificate                  of Incorporation of the Company and all Amendments thereto *(filed                  as Exhibit 2.1 to the Company’s Form 10-SB, filed with the SEC on July 5,                  2006)**                                                                                                             |
|                  |   |                                                                                                                                                                                                                                                                                                                                  |
| **3.2**               | -      | Bylaws                  of the Company *(filed                  as Exhibit 2.2 to the Company’s Form 10-SB, filed with the SEC on July 5,                  2006)**                                                                                                                                                              |
|                  |   |                                                                                                                                                                                                                                                                                                                                  |
| **4.1**               | -      | Article                  Fourth of the Certificate of Incorporation of the Company, as amended                  *(filed                  as part of Exhibit 2.1 to the Company’s Form 10-SB, filed with the SEC on                  July 5, 2006)**                                                                             |
|                  |   |                                                                                                                                                                                                                                                                                                                                  |
| **4.2**               | -      | Articles                  II, III, VIII and XI of the Bylaws of the Company *(filed                  as part of Exhibit 2.2 to the Company’s Form 10-SB, filed with the SEC on                  July 5, 2006)**                                                                                                                 |
|                  |   |                                                                                                                                                                                                                                                                                                                                  |
| **4.3**               | -      | Certificate                  of the Powers, Designations, Preferences and Rights of the Series                  A                  Convertible Preferred Stock *(filed                  as Exhibit 3.3 to the Company’s Form 10-SB, filed with the SEC on July 5,                  2006)**                                      |
|                  |   |                                                                                                                                                                                                                                                                                                                                  |
| **4.4**               | -      | Amendment                  to Certificate of the Powers, Designations, Preferences and Rights                  of the                  Series A Convertible Preferred Stock *(filed                  as Exhibit 3.4 to the Company’s Form 10-SB, filed with the SEC on July 5,                  2006)**                         |
|                  |   |                                                                                                                                                                                                                                                                                                                                  |
| **4.5**               | -      | Second                  Amendment to Certificate of the Powers, Designations, Preferences                  and                  Rights of the Series A Convertible Preferred Stock *(filed                  as Exhibit 3.5 to the Company’s Form 10-SB, filed with the SEC on July 5,                  2006)**                  |
|                  |   |                                                                                                                                                                                                                                                                                                                                  |
| **10.1**              | -      | Acquisition                  Agreement dated May 25, 2005, among Pexcon, Inc., Tekoil-FL, the                  shareholders of Tekoil-FL and Gerald M. Dunne *(filed                  as Exhibit 99.6.1 to the Company’s Form 10-SB, filed with the SEC on July                  5, 2006)**                                     |
|                  |   |                                                                                                                                                                                                                                                                                                                                  |
| **10.2**              | -      | Unsecured                  Promissory Note dated December 15, 2005, from the Company to Wiener                  Goodman & Company PC Profit Sharing Plan FBO Gerald Goodman                  *(filed                  as Exhibit 99.6.2 to the Company’s Form 10-SB, filed with the SEC on July                  5, 2006)** |
|                  |   |                                                                                                                                                                                                                                                                                                                                  |
| **10.3**              | -      | Employment                  Agreement dated as of October 21, 2005, between the Company and                  Mark S.                  Western *(filed                  as Exhibit 99.6.3 to the Company’s Form 10-SB, filed with the SEC on July                  5, 2006)**                                                    |
|                  |   |                                                                                                                                                                                                                                                                                                                                  |
