Filed by sedaredgar.com - Doral Energy Corp. - Exhibit 10.3






LOAN AGREEMENT

THIS AGREEMENT dated as of the 24th day of
February, 2009

BETWEEN:

DORAL ENERGY CORP., a
Nevada corporation with a corporate office at 415 West Wall, Suite 500, Midland,
TX 79701

(hereinafter called the
"Borrower")

OF THE FIRST PART

AND:

GREEN SHOE INVESTMENTS
LTD., a Nevis corporation with a corporate office at P.O. Box 556, Main
Street, Charlestown, Nevis, West Indies

(hereinafter called the "Lender")

OF THE SECOND PART

WHEREAS the Lender has agreed to advance $100,000 (U.S.)
to the Borrower, and the Borrower has agreed to repay such amounts, on the terms
and subject to the conditions set forth in this Agreement;

NOW THEREFORE THIS AGREEMENT WITNESSES THAT in
consideration of the sum of $1.00 paid by each party to the other (the receipt
of which is hereby acknowledged) the parties hereto mutually covenant and agree
as follows:

1. INTERPRETATION

1.1 Definitions. Where used herein or in any amendment
hereto each of the following words and phrases shall have the meanings set forth
as follows:

	 	(a) 	
      "Agreement" means this Loan Agreement including the
      Schedules hereto together with any amendments hereof;

	 	 	 
	 	(c) 	
      "Event of Default" means any event set forth in paragraph
      6.1;

	 	 	 
	 	(d) 	
      "Loan" means the loan of $100,000 (U.S.) made by the
      Lender to the Borrower in accordance with this Agreement;

	 	 	 
	 	(e) 	
      “Maturity” means March 1, 2011; and

	 	 	 
	 	(f) 	
      "Principal Sum" means the sum of $100,000
  (U.S.).



1.2 Number and Gender. Wherever the singular or the
masculine are used herein the same shall be deemed to include the plural or the
feminine or the body politic or corporate where the context or the parties so
require.

1.3 Headings. The headings to the articles, paragraphs,
subparagraphs or clauses of this Agreement are inserted for convenience only and
shall not affect the construction hereof.

1.4 References. Unless otherwise stated a reference
herein to a numbered or lettered article, paragraph, subparagraph or clause
refers to the article, paragraph, subparagraph or clause bearing that number or
letter in this Agreement. A reference to this Agreement or herein means this
Loan Agreement, including the Schedule hereto, together with any amendments
thereof.




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1.5 Currency. All dollar amounts expressed herein refer
to lawful currency of the United States of America.

2. TERMS OF LOAN

2.1 Loan and Repayment. The Lender hereby agrees to lend
to the Borrower the Principal Sum of $100,000 (U.S.). The Loan shall be made in
United States currency and shall be repaid by the Borrower on or before March 1,
2011.

2.2 Interest. The Borrower shall pay on the amount of
the Principal Sum, interest at a rate of 5% per annum, payable on Maturity. The
Borrower shall pay interest at the aforesaid rate on all overdue interest.

2.3 Advances. The Lender shall advance to the Borrower
the sum of $100,000 on or about February 24, 2009, in the form of a certified
check, bank draft or wire transfer.

2.4 Pre-Payment. The Borrower may pre-pay all or any
portion of the Loan at any time.

2.5 Subordinated Debt. This Loan is subordinated to any
and all indebtedness, liabilities, and other obligations of Borrower to the
Senior Creditor, as defined and agreed to amongst Lender, Borrower, and
Macquarie Bank Limited in the Subordination Agreement, dated July 29, 2008 and
attached hereto as Schedule “B”.

3. PROMISSORY NOTE, EXTENSIONS &
WAIVER

3.1 Loan. To evidence the Loan, the Borrower agrees to
execute a promissory note in favor of the Lender in a form substantially similar
to the form attached hereto as Schedule “A”.

3.2 Extensions. The Lender may grant extensions as the
Lender may see fit without prejudice to the liability of the Borrower or to the
Lender's rights under this Agreement or under the Promissory Note.

