FIRST
      AMENDMENT TO PURCHASE AND SALE AGREEMENT

    TRINITY
      BAY,
      REDFISH
      REEF,
      FISHERS
      REEF,
      NORTH
      POINT
      BOLIVAR
      FIELDS

    IN
      GALVESTON AND
      CHAMBERS
      COUNTIES,
      TEXAS

    
      
        

      

    

    


    
      THIS
        FIRST AMENDMENT TO PURCHASE AND SALE AGREEMENT
        (the
“First Amendment”) is dated effective as of November 13, 2006, and is made by
        and between Masters
        Resources, LLC,
        and
Masters
        Oil & Gas, LLC,
        both
        Texas limited liability companies having their respective principal places
        of
        business at 9801 Westheimer, Suite 1070, Houston, Texas 77042 (collectively,
        “Masters”), and Tekoil
        & Gas Corporation,
        a
        Delaware corporation having its principal place of business at 5036 Dr. Phillips
        Blvd., Suite 232, Orlando, Florida 32819 (“Buyer”) (Masters and Buyer are
        sometimes called collectively the “parties” and individually
“party”).

    

    


    RECITALS

    


    On
      November __, 2006, the parties executed and delivered Purchase and Sale
      Agreement (the “Original Agreement”) covering the Assets. The parties now desire
      to amend the Original Agreement in certain respects. Accordingly, the parties
      agree as set out in this First Amendment. (Unless otherwise noted, defined
      terms
      used in this First Amendment shall have the meanings set out in the Original
      Agreement.)

    


    I. AMENDMENTS

    


    A.          
       Section
      2.1 of the Original Agreement is deleted in its entirety and the following
      is
      inserted in lieu thereof:

    


    2.1         
       Purchase
      Price

    


    The
      Purchase Price for the Assets will be Forty-Seven Million Five Hundred Thousand
      and No\100 Dollars ($47,500,000.00), plus
      500,000
      shares of common stock of Buyer, plus
      the
      reservation at Closing by Masters of the overriding royalty interests described
      herein.

    


    (A)       
       The
      monetary portion of the Purchase Price will be paid by Buyer as
      follows:

    


    
      	 	
              1.

            	
              Buyer
                has delivered Buyer’s check into an interest bearing account (the “Escrow
                Account”) at Amegy Bank National Association in the names of Masters and
                Buyer the sum of $1 million, as an earnest money deposit which is
                non-refundable, except as expressly set forth in this Agreement (the
                “Deposit”), which shall be distributed at the Closing or upon termination
                of this Agreement, as further set forth herein (all accrued interest
                shall
                be paid to the recipient of the Deposit, and to the extent that the
                Deposit is applied to the Purchase Price, the accrued interest shall
                be
                deemed to reduce the balance of the Purchase Price due at
                Closing);

            


    


    
      
        
        

      

      
        
        

        
          

        

      

       

    

    


    
      	 	
              2.

            	
              At
                the Closing, Buyer will pay to Masters by wire transfer of the monetary
                balance of the Purchase Price, as the same may be adjusted under
                Sections
                2.1 (A), 2.2 and 2.3 of this Agreement, subject to any post-closing
                adjustments.

            


    

    


    Any
      provisions to the contrary contained in this Agreement to the contrary
      notwithstanding, all adjustments to the Purchase Price in accordance with this
      Agreement shall be made to the monetary portions of the Purchase
      Price.

    


    
      	 	
              (B)

            	
              At
                Closing, Buyer will deliver to Masters 500,000 shares of the common
                stock
                of Buyer, which shares shall be restricted securities (and legended
                as
                such) and covered by a separate, customary Subscription Agreement
                confirming that Masters is an “Accredited Investor” as that term is
                defined in Regulation D promulgated under the Securities Act of 1933
                (the
                “Securities Act”) and confirming, among other customary items, that prior
                to execution of this Amendment, Masters has reviewed all of the filings
                made by Buyer under the Securities Exchange Act of 1934 and is accepting
                such common stock with no intention to sell or otherwise transfer
                the same
                except pursuant to a separate Registration Rights Agreement;
                and

            


    

    


    
      	 	
              (C)

            	
              At
                Closing Masters shall reserve overriding royalty interests (collectively
                the “ORRI”) as follows:

            


    

    


    
      	 	
              (1)

            	
              an
                aggregate overriding royalty equal to 6% of 100% of the production
                from
                those of the Wells shown as (x) “proved undeveloped reserves” and (y)
                “proved non-producing reserves” in the reserve estimate (the “Reserve
                Report”), dated August 31, 2006, prepared by R. A. Lenser and Associates,
                Inc., addressed to Masters Resources, LLC, and (z) an overriding
                royalty
                equal to 6% of 100% of the production from any present or future
                well
                completed in and producing from any zone or formation not presently
                producing or capable of producing and not documented in the Reserve
                Report
                (collectively, the “Declining ORRI”);
                and

            


    

    


    
      	 	
              (2)

            	
              an
                aggregate overriding royalty equal to 3% of 100% of the production
                from
                those Wells shown as “proved developed producing” in the Reserve Report
                (the “Fixed ORRI”).

            


    

    


    The
      ORRI
      shall be proportionately reduced to the extent that the working interest of
      Masters in any lease burdened thereby to
      be
      conveyed to Buyer is
      less
      than 100% or the net revenue interest to which Masters is entitled on any lease
      to be conveyed to Buyer is less than 80%. As examples:

    


    
      	 	
              (a)

            	
              If
                the working interest of Masters in a lease described in (C) (1) is
                60%,
                not 100% (and the net revenue interest is at least 80% of the 100%
                working
                interest), then the ORRI in that lease shall be 60/100 of 6%, or
                3.6%.