| **10.4**              | -      | Employment                  Agreement dated as of October 21, 2005, between the Company and                  Gerald                  Goodman *(filed                  as Exhibit 99.6.4 to the Company’s Form 10-SB, filed with the SEC on July                  5, 2006)**                                                     |
|                  |   |                                                                                                                                                                                                                                                                                                                                  |
| **10.5**              | -      | Employment                  Agreement dated as of October 21, 2005, between the Company and                  Francis G.                  Clear *(filed                  as Exhibit 99.6.5 to the Company’s Form 10-SB, filed with the SEC on July                  5, 2006)**                                                   |
|                  |   |                                                                                                                                                                                                                                                                                                                                  |
| **10.6**              | -      | Employment                  Agreement dated as of October 21, 2005, between the Company and                  Eric                  Ottens *(filed                  as Exhibit 99.6.6 to the Company’s Form 10-SB, filed with the SEC on July                  5, 2006)**                                                        |
|                  |   |                                                                                                                                                                                                                                                                                                                                  |
| **10.7**              | -      | Director                  Service Agreement dated as of October 21, 2005, between the Company                  and                  Mark S. Western *(filed                  as Exhibit 99.6.7 to the Company’s Form 10-SB, filed with the SEC on July                  5, 2006)**                                              |
|                  |   |                                                                                                                                                                                                                                                                                                                                  |
| **10.8**              | -      | Director                  Service Agreement dated as of October 21, 2005, between the Company                  and                  Gerald Goodman *(filed                  as Exhibit 99.6.8 to the Company’s Form 10-SB, filed with the SEC on July                  5, 2006)**                                               |
|                  |   |                                                                                                                                                                                                                                                                                                                                  |
| **10.9**              | -      | Director                  Service Agreement dated as of October 21, 2005, between the Company                  and                  Francis G. Clear *(filed                  as Exhibit 99.6.9 to the Company’s Form 10-SB, filed with the SEC on July                  5, 2006)**                                             |
|                  |   |                                                                                                                                                                                                                                                                                                                                  |
| **10.10**             | -      | Director                  Service Agreement dated as of October 21, 2005, between the Company                  and                  Richard Creitzman *(filed                  as Exhibit 99.6.10 to the Company’s Form 10-SB, filed with the SEC on July                  5, 2006)**                                           |

----

| **10.11** | -      | Employment                  Agreement dated as of June 1, 2006, between Tekoil Rig Development                  Corporation and Donna Parsons *(filed                  as Exhibit 99.6.11 to the Company’s Form 10-SB/A (Amendment No. 2), filed                  with the SEC on November 13, 2006)**                                                                                                                                 |
|-----------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| **10.12** | -      | Stock                  Grant and Repurchase Agreement dated as of June 1, 2006, between                  the                  Company and Donna Parsons *(filed                  as Exhibit 99.6.12 to the Company’s Form 10-SB/A (Amendment No. 2), filed                  with the SEC on November 13, 2006) **                                                                                                                      |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| **10.13** | -      | Form                  of Tender dated August 14, 2006, and Indenture dated August 31,                  2006, for                  the purchase of Newfoundland facility *(filed                  as Exhibit 99.6.13 to the Company’s Form 10-SB/A (Amendment No. 2), filed                  with the SEC on November 13, 2006) **                                                                                                      |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| **10.14** | -      | Mortgage                  dated September 12, 2006, between the Company and CIBC Mortgage                  Inc.                  *(filed                  as Exhibit 99.6.14 to the Company's Form 10-SB/A (Amendment No.                  2) filed                  with the SEC on November 13, 2006) **                                                                                                                                   |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| **10.15** | -      | Settlement                  Agreement and Mutual Release dated December 6, 2006, between the                  Company                  and Gerald M. Dunne *(filed                  as Exhibit 10.15 to the Company's Form 8-K dated December 6, 2006,                  and                  filed with the SEC on December 11, 2006) **                                                                                                     |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| **10.16** | -      | Stock                  Issuance Agreement dated May 1, 2006, between the Company and Don                  Parsons                  *(filed                  as Exhibit 10.16 to the Company's Form 8-K dated December 6, 2006,                  and                  filed with the SEC on December 11, 2006) **                                                                                                                             |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| **10.17** | -      | Form                  of Securities Purchase Agreement for the purchase of the Company’s Series                  A Convertible Preferred Stock *(filed                  as Exhibit 10.17 to the Company's Form 8-K dated December 6, 2006,                  and                  filed with the SEC on December 11, 2006) **                                                                                                           |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| **10.18** | -      | Purchase                  and Sale Agreement dated November 13, 2006, between the Company                  and                  Masters Resources, LLC, and Masters Oil & Gas, LLC *(filed                  as Exhibit 10.18 to the Company's Form 8-K dated December 11, 2006,                  and                  filed with the SEC on December 14, 2006) **                                                                        |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| **10.19** | -      | Form                  of Subscription Agreement (with Put Option) dated November 20,                  2006,                  between the Company and the subscribers thereto *(filed                  as Exhibit 10.19 to the Company's Form 8-K dated December 11, 2006,                  and                  filed with the SEC on December 14, 2006) **                                                                                  |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| **10.20** | -      | First                  Amendment to Purchase and Sale Agreement executed on December 29,                  2006,                  between the Company and Masters Resources, LLC, and Masters Oil& Gas,                  LLC *(filed                  as Exhibit 10.20 to the Company's Form 8-K dated December 29, 2006,                  and                  filed with the SEC on January 8, 2007)**                                  |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| **10.21** | -      | Subscription                  Agreement dated December 29, 2006, between the Company and Masters                  Resources, LLC, and Masters Oil & Gas, LLC *(filed                  as Exhibit 10.21 to the Company's Form 8-K dated December 29, 2006,                  and                  filed with the SEC on January 8, 2007)**                                                                                                 |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| **10.22** | -      | Registration                  Rights Agreement dated December 29, 2006, between the Company and                  Masters                  Resources, LLC, and Masters Oil & Gas, LLC, Rich Holdings, LLC, and                  John W. Barton *(filed                  as Exhibit 10.22 to the Company's Form 8-K dated December 29, 2006,                  and                  filed with the SEC on January 8, 2007)**                |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| **10.23** | -      | Farmout                  Agreement executed on January 3, 2007, and dated as of December                  19, 2006,                  between the Company and Ptarmigan Resources Limited *(filed                  as Exhibit 10.23 to the Company's Form 8-K dated December 29, 2006,                  and                  filed with the SEC on January 8, 2007)**                                                                         |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| **10.24** | -      | Second                  Amendment to Purchase and Sale Agreement dated effective February                  8, 2007,                  between the Company and Masters Resources, LLC, and Masters Oil& Gas,                  LLC *(filed                  as Exhibit 10.24 to the Company's Form 8-K dated February 8, 2007,                  and                  filed with the SEC on February 15, 2007)**                             |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| **10.25** | -      | Third                  Amendment to Purchase and Sale Agreement dated effective March                  1, 2007,                  between Tekoil and Gas Gulf Coast, LLC, and Masters Resources,                  LLC, and                  Masters Oil & Gas, LLC *(filed                  as Exhibit 10.1 to the Company's Form 8-K dated March 22, 2007,                  and filed                  with the SEC on March 26, 2007)** |

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| **10.26** | -      | Fourth                  Amendment to Purchase and Sale Agreement dated effective March                  22, 2007,                  between Tekoil and Gas Gulf Coast, LLC, and Masters Resources,                  LLC, and                  Masters Oil & Gas, LLC *(filed                  as Exhibit 10.2 to the Company's Form 8-K dated March 22, 2007,                  and filed                  with the SEC on March 26, 2007)**                                                                                                                                                                                      |
|-----------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| **10.27** | -      | Fifth                  Amendment to Purchase and Sale Agreement dated effective April                  12, 2007,                  between Tekoil and Gas Gulf Coast, LLC, and Masters Resources,                  LLC, and                  Masters Oil & Gas, LLC *(filed                  as Exhibit 10.27 to the Company's Form 8-K dated April 12, 2007,                  and filed                  with the SEC on April 18, 2007)**                                                                                                                                                                                      |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| **10.28** | -      | Sixth                  Amendment to Purchase and Sale Agreement executed on April 30,                  2007, and                  dated effective April 24, 2007, between Tekoil and Gas Gulf Coast,                  LLC,                  and Masters Resources, LLC, and Masters Oil & Gas, LLC *(filed                  as Exhibit 10.28 to the Company's Form 8-K dated April 30, 2007,                  and filed                  with the SEC on May 3, 2007)**                                                                                                                                                         |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| **10.29** | -      | Credit                  and Guaranty Agreement dated as of May 11, 2007, by and among Tekoil                  and Gas Gulf Coast, LLC, the Company, and