3.3 Waiver. The Lender may waive any breach by the
Borrower of this Agreement or of any default by the Borrower in the observance
or performance of any covenant or condition required to be observed or performed
by the Borrower hereunder or under the Promissory Note. No failure or delay on
the part of the Lender to exercise any right, power or remedy given herein or by
statute or at law or in equity or otherwise shall operate as a waiver thereof,
nor shall any single or partial exercise of any right preclude any other
exercise thereof or the exercise of any other right, power or remedy, nor shall
any waiver by the Lender be deemed to be a waiver of any subsequent similar or
other event.

4. REPRESENTATIONS AND WARRANTIES

4.1 Representations. The Borrower represents and
warrants to the Lender, and acknowledges that the Lender is relying upon such
representations and warranties in entering into this Agreement, as follows:

	 	(a) 	
      the Borrower has the capacity to enter into this
      Agreement, and the execution of this Agreement and the completion of the
      transactions contemplated hereby shall not be in violation any agreement
      to which the Borrower is a party; and

	 	 	 
	 	(b) 	
      the Promissory Note has been duly executed by the
      Borrower and is enforceable against the Borrower in accordance with its
      terms.







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5. CLOSING ARRANGEMENTS

5.1 Conditions Precedent. The Lender's obligation to
advance the Principal Sum to the Borrower shall be subject to the satisfaction
of the following conditions:

	 	(a) 	
      the representations and warranties of the Borrower shall
      be true as of the date hereof and as of the dates the Principal Sum is, in
      whole or in part, advanced to the Borrower; and

	 	 	 
	 	(b) 	
      the Borrower shall have complied with all of its
      obligations hereunder.



The foregoing conditions precedent are inserted for the benefit
of the Lender and may be waived in whole or in part by the Lender at any time
prior to closing by delivering to the Borrower written notice to that
effect.

5.2 Time of Closing. The closing of the Loan shall take
place on execution of this Loan Agreement.

5.3 Deliveries by the Borrower. Upon receiving the
amount set out in Section 5.3 of this Agreement, the Borrower shall deliver or
cause to be delivered to the Lender a promissory note in the form attached
hereto as Schedule “A”.

6. EVENTS OF DEFAULT AND REMEDIES

6.1 Events of Default. Any one or more of the following
events, whether or not any such event shall be voluntary or involuntary or be
effected by operation of law or pursuant to or in compliance with any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body, shall constitute an Event of Default:

	 	(a) 	
      if the Borrower defaults in the payment of any monies due
      hereunder as and when the same is due;

	 	 	 
	 	(b) 	
      if the Borrower defaults in the observance or performance
      of any other provision hereof;

	 	 	 
	 	(c) 	
      if the Borrower commits an act of bankruptcy or makes a
      general assignment for the benefit of its creditors or otherwise
      acknowledges its insolvency; or

	 	 	 
	 	(d) 	
      if the Borrower makes default in the due payment,
      performance or observance, in whole or in part, of any debt, liability or
      obligation of the Borrower to the Lender, whether secured hereby or
      otherwise.



6.2 Remedies Upon Default. Upon the occurrence of any
Event of Default and at any time thereafter, provided that the Borrower has not
by then remedied such Event of Default, the Lender may, in its discretion, by
notice to the Borrower, declare this Agreement to be in default. At any time
thereafter, while the Borrower shall not have remedied such Event of Default,
the Lender, in its discretion, may:

	 	(a) 	
      declare the Loan and other monies owing by the Borrower
      to the Lender to be immediately due and payable;

	 	 	 
	 	(b) 	
      demand payment from the Borrower and exercise all
      remedies available to the Lender.



