EXHIBIT 10.3



                            SARATOGA RESOURCES, INC.
                               A TEXAS CORPORATION
                         301 Congress Avenue, Suite 1550
                               Austin, Texas 78701
                            Telephone: (512) 478-5717
                            Facsimile: (512) 478-5733

                                  June 21, 1999

Mr. Tom E. Robinson Ivy Oil Company, LLC
2304 Hancock Drive, Suite 5
Austin, Texas 78756

Mr. Mike Mount
Trek Oil and Gas, Inc.
811 Dallas, Suite 819
Houston, Texas 77002

              RE:   Letter Agreement
                    Stonewall Prospects
                    Adcock Farms No. 1 Well
                    Dawson County, Texas

Dear Mr. Robinson and Mr. Mount:

         Saratoga  Resources,  by  virtue  of a Letter  Agreement  ("DBX  Letter
Agreement")  dated  March 22,  1999  executed  by and  between  DBX  Geophysical
Corporation, a Texas corporation, 10134 Panther Ridge, Dallas, Texas 75243 (DBX)
and Saratoga Resources,  Inc., a Texas corporation,  301 Congress Avenue,  Suite
1550,  Austin,  Texas 78701,  ("Saratoga")  has obtained the right to review and
utilize certain prospect  documentation  and related  information with regard to
the above-referenced  prospects prepared and furnished by DBX. The documentation
relates  to the  geological  merit  and  developmental  potential  of the AMI as
defined in the DBX Letter Agreement, which is incorporated herein by reference.

         Whereas Ivy Oil Company,  L.L.C.,  a Texas Limited  Liability  Company,
2304 Hancock Drive,  Suite 5, Austin,  Texas 78756,  (Ivy) has obtained  certain
leasehold  interests  within the AMI, which lease schedule is attached hereto as
Exhibit "A" and which may be amended by mutual agreement between the undersigned
parties from time to time.

         Whereas Trek Oil and Gas, Inc., a Texas corporation,  811 Dallas, Suite
819, Houston,  Texas 77002, (Trek) possesses certain expertise in evaluating and
processing the seismic  information  related to the AMI and has agreed to render
its services,  time and talents to  facilitate  the  development  and funding of
certain prospects within the AMI.



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         Now,  Therefore,  for Ten Dollars  ($10.00) and other good and valuable
consideration,  the receipt  and  sufficiency  of which is hereby  acknowledged,
Saratoga,  Ivy and Trek agree to enter into this  Letter  Agreement,  ("Saratoga
Letter Agreement") for the mutual development of certain prospects identified by
the  undersigned   parties  located  within  the  boundaries  of  the  AMI.  The
undersigned  parties agree to  collaborate to evaluate and acquire the necessary
leasehold and acreage to develop all mutually  acceptable  prospects  within the
AMI.  The parties  agree to develop  these  prospects  under the terms which are
substantially  similar to those  contained in an AAPL 1989 Model Form  Operating
Agreement  along with any  mutually  acceptable  terms which are attached to the
"Other Provisions" section of the Operating  Agreement.  The undersigned parties
agree to jointly develop the prospects  identified  within the AMI. Any interest
obtained in the AMI by any of the  undersigned  parties  shall be deemed to have
been obtained for the mutual and equal benefit of all of the undersigned parties
under the terms of this  Letter  Agreement.  The  undersigned  parties  agree to
jointly share in the developmental costs, expenses and benefits of the prospects
within the AMI,  each party  bearing or being  entitled to receive its one-third
(1/3) proportionate share of all costs, expenses, revenues, and benefits arising
out of the  mutual  development  of such  prospects.  Upon  request of any party
hereto,  the  undersigned   parties  agree  to  enter  into  a  more  formalized
Exploration  Agreement outlining the terms and provisions under which the mutual
development of the AMI is to occur.

         Executed, agreed to and effective this 21st day of June 1999.

                                        SARATOGA RESOURCES, INC.

                                        /S/ Thomas F. Cooke
                                        ________________________________________
                                  By:   Thomas F. Cooke, Chief Executive Officer

                                        IVY OIL COMPANY, L.L.C.

                                        /S/ Tom E. Robinson
                                        ________________________________________
                                  By:   Tom E. Robinson, President

                                        TREK OIL AND GAS, INC.

                                        /S/ Mike Mount
                                        ________________________________________
                                  By:   Mike Mount, Vice President





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