the other Guarantors                  (defined                  therein), the Lenders (defined therein), and J. Aron & Company, as                  Syndication Agent and Administrative Agent for the Lenders *(filed                  as Exhibit 10.29 to the Company’s Form 8-K/A dated May 11, 2007, and filed                  with the SEC on May 23, 2007)*                  *                                                                        |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| **10.30** | -      | Note                  dated May 11, 2007, in the principal amount of $50 million, made                  by Tekoil                  and Gas Gulf Coast, LLC to J. Aron & Company *(filed                  as Exhibit 10.30 to the Company’s Form 8-K/A dated May 11, 2007, and filed                  with the SEC on May 23, 2007)*                  *                                                                                                                                                                                                                                                                    |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| **10.31** | -      | Pledge                  and Security Agreement dated as of May 11, 2007, by and among Tekoil                  and                  Gas Gulf Coast, LLC, each of the affiliates of the Company signatory                  thereto, whether as an original signatory thereto or as an Additional                  Grantor (defined therein), and J. Aron & Company, as administrative                  agent for the Beneficiaries (defined therein) *(filed                  as Exhibit 10.31 to the Company’s Form 8-K/A dated May 11, 2007, and filed                  with the SEC on May 23, 2007)*                  * |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| **10.32** | -      | Pledge                  Agreement dated as of May 11, 2007, by and between the Company                  and J. Aron                  & Company, as administrative agent for the Beneficiaries (defined                  therein) *(filed                  as Exhibit 10.32 to the Company’s Form 8-K/A dated May 11, 2007, and filed                  with the SEC on May 23, 2007)*                  *                                                                                                                                                                                                                   |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| **10.33** | -      | Deed                  of Trust, Mortgage, Assignment, Security Agreement, Fixture Filing                  and                  Financing Statement dated May 11, 2007, from Tekoil and Gas Gulf                  Coast,                  LLC to John Howie, as Trustee, and J. Aron & Company, as Agent                  *(filed                  as Exhibit 10.33 to the Company’s Form 8-K/A dated May 11, 2007, and filed                  with the SEC on May 23, 2007)*                  *                                                                                                                           |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| **10.34** | -      | Blocked                  Deposit Account Control Agreement dated as of May 11, 2007, among                  Tekoil                  and Gas Gulf Coast, LLC, J. Aron & Company and Amegy Bank National                  Association *(filed                  as Exhibit 10.34 to the Company’s Form 8-K/A dated May 11, 2007, and filed                  with the SEC on May 23, 2007)*                  *                                                                                                                                                                                                                |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| **10.35** | -      | Default                  Deposit Account Control Agreement dated as of May 11, 2007, among                  Tekoil                  and Gas Gulf Coast, LLC, J. Aron & Company and Amegy Bank National                  Association *(filed                  as Exhibit 10.35 to the Company’s Form 8-K/A dated May 11, 2007, and filed                  with the SEC on May 23, 2007)*                  *                                                                                                                                                                                                                |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| **10.36** | -      | Conveyance                  of Overriding Royalty Interest dated as of May 11, 2007, but effective                  as                  of October 1, 2006, at 12:00 a.m. local time at the location of                  the                  property described therein, made by Tekoil and Gas Gulf Coast,                  LLC and its                  Affiliates, to and in favor of MTGLQ Investors, L.P. *(filed                  as Exhibit 10.36 to the Company’s Form 8-K/A dated May 11, 2007, and filed                  with the SEC on May 23, 2007)*                  *                                        |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| **10.37** | -      | Warrant                  to purchase 900,000 shares of the Company’s Common Stock, dated May 11,                  2007, issued to Goldman, Sachs & Co. by the Company *(filed                  as Exhibit 10.37 to the Company’s Form 8-K/A dated May 11, 2007, and filed                  with the SEC on May 23, 2007)*                  *                                                                                                                                                                                                                                                                        |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| **10.38** | -      | Amended                  and Restated Operating Agreement of Tekoil and Gas Gulf Coast,                  LLC                  (formerly known as Masters Acquisition Co., LLC), dated May 11,                  2007                  *(filed                  as Exhibit 10.38 to the Company’s Form 8-K/A dated May 11, 2007, and filed                  with the SEC on May 23, 2007)*                  *                                                                                                                                                                                                                   |

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| **10.39** | -      | Registration                  Rights Agreement dated as of May 11, 2007, by and between the Company                  and                  Goldman, Sachs & Co. *(filed                  as Exhibit 10.39 to the Company’s Form 8-K/A dated May 11, 2007, and filed                  with the SEC on May 23, 2007)*                  *                                                                                                                                                                                                                                                                                                           |