7. MISCELLANEOUS

7.1 Notices. Any notice required or permitted to be
given under this Agreement or the Promissory Note shall be in writing and may be
given by delivering same or mailing same by registered mail or sending same by
telegram, telex, telecopier or other similar form of communication to the
following addresses:




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	The Borrower: 	DORAL ENERGY CORP. 
	  	415 West Wall, Suite 500 
	  	Midland, TX 79701 
	  	  
	  	Fax: (888) 311-4939 
	  	  
	The Lender: 	GREEN SHOE INVESTMENTS LTD. 
	  	P.O. Box 556, Main Street, Charlestown, 
	  	Nevis, West Indies 
	  	  
	  	Attention: Roger Knox 
	  	Fax: +41 22 799 0801 


Any notice so given shall:

	 	(a) 	
      if delivered, be deemed to have been given at the time of
      delivery;

	 	 	 
	 	(b) 	
      if mailed by registered mail, be deemed to have been
      given on the fourth business day after and excluding the day on which it
      was so mailed, but should there be, at the time of mailing or between the
      time of mailing and the deemed receipt of the notice, a mail strike,
      slowdown or other labour dispute which might affect the delivery of such
      notice by the mails, then such notice shall be only effective if actually
      delivered; and

	 	 	 
	 	(c) 	
      if sent by telegraph, telex, telecopier or other similar
      form of communication, be deemed to have been given or made on the first
      business day following the day on which it was
sent.



Any party may give written notice of a change of address in the
aforesaid manner, in which event such notice shall thereafter be given to such
party as above provided at such changed address.

7.2 Amendments. Neither this Agreement nor any provision
hereof may be amended, waived, discharged or terminated orally, but only by an
instrument in writing signed by the party against whom enforcement of the
amendment, waiver, discharge or termination is sought.

7.3 Entire Agreement. This Agreement embodies the entire
agreement and understanding between the parties hereto and supersedes all prior
agreements and undertakings, whether oral or written, pertaining to the subject
matter hereof.

7.4 Action on Business Day. If the date upon which any
act or payment hereunder is required to be done or made falls on a day which is
not a business day, then such act or payment shall be performed or made on the
first business day next following.

7.5 No Merger of Judgment. The taking of a judgment on
any covenant contained herein or on any covenant set forth in any other security
for payment of any indebtedness hereunder or performance of the obligations
hereby secured shall not operate as a merger of any such covenant or affect the
Lender's right to interest at the rate and times provided in this Agreement on
any money owing to the Lender under any covenant herein or therein set forth and
such judgment shall provide that interest thereon shall be calculated at the
same rate and in the same manner as herein provided until such judgment is fully
paid and satisfied.

7.6 Severability. If any one or more of the provisions
of this Agreement should be invalid, illegal or unenforceable in any respect in
any jurisdiction, the validity, legality or enforceability of such provision
shall not in any way be affected or impaired thereby in any other jurisdiction
and the validity, legality and enforceability of the remaining provisions
contained herein shall not in any way be affected or impaired thereby.




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7.7 Successors and Assigns. This Agreement shall enure
to the benefit of and be binding upon all parties hereto and their respective
heirs, personal representatives, successors and assigns, as the case may be.

7.8 Governing Law. This Agreement shall be governed by
and be construed in accordance with the laws of the State of Nevada and the
parties hereto agree to submit to the jurisdiction of the courts of Nevada with
respect to any legal proceedings arising herefrom.

7.9 Independent Legal Advice. This Agreement has been
prepared by O’Neill Law Group PLLC acting solely on behalf of the Borrower and
the Lender acknowledges that it has been advised to obtain independent legal
advice.

7.10 Time. Time is of the essence of this Agreement.

7.11 Headings. The headings of the paragraphs of this
Agreement are inserted for convenience only and do not define, limit, enlarge or
alter the meanings of any paragraph or clause herein.

7.12 Counterparts. This agreement may be executed in one
or more counter-parts, each of which so executed shall constitute an original
and all of which together shall constitute one and the same agreement.

IN WITNESS WHEREOF the parties hereto have caused this
Agreement to be duly executed and delivered as of the day and year first written
above.

THE BORROWER:

DORAL ENERGY CORP. 
by its authorized signatory:

/s/ Everett Willard Gray, II
Everett
Willard Gray, II
Title: Chief Executive Officer

THE LENDER:

GREEN SHOE INVESTMENTS LTD. 
by its authorized
signatory:

/s Roger Knox
Roger Knox 
Title:
Director




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SCHEDULE “A”

FORM OF PROMISSORY NOTE

PROMISSORY NOTE

	EXECUTED BY: 	DORAL ENERGY CORP. 
	  	(the "Borrower") 
	 	 
	IN FAVOR OF: 	GREEN SHOE INVESTMENTS LTD 
	  	(the "Lender") 
	 	 
	PRINCIPAL AMOUNT: 	$100,000 (U.S.) 
	 	 