            


    


    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    


    


    
      	 	
              (b)

            	
              If
                the net revenue interest in the same lease is less than 80% of the
                100%
                working interest, then the ORRI shall be reduced proportionately,
                meaning
                that, if the net revenue interest is, say, 75%, then the ORRI shall
                be
                reduced by 75/80 x 6%, or 5.625%. If the working interest is less
                than
                100% and the net revenue interest is less than 80%, then the reduction
                of
                the overriding royalty shall be implemented for both the working
                interest
                and the net revenue interest.

            


    

    


    In
      addition, upon written notice by Buyer to the owner or owners of the ORRI that
      Buyer has paid aggregate payments of $20,000,000 by
      virtue
      of the ORRI and Buyer’s request for assignment thereof
      (subject
      to the right of Masters to audit the payments aggregating the sum of
      $20,000,000), the owners of the Declining ORRI shall convey to Buyer an
      undivided 2% of 100% overriding royalty out of the Declining ORRI so that the
      owner or owners of the Declining ORRI shall thereafter be reduced to an ORRI
      equal to an aggregate of 4% of 100% of the production from the leases and units
      sold to Buyer, and when the aggregate payments on the out of the ORRI equal
      $30,000,000 (but not $30 million in addition to the $20 million threshold for
      the initial reduction of the ORRI; simply an additional $10 million after $20
      million has been reached), upon written notice thereof to the owner or owners
      of
      each of the Fixed and the Declining ORRIs (and subject to the same right to
      audit in Masters), the owners of the Declining ORRI shall convey to Buyer out
      of
      the Declining ORRI an additional undivided 2% of 100% overriding royalty so
      that
      the owner or owners of the Declining ORRI shall thereafter be reduced to an
      aggregate 2% of 100% ORRI, which shall remain constant thereafter, and the
      owners of the Fixed ORRI shall convey to Buyer out of the Fixed ORRI an
      undivided 1% of 100% overriding royalty so that the owner or owners of the
      Fixed
      ORRI shall thereafter be reduced to an aggregate 2% of 100% ORRI, which shall
      remain constant thereafter. The owners of the ORRI shall be entitled, upon
      their
      written election, to be paid for their respective shares of production from
      the
      lands burdened by the ORRI directly by the purchaser of production. In addition,
      at the election of the owners of the ORRI, they shall be entitled to take the
      ORRI share of production in kind and to separately market the same; provided,
      however, to the extent that additional facilities are required for the owners
      of
      the ORRI to take their share of production in kind, the owners of the ORRI
      shall
      bear the cost and expense of installing such facilities.

    


    B.          
       With
      respect to Section 4.1 (A) of the Original Agreement, and solely to the extent
      that the Examination Period applies to any due diligence being performed or
      to
      be performed by the source of financing for Buyer (“Buyer’s
      Financier”),
      “December 1, 2006” is deleted and “January 24, 2007” is inserted in lieu
      thereof. The materials which are made available to Buyer’s Financier for this
      investigation are limited to those which have been available at the offices
      of
      Scotia Watrous (USA), Inc., together with the reserve estimate dated August
      31,
      2006, prepared by R. A. Lenser and Associates, Inc., addressed to Masters
      Resources, LLC, as supplemented by report dated September 1, 2006. Buyer,
      through its counsel, has timely delivered to Masters’ counsel letters containing
      notices of Title Defects, and Masters acknowledges receipt thereof.



    
      
        
        

      

      
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    C.           
       Section
      8.1 of the Original Agreement is deleted and the following is inserted in lieu
      thereof:

    


    
      	 	
              “8.1

            	
              Date,
                Time and Place of Closing

            


    

    


    Unless
      the parties agree otherwise in writing and subject to the provisions in this
      Agreement, the completion of the transaction contemplated by this Agreement
      (the
“Closing”) will be held on or before February 9, 2007, at 10:00 a.m. Central
      Standard Time (or such earlier date or time as the parties may agree). The
      Closing will be held at the offices of Masters as set forth in the opening
      paragraph of this Agreement. In the event that the Closing does not occur before
      the close of business at 5:00 p.m. on February 28, 2007, Masters shall have
      the
      right to terminate this Agreement and to retain the Deposit.”

    


    D.          
       In
      Section 9.3 of the Original Agreement, “December 31, 2006” is deleted and
“February 28, 2007” is inserted in lieu thereof.

    


    II. MISCELLANEOUS

    


    A.           
      To
      the
      extent any provision of the Original Contract conflicts with any provision
      of
      this First Amendment, the provisions of this First Amendment shall control
      and
      be used to determine the obligations of the Parties.

    


    B.          
       The
      parties ratify confirm and adopt the Original Contract as amended and
      supplemented by this First Amendment.



    
      
        
        

      

      
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    Signed:
      December 29, 2006.

     

    
      	
              MASTERS
                RESOURCES, LLC

            	 	 	
              TEKOIL
                & GAS CORPORATION

            
	 	 	 	 
	 	 	 	 
	By: /s/
              John W. Barton	 	 	By: /s/
              Mark S. Western
	
              
                

              

              John
                W. Barton, Managing Member

            	 	 	
              
                

              

              Mark
                Western, Chairman and CEO

            


    

     

    
      	
              
                MASTERS
                  OIL & GAS, LLC

              

            	 	 	 
	 	 	 	 
	 	 	 	 
	By:
/s/
              John W. Barton	 	 	
            
	
              
                

              

              
                John
                  W. Barton, Managing Member

              

            	 	 	
            


    


    
      
        
        

      

      
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