|-----------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| **10.40** | -      | Assignment                  and Bill of Sale executed May 11, 2007, and effective October 1,                  2006, at                  12:00 midnight Central Standard Time, from Masters Resources, LLC                  and                  Masters Oil & Gas, LLC to Tekoil and Gas Gulf Coast, LLC *(filed                  as Exhibit 10.40 to the Company’s Form 8-K/A dated May 11, 2007, and filed                  with the SEC on May 23, 2007)*                  *                                                                                                                                                                 |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| **10.41** | -      | Assignment                  of Overriding Royalty executed May 11, 2007, and effective as of                  October                  1, 2006, at 7:00 a.m. Central Daylight Savings Time, from Masters                  Resources, LLC and Masters Oil & Gas, LLC to Masters Pipeline, LLC                  *(filed                  as Exhibit 10.41 to the Company’s Form 8-K/A dated May 11, 2007, and filed                  with the SEC on May 23, 2007)*                  *                                                                                                                                                            |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| **10.42** | -      | Indemnity                  Agreement dated as of May 11, 2007, among Masters Resources, LLC,                  Masters                  Oil & Gas, LLC and Masters Pipeline, LLC and Tekoil and Gas Gulf                  Coast, LLC *(filed                  as Exhibit 10.42 to the Company’s Form 8-K/A dated May 11, 2007, and filed                  with the SEC on May 23, 2007)*                  *                                                                                                                                                                                                                                      |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| **10.43** | -      | Management                  Services Agreement dated as of May 11, 2007, by and between the                  Company                  and Tekoil and Gas Gulf Coast, LLC *(filed                  as Exhibit 10.43 to the Company’s Form 8-K/A dated May 11, 2007, and filed                  with the SEC on May 23, 2007)*                  *                                                                                                                                                                                                                                                                                                     |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| **10.44** | -      | ISDA                  Master Agreement dated as of May 11, 2007, between J. Aron & Company                  and Tekoil and Gas Gulf Coast, LLC *(filed                  as Exhibit 10.44 to the Company’s Form 8-K/A dated May 11, 2007, and filed                  with the SEC on May 23, 2007)*                  *                                                                                                                                                                                                                                                                                                                           |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| **10.45** | -      | Schedule                  to the ISDA Master Agreement dated as of May 11, 2007, between                  J. Aron                  & Company and Tekoil and Gas Gulf Coast, LLC *(filed                  as Exhibit 10.45 to the Company’s Form 8-K/A dated May 11, 2007, and filed                  with the SEC on May 23, 2007)*                  *                                                                                                                                                                                                                                                                                          |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| **10.46** | -      | Transfer                  Acknowledgement and Agreement dated May 11, 2007, among the Company                  and                  Masters Resources, LLC, Masters Oil & Gas, LLC, Rich Holdings LLC and                  John W. Barton *(filed                  as Exhibit 10.46 to the Company’s Form 8-K/A dated May 11, 2007, and filed                  with the SEC on May 23, 2007)*                  *                                                                                                                                                                                                                                |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| **10.47** | -      | Transaction                  Confirmation, dated May 11, 2007, from J. Aron & Company to Tekoil and                  Gas Gulf Coast, LLC, effective May 1,2007 — Contract Reference 897282314 1                  1 *(filed                  as Exhibit 10.47 to the Company’s Form 8-K/A dated May 11, 2007, and filed                  with the SEC on May 23, 2007)*                  *                                                                                                                                                                                                                                                 |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| **10.48** | -      | Transaction                  Confirmation, dated May 11, 2007, from J. Aron & Company to Tekoil and                  Gas Gulf Coast, LLC, effective June 1, 2007 — Contract Reference 897282306                  1 1 *(filed                  as Exhibit 10.48 to the Company’s Form 8-K/A dated May 11, 2007, and filed                  with the SEC on May 23, 2007)*                  *                                                                                                                                                                                                                                               |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| **10.49** | -      | Amendment                  No. 1 and Waiver dated as of July 3, 2007, by and among Tekoil                  and Gas                  Gulf Coast, LLC, the Company, and the other Guarantors (defined                  therein),                  the Lenders (defined therein), and J. Aron & Company, as Lead Arranger                  and as Syndication Agent, and J Aron & Company, as Administrative                  Agent for the Lenders *(filed                  as Exhibit 10.49 to the Company’s Form 8-K dated July 3, 2007, and filed                  with the SEC on July 10, 2007)*                  *                      |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| **10.50** | -      | Letter                       Agreement dated July 3, 2007, by and among Amegy Bank National                  Association, Tekoil and Gas Gulf Coast, LLC, and J. Aron & Company                  *(filed                  as Exhibit 10.50 to the Company’s Form 8-K dated July 3, 2007, and filed                  with the SEC on July 10, 2007)**                                                                                                                                                                                                                                                                                            |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| **10.51** | -      | Amendment                  No. 2 and Waiver dated as of August 15, 2007, by and among Tekoil                  and Gas                  Gulf Coast, LLC, the Company, the Lenders, J. Aron & Company, as Lead                  Arranger and as Syndication Agent, and J. Aron & Company, as                  Administrative Agent for the Lenders and as counterparty under                  the ISDA                  Master Agreement dated as of May 11, 2007. *(filed                  as Exhibit 10.51 to the Company’s Form 8-K dated August 15, 2007, and                  filed with the SEC on August 21, 2007)*                  * |

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| **10.52** | -      | Tekoil                  & Gas Corporation Omnibus Equity Plan, adopted by the Company’s Board                  of Directors on August 15, 2007. *(filed                  as Exhibit 10.52 to the Company’s Form 8-K dated August 15, 2007, and                  filed with the SEC on August 21, 2007)**                                                                                                                                                                                                                                                                                                                                     |
|-----------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| **10.53** | -      | Stock                  Option Agreement dated August 15, 2007, by and between the Company                  and                  Mark S. Western. *(filed                  as Exhibit 10.53 to the Company’s Form 8-K dated August 15, 2007, and                  filed with the SEC on August 21, 2007)**                                                                                                                                                                                                                                                                                                                                              |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| **10.54** | -      | Stock                  Option Agreement dated August 15, 2007, by and between the Company                  and                  Richard Creitzman. *(filed                  as Exhibit 10.54 to the Company’s Form 8-K dated August 15, 2007, and                  filed with the SEC on August 21, 2007)**                                                                                                                                                                                                                                                                                                                                            |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| **10.55** | -      | Stock                  Option Agreement dated August 15, 2007, by and between the Company                  and                  Francis G. Clear. *(filed                  as Exhibit 10.55 to the Company’s Form 8-K dated August 15, 2007, and                  filed with the SEC on August 21, 2007)*                  *                                                                                                                                                                                                                                                                                                                           |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| **10.56** | -      | Stock                  Option Agreement dated August 15, 2007, by and between the Company                  and                  Gerald Goodman. *(filed                  as Exhibit 10.56 to the Company’s Form 8-K dated August 15, 2007, and                  filed with the SEC on August 21, 2007)*                  *                                                                                                                                                                                                                                                                                                                             |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| **10.57** | -      | Amendment                  No. 3 and Waiver, dated as of October 24, 2007, by and among Tekoil                  and                  Gas Gulf Coast, LLC, the Company, the Lenders, J. Aron & Company, as                  Lead Arranger and as Syndication Agent, and J Aron & Company, as                  Administrative Agent for the Lenders and as counterparty under                  the ISDA                  Master Agreement dated as of May 11, 2007. *(filed                  as Exhibit 10.57 to the Company’s Form 8-K dated October 24, 2007, and                  filed with the SEC on October 29, 2007)*                  * |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| **10.58** | -      | Limited                  Guaranty, dated as of October 24, 2007, by Mark S. Western in favor                  of J.                  Aron & Company, as Administrative Agent. *(filed**as                  Exhibit 10.58 to the Company’s Form 8-K dated October 24, 2007, and filed                  with the SEC on October 29, 2007)*                  *                                                                                                                                                                                                                                                                                        |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| **10.59** | -      | Loan                  Agreement, dated October                  24, 2007, by and between the Company and Tri Star Capital Ventures                  Limited                  (the “Lender”). *(filed                  as Exhibit 10.59 to the Company’s Form 8-K dated October 24, 2007, and                  filed with the SEC on October 29, 2007)*                  *                                                                                                                                                                                                                                                                  |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| **10.60** | -      | Deed                  of Guarantee, dated October 24, 2007, by and between                  Mark S. Western, as Guarantor, and the Lender.                  *(filed                  as Exhibit 10.60 to the Company’s Form 8-K dated October 24, 2007, and                  filed with the SEC on October 29, 2007)*                  *                                                                                                                                                                                                                                                                                                     |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| **10.61** | -      | Deed                  of Guarantee, dated October 24, 2007, by and between Gerald Goodman,                  as Guarantor, and the Lender.                  *(filed                  as Exhibit 10.61 to the Company’s Form 8-K dated October 24, 2007, and                  filed with the SEC on October 29, 2007)*                  *                                                                                                                                                                                                                                                                                                           |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| **10.62** | -      | Deed                  of Guarantee, dated October 24, 2007, by and between                  Francis G. Clear, as Guarantor, and the Lender.                  *(filed                  as Exhibit 10.62 to the Company’s Form 8-K dated October 24, 2007, and                  filed with the SEC on October 29, 2007)*                  *                                                                                                                                                                                                                                                                                                    |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| **10.63** | -      | Deed                  of Guarantee, dated October 24, 2007, by and between                  Richard Creitzman, as Guarantor, and the Lender.                  *(filed                  as Exhibit 10.63 to the Company’s Form 8-K dated October 24, 2007, and                  filed with the SEC on October 29, 2007)*                  *                                                                                                                                                                                                                                                                                                        |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| **10.64** | -      | Consulting                  Agreement, dated October 24, 2007, by and between the Company and                  Portland                  Worldwide Investments Limited.  *(filed                  as Exhibit 10.63 to the Company’s Form 8-K dated October 24, 2007, and                  filed with the SEC on October 29, 2007)*                  *                                                                                                                                                                                                                                                                                             |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| **10.65** | -      | Purchase                  Agreement, dated December 10, 2007, between the Company and RAB                  Special                  Situations (Master) Fund Limited.   *(filed                  as Exhibit 10.65 to the Company’s Form 8-K dated December 13, 2007, and                  filed with the SEC on December 14, 2007) **                                                                                                                                                                                                                                                                                                             |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| **10.66** | -      | Warrant                  to Purchase Common Stock of the Company issued to RAB Special Situations                  (Master) Fund Limited by the Company on December 10, 2007.                    *(filed                  as Exhibit 10.66 to the Company’s Form 8-K dated December 13, 2007, and                  filed with the SEC on December 14, 2007) **                                                                                                                                                                                                                                                                                    |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| **10.67** | -      | Registration                  Rights Agreement, dated as of December 10, 2007, by and between                  the                  Company and RAB Special Situations (Master) Fund Limited.                    *(filed                  as Exhibit 10.67 to the Company’s Form 8-K dated December 13, 2007, and                  filed with the SEC on December 14, 2007)                  **                                                                                                                                                                                                                                                   |

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| **10.68** | -      | Employment                  Agreement, dated effective May 1, 2007, between the Company and                  Michael                  Vosbein.  (filed as Exhibit 10.68 to the Company’s Form 8-K dated                  December 13, 2007, and filed with the SEC on December 14, 2007)                  *                                                                                                                                                                                                                                                                                                                            |