	DUE DATE: 	March 1, 2011 
	 	 


FOR VALUE RECEIVED the Borrower hereby promises to pay
to or to the order of the Lender on or before March 1, 2011, the principal sum
of $100,000 (U.S.), together with interest thereon at the rate of 5% per annum,
calculated and compounded annually, both before and after maturity from the date
hereof.

The Borrower waives presentment, demand, notice, protest and
notice of dishonour and all other demands and notices in connection with the
delivery, acceptance, performance, default or enforcement of this Promissory
Note.

The Borrower agrees this Promissory Note may be negotiated,
assigned, discounted, or pledged by the Lender and in every case payment will be
made to the holder of this Promissory Note instead of the Lender upon notice
being given by the holder to the undersigned, and no holder of this Promissory
Note will be affected by the state of accounts between the undersigned and the
Lender or by any equities existing between the undersigned and the Lender and
will be deemed to be a holder in due course and for the value of the Promissory
Note held by him.

DATED at Midland, TX this 24th day of February,
2009.

DORAL ENERGY CORP. 
by its authorized signatory:

________________________________
Everett Willard Gray,
II




SCHEDULE “B”

SUBORDINATION AGREEMENT

SUBORDINATION AGREEMENT

     This SUBORDINATION AGREEMENT (as
amended or modified, the “Subordination Agreement”) is by and
among GREEN SHOE INVESTMENTS LTD., a Nevis corporation, (“Subordinated
Creditor”, whether one or more), whose address is P.O. Box 556, Main Street,
Charlestown, Nevis, West Indies, DORAL ENERGY CORP., a Nevada corporation
(“Borrower”), whose address is 111 Sepulveda Blvd., Suite 250, Manhattan
Beach, California 90266 and MACQUARIE BANK LIMITED, a bank incorporated under
the laws of Australia (“Administrative Agent”), with offices at Level 15,
1 Martin Place, Sydney, New South Wales, 2000 Australia.

Background

     1. Borrower, Administrative Agent
and each of the Lenders (as defined in the Credit Agreement) are parties to the
Senior First Lien Secured Credit Agreement dated as of July 29, 2008 (as
amended, supplemented or modified from time to time, the “Credit
Agreement”). Borrower’s obligations to each of the Lenders under the Credit
Agreement are secured by a senior mortgage lien and first-priority security
interest conveying all of the real and personal property of Borrower.

     2. Each of Lenders’ obligations
under the Credit Agreement is conditioned upon, among other things, the
subordination of all obligations owed by Borrower to the Subordinated Creditor
to the obligations owed by Borrower to Lenders under the Credit Agreement and
the other Loan Documents (as defined in the Credit Agreement).

     3. Capitalized terms not defined
in this Subordination Agreement shall have the meanings set forth in the Credit
Agreement.

Agreements

     To comply with the terms and
conditions of the Credit Agreement and for other good and valuable
consideration, the receipt and sufficiency of which are acknowledged by the
parties, the Subordinated Creditor, Borrower and Lenders agree as follows:

     Section 1. Subordination of
Obligations and Priority.

     (a) The payment of and any liens
or security interests securing payment of any and all Subordinated Debt (defined
below) is expressly subordinated to the extent and in the manner set forth in
this Subordination Agreement to the Senior Indebtedness (defined below) and the
liens and security interests securing the Senior Indebtedness. The term
“Subordinated Debt” as used in this Subordination Agreement means
any and all indebtedness, liabilities and obligations of Borrower to the
Subordinated Creditor, absolute or contingent, direct or indirect, joint,
several or independent, now outstanding or owing or which may hereafter be
existing or 




incurred, arising by operation of law or otherwise, due or to
become due, or held or to be held by the Subordinated Creditor, whether created
directly or acquired by assignment, as a participation, conditionally, as
collateral security from another or otherwise, including indebtedness,
obligations and liabilities of Borrower to Subordinated Creditor as a member of
any partnership, syndicate, association or other group, and whether incurred by
Borrower as principal, surety, endorser, guarantor, accommodation party or
otherwise, including, without limiting the generality of the foregoing, all
indebtedness, liabilities and obligations of Borrower to the Subordinated
Creditor arising out of any operating agreement or similar agreement between
Subordinated Creditor and Borrower.

     The term “Senior
Indebtedness” as used in this Subordination Agreement means any and all
indebtedness, liabilities and other Obligations of Borrower to Senior Creditor
(as defined below) absolute or contingent, direct or indirect, joint, several or
independent, now outstanding or owing or which may hereafter be existing or
incurred, arising by operation of law or otherwise, due or to become due, or
held or to be held by Senior Creditor whether created directly or acquired by
assignment, as a participation, conditionally, as collateral security from
another or otherwise, including indebtedness, obligations and liabilities of
Borrower to Senior Creditor as a member of any partnership, syndicate,
association or other group, and whether incurred by Borrower as principal,
surety, endorser, guarantor, accommodation party or otherwise and including,
without limitation, all Obligations (as defined in the Credit Agreement) owed by
Borrower to Senior Creditor under the Credit Agreement, the Swap Agreement and
the other Loan Documents.

     (b) Priority. The agreements of
Borrower, Senior Creditor and Subordinated Creditor herein are applicable
without regard to the date a loan or extension of credit is made to Borrower.
The term “Senior Creditor” includes Administrative Agent, each of the
Lenders party to the Credit Agreement and Macquarie Bank Limited under the Swap
Agreement.

     Section 2. Restrictions on
Subordinated Creditor. During such time as any Senior Indebtedness remains
unpaid, Subordinated Creditor will not ask for, demand, sue for, take, receive
or accept from the Borrower, by set off or in any other manner, any payment or
distribution on account of the Subordinated Debt, nor present any instrument
evidencing the Subordinated Debt for payment (other than such presentment as may
be necessary to prevent discharge of other liable parties on such instrument);
[provided, however, nothing contained herein shall
prevent Subordinated Creditor from (a) receiving any scheduled payment from
Borrower pursuant to the instruments set forth on Exhibit A (the
“Subordinated Debt Instruments”) and (b) receiving payment from
Borrower for goods and services provided to Borrower by Subordinated Creditor in
the ordinary course of business within thirty (30) days of the date hereof or
after the date hereof.]

     Section 3. Prohibition of All
Payments Following Default and Notice.

     (a) If there shall occur and be
continuing any Event of Default, then, unless and until such Event of Default
shall have been cured, or unless and until the Senior Indebtedness shall be paid
in full, the Subordinated Creditor will not ask for, sue for, take, demand,
receive or accept from Borrower, by set off or in any other manner, any payment
or distribution on account of the Subordinated Debt nor present any Subordinated
Debt Instrument 

2




or any instrument evidencing the Subordinated Debt for payment
(other than such presentment as may be necessary to prevent discharge of other
liable parties on such instrument).

     (b) In the event that Borrower
defaults under the Subordinated Debt prior to the full and final payment of the
Senior Indebtedness, Borrower shall provide Lender with notice of such
default.

     Section 4. Payments Cannot
Create a Default. The Subordinated Creditor will not ask for, demand, sue
for, take, receive or accept from Borrower, by set off or in any other manner,
any payment or distribution on account of the Subordinated Debt, if the making
of such payment would constitute, or would result in the occurrence of, a
violation of the provisions of any instrument or agreement evidencing, in
connection with, as security for or providing for the issuance of any Senior
Indebtedness or would result in the occurrence of any event which with the
giving of notice or lapse of time or both would constitute a default or an event
of default under the Credit Agreement or any other Loan Document.

     Section 5. Unauthorized
Receipt of Payment by Subordinated Creditor. In the event the Subordinated
Creditor shall receive any payment or distribution on account of the
Subordinated Debt which Subordinated Creditor is not entitled to receive under
this Subordination Agreement, Subordinated Creditor will hold any amount so
received in trust for Senior Creditor and will promptly turn over such payment
to Senior Creditor in the form received by Subordinated Creditor (together with
any necessary endorsement) to be applied against the Senior Indebtedness.