|-----------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| **10.69** | -      | Amendment                  No. 1 to Warrant to Purchase Common Stock of the Company issued                  to RAB                  Special Situations (Master) Fund Limited, dated January 23, 2008.                  *(filed                  as Exhibit 10.69 to the Company’s Amendment No. 1 to Form SB-2, filed with                  the SEC on February 11, 2008, File No. 333-148560)*                                                                                                                                                                                                                                             |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| **10.70** | -      | Amendment                  No. 4 and Waiver, dated as of January 18, 2007, by and among Tekoil                  and                  Gas Gulf Coast, LLC, the Company, the Lenders, J. Aron & Company, as                  Lead Arranger and as Syndication Agent, and J. Aron & Company, as                  Administrative Agent for the Lenders and as counterparty under                  the ISDA                  Master Agreement dated as of May 11, 2007. *(filed                  as Exhibit 10.70 to the Company’s Form 8-K dated January 18, 2008, and                  filed with the SEC on January 25, 2008) ** |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| **10.71** | -      | Reaffirmation                  of Guaranty, dated January 18, 2008, by Mark S. Western in favor                  of J.                  Aron & Company, as Administrative Agent. *(filed                  as Exhibit 10.71 to the Company’s Form 8-K dated January 18, 2008, and                  filed with the SEC on January 25, 2008) **                                                                                                                                                                                                                                                                                            |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| **10.72** | -      | Subscription                  Agreement, dated March 18, 2008, between the Company and Longfellow                  Energy                  LP. *(filed                  as Exhibit 10.72 to the Company’s Form 8-K dated March 18, 2008, and filed                  with the SEC on March 24, 2008)*                  *                                                                                                                                                                                                                                                                                                                     |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| **10.73** | -      | Convertible                  Promissory Note of the Company, issued to Longfellow Energy LP                  by the                  Company on March 8, 2008. *(filed                  as Exhibit 10.72 to the Company’s Form 8-K dated March 18, 2008, and filed                  with the SEC on March 24, 2008)*                  *                                                                                                                                                                                                                                                                                                     |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| **10.74** |   | Accounting                  Assistance Engagement Letter, dated February 4, 2008, between the                  Company                  and Corporate Accounting Group. *(filed                  herewith)*                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| **10.75** |   | Master                  Service Agreement, dated February 4, 2008, between the Company                  and                  Corporate Accounting Group, a Division of Temporary Professionals,                  Inc.                  *(filed                  herewith)*                                                                                                                                                                                                                                                                                                                                                                        |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| **10.76** |   | Engagement                  Letter Agreement, dated February 15, 2008, between the Company                  and Nomad                  Energy, Inc. *(filed                  herewith)*                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| **10.77** |   | Lender                  Party Notice Letter, dated March 31, 2008, from J. Aron & Company as                  Administrative Agent for the Lenders concerning certain matters                  related to                  the Credit and Guaranty Agreement, dated as of May 11, 2007. *(filed                  herewith)*                                                                                                                                                                                                                                                                                                              |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| **11**    | -      | Statement                  regarding the computation of earnings per share is omitted because                  such                  computation can be clearly determined from the material contained                  in this                  report on Form 10-KSB.                                                                                                                                                                                                                                                                                                                                                                           |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| **21**    | -      | Subsidiaries                  of the Small Business Issuer *(filed                  as Exhibit 21 to the Company's Amendment No. 3 to Form SB-2, filed                  with                  the SEC on December 21, 2007, File No. 333-144881)*                                                                                                                                                                                                                                                                                                                                                                                                 |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| **31.1**  | -      | Certifications                  of Chief Executive Officer pursuant to Rule 13a-14(a) *(filed                  herewith)*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| **31.2**  | -      | Certifications                  of Chief Financial Officer pursuant to Rule 13a-14(a) *(filed                  herewith)*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| **32.1**  | -      | Certifications                  of Chief Executive Officer pursuant to Section 1350 *(furnished                  herewith)*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|      |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| **32.2**  | -      | Certifications                  of Chief Executive Officer pursuant to Section 1350 *(furnished                  herewith)*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |

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|  | * | Incorporated                herein by reference. SEC File No.                0-52100 |
|--|---|--------------------------------------------------------------------------------------|

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