     Section 6. Restrictions on
Actions to Recover Subordinated Debt. The Subordinated Creditor will not
commence any action or proceeding against Borrower to recover all or any part of
the Subordinated Debt or join with any other creditor, unless Senior Creditor
shall also join, in bringing any proceedings against Borrower under any
bankruptcy, reorganization, readjustment of debt, arrangement of debt,
receivership, liquidation or insolvency law or statute of the Federal or any
state government unless and until all Senior Indebtedness shall have been paid
in full.

     Section 7. Insolvency or
Bankruptcy by Borrower. In the event of any receivership, insolvency,
bankruptcy, assignment for the benefit of creditors, reorganization or
arrangement with creditors, adjustment of debt, whether or not pursuant to
bankruptcy laws, the sale of all or substantially all of the assets,
dissolution, liquidation, or any other marshaling of the assets and liabilities
of Borrower, the Subordinated Creditor will at Senior Creditor’s request file
any claim, proof of claim, proof of interest or other instrument of similar
character necessary to enforce the obligations of Borrower in respect of the
Subordinated Debt and will hold in trust for Senior Creditor and pay over to
Senior Creditor, in the form received (together with any necessary endorsement),
to be applied on the Senior Indebtedness, any and all monies, dividends or other
assets received in any such proceedings on account of the Subordinated Debt
unless and until the Senior Indebtedness shall be paid in full. In the event
that the Subordinated Creditor shall fail to take any such action requested by
Senior Creditor, Senior Creditor, may, as attorney in fact for the Subordinated
Creditor take such action on behalf of the Subordinated Creditor, and the
Subordinated Creditor hereby appoints Senior Creditor as attorney in fact for
the Subordinated Creditor to demand, sue for, collect and receive any and all
such monies, dividends or other assets and give acquittance therefor and to file
any claim, proof of claim, proof of interest or other instrument of similar
character and to take such other proceedings in Senior Creditor’s own 

3




name or in the name of the Subordinated Creditor as Senior
Creditor may deem necessary or advisable for the enforcement of this
Subordination Agreement, and the Subordinated Creditor will execute and deliver
to Senior Creditor such other and further powers of attorney or other
instruments as Senior Creditor may request in order to accomplish the
foregoing.

     Section 8. Senior Creditor’s
Rights. Senior Creditor may, at any time, and from time to time, without the
consent of or notice to the Subordinated Creditor, without incurring
responsibility to the Subordinated Creditor and without impairing or releasing
any of Senior Creditor’s rights or any of the obligations of the Subordinated
Creditor under this Subordination Agreement:

     (a) change the amount of the
Senior Indebtedness, manner, place or terms of payment, or change or extend for
any period the time of payment of, or renew, rearrange or otherwise modify or
alter, the Senior Indebtedness or any instrument or agreement now or hereafter
executed evidencing, in connection with, as security for or providing for the
issuance of any of the Senior Indebtedness in any manner, or enter into or amend
in any manner any other agreement relating to the Senior Indebtedness (including
provisions restricting or further restricting payments of the Subordinated
Debt);

     (b) sell, exchange, release or
otherwise deal with all or any part of any property by whomsoever at any time
pledged or mortgaged to secure, howsoever securing, the Senior Indebtedness in
accordance with the applicable Loan Documents;

     (c) release anyone liable in any
manner for payment or collection of the Senior Indebtedness;

     (d) exercise or refrain from
exercising any rights against Borrower or others (including the Subordinated
Creditor); and

     (e) apply any sums received by
Senior Creditor, by whomsoever paid and however realized, to payment of the
Senior Indebtedness in such a manner as Senior Creditor, in its sole discretion,
may deem appropriate.

     Section 9. Documentation of Subordinated Debt. The
Subordinated Creditor will:

     (a) cause all Subordinated Debt
to be evidenced by a note, debenture or other instrument evidencing the
Subordinated Debt;

     (b) at Senior Creditor’s request,
promptly surrender or cause to be surrendered any such note, debenture, or
instrument evidencing the Subordinated Debt so that a statement or legend may be
entered thereon to the effect that such note, debenture, or other instrument is
subordinated to the Senior Indebtedness in favor of Senior Creditor in the
manner and to the extent set forth in this Subordination Agreement;

     (c) mark the books of
Subordinated Creditor to show that the Subordinated Debt is subordinated to the
Senior Indebtedness in the manner and to the extent set forth in this
Subordination Agreement; and

4




     (d) cause all financial
statements of the Subordinated Creditor hereafter prepared for delivery to any
person to make specific reference to the provisions of this Subordination
Agreement.

     Section 10. Notices. All
notices and other communications provided for hereunder shall be in writing
(including by facsimile transmission). All such written notices shall be mailed,
faxed or delivered, to the applicable address, or facsimile number set out below
or to such other address, or facsimile number, as shall be designated by such
party in a notice to the other parties. All such notices and other
communications shall be deemed to be given or made upon the earlier to occur of
(a) actual receipt by the relevant party hereto and (b) (i) if delivered
by hand or by courier, upon delivery; (ii) if delivered by mail, four
Business Days after deposit in the mails, postage prepaid; and (iii) if
delivered by facsimile, when sent and the sender has received electronic
confirmation of error free receipt. In no event shall a voicemail message be
effective as a notice, communication or confirmation hereunder.

	 	If to Administrative Agent: Macquarie Bank
      Limited 
	 	  	Houston Representative Office 
	 		
      One Allen Center 

	 	  	500 Dallas Street, Suite 3100 
	 	  	Houston, Texas 77002 
	 	  	Attention: 	Michael Sextro 
	 	  	Telephone: 	713-275-6207 
	 	  	Facsimile: 	713-275-6222 
	 	  	E-Mail: 	michael.sextro@macquarie.com 
	 	  	  	  
	 	With a copy to: Greenberg Traurig, LLP 
	 	  	1000 Louisiana, Suite 1700 
	 	  	Houston, Texas 77002 
	 	  	Attention: 	Douglas C. Atnipp 
	 	  	Telephone: 	713-374-3500 
	 	  	Facsimile: 	713-374-3505 
	 	  	E-Mail: 	atnippd@gtlaw.com 
	 	  	  	  
	 	If to Subordinated Creditor: Green Shoe
      Investments Ltd. 
	 	  	P.O. Box 556, Main Street,
      Charlestown, 
	 		
      Nevis, West Indies 

	 	  	Attention: 	Roger Knox 
	 	  	Telephone: 	  
	 	  	Facsimile: 	+41 22 799 0801 
	 	  	E-Mail: 	  
	 	  	  	  
	 	If to Borrower: Doral Energy Corp 	  
	 	  	111 N. Sepulveda Blvd. 
	 	  	Suite 250 	  
	 	  	Manhattan Beach, CA 90266 
	 	  	Attention: 	Paul Kirkitelos 
	 	  	Telephone: 	310-990-8708 


5





	 	Facsimile: 	253-541-7833 
	 	E-Mail: 	paulk@doralenergy.com 


     Section 11. Execution of
Instruments. The Subordinated Creditor agrees to execute any and all other
instruments necessary as required by the Lender to subordinate the Subordinated
Debt to the Senior Indebtedness as herein provided.

     Section 12. Assignment by
Subordinated Creditor. Subordinated Creditor will not assign or transfer to
others any claim the Subordinated Creditor has or may have against Borrower as
long as any of the Senior Indebtedness remains outstanding, unless such
assignment or transfer is expressly made subject to this Subordination
Agreement.

     Section 13. Warranties and
Representations. The Subordinated Creditor represents and warrants that (a)
neither the execution nor delivery of this Subordination Agreement nor
fulfillment of or compliance with the terms and provisions hereof will conflict
with, or result in a breach of the terms, conditions or provisions of, or
constitute a default under, any agreement or instrument (including, without
limitation, any formation documents) to which Subordinated Creditor is now
subject, (b) none of the Subordinated Debt is or will be subordinated to any
other indebtedness of Borrower other than the Senior Indebtedness unless
otherwise agreed by Lender, (c) except for the Subordinated Debt evidenced by
the Subordinated Debt Instruments, as of the date of this Agreement, Borrower
has no additional debt due and owing to Subordinated Creditors and (d) Exhibit B
contains a listing of all liens filed by Subordinated Creditor relating to the
Subordinated Debt.

     Section 14. Waiver of Notice
of Acceptance. Notice of acceptance of this Subordination Agreement is
waived, acceptance on the part of Lender being conclusively presumed by its
request for this Subordination Agreement and delivery of the same to it.

     Section 15. Assignment by
Lender. This Subordination Agreement may be assigned by Lender in connection
with any assignment or transfer of the Senior Indebtedness.

     Section 16. GOVERNING LAW.
THIS SUBORDINATION AGREEMENT SHALL BE CONSTRUED UNDER AND GOVERNED BY THE LAWS
OF THE STATE OF TEXAS AND APPLICABLE FEDERAL LAW.

     Section 17. Severability.
If any provision (or portion of any provision) of this Subordination Agreement
is rendered or declared invalid, illegal or unenforceable by reason of any
existing or subsequently enacted legislation or by a final decision of any court
of competent jurisdiction, the parties shall promptly meet and negotiate
substitute provisions for those rendered invalid, illegal or unenforceable, but
all of the remaining provisions will remain in full force and effect.

     Section 18. Counterparts.
This Subordination Agreement may be executed in two or more counterparts, and it
shall not be necessary that the signatures of all parties be contained together
on any one counterpart of this Subordination Agreement. Each counterpart will be
deemed an original, but all counterparts taken together will constitute one and
the same agreement.

6




     Section 19. ENTIRE AGREEMENT;
AMENDMENT. THIS SUBORDINATION AGREEMENT REFLECTS THE ENTIRE AGREEMENT OF THE
PARTIES WITH RESPECT TO THE MATTERS COVERED BY THIS SUBORDINATION AGREEMENT AND
CANNOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS AMONG ANY OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS
AMONG THE PARTIES. This Subordination Agreement may be amended and the rights of
any party under this Subordination Agreement may be waived only pursuant to a
written agreement signed by each of the parties to this Subordination
Agreement.

[SIGNATURES BEGIN ON THE FOLLOWING PAGE]

7




     IN WITNESS WHEREOF, the
undersigned has executed this instrument effective as of July 22, 2008.

	 	SUBORDINATED CREDITOR: 
	 	  	  
	 	GREEN SHOE INVESTMENTS LTD.,
    
	 	a Nevis corporation 
	 	  	  
	 	  	  
	 	By: 	
      /s/ Roger Knox 

	 	Name: 	Roger Knox 
	 	Title: 	Director 


[SIGNATURE PAGE TO SUBORDINATION AGREEMENT]




     IN WITNESS WHEREOF, the
undersigned has caused this instrument to be executed by its duly authorized
undersigned officer effective as of July 29, 2008.

	 	BORROWER: 
	 	  	  
	 	DORAL ENERGY CORP., 
	 	a Nevada corporation 
	 	  	  
	 	  	  
	 	By: 	
      /s/ Paul C. Kirkitelos 

	 	Name: 	Paul C. Kirkitelos 
	 	Title: 	President & CEO 


[SIGNATURE PAGE TO SUBORDINATION AGREEMENT]




     IN WITNESS WHEREOF, the
undersigned has caused this instrument to be executed by its duly authorized
undersigned officers effective as of July 29, 2008.

	 	LENDER: 
	 	  	  
	 	MACQUARIE BANK LIMITED, 
	 	a bank incorporated under the laws of
      Australia 
	 	  	  
	 	  	  
	 	By: 	 /s/ Andrew Sinclair 
	 	Name: 	Andrew Sinclair 
	 	Title: 	Division Director 
	 	  	  
	 	  	  
	 	By: 	 /s/ Thomas Cullinan 
	 	Name: 	Thomas Cullinan 
	 	Title: 	Attorney 


[SIGNATURE PAGE TO SUBORDINATION AGREEMENT]




EXHIBIT A

Subordinated Debt Instruments

None.




EXHIBIT B

Liens

None.