ASSIGNMENT  OF  JUDGMENT  AGREEMENT


     This  LITIGATION  CLAIMS  ASSIGNMENT AGREEMENT ("Assignment") is made as of
December  1, 1998 by and between PENN OCTANE CORPORATION, a Delaware corporation
(formerly  known  as "International Energy Development Corp.", and herein called
"Assignor")  and  CASTLE  ENERGY  CORPORATION,  as  assignee  for  itself and as
Collateral  Agent  ("Collateral  Agent")  for  the  Lenders listed on Schedule I
hereto  ("Lenders").

     WHEREAS,  Assignor, and Lenders have entered into that certain Rollover and
Assignment  Agreement  dated  as of December 1, 1998 (as the same may be further
amended  from  time  to  time,  the  "Rollover  Agreement");

     WHEREAS, Assignor, Collateral Agent, and the Lenders have entered into that
certain  Collateral  Agreement  dated as of December 1, 1998 (as the same may be
amended  from  time  to  time,  the  "Collateral  Agreement");

     WHEREAS,  Assignor  has  represented  to Collateral Agent and the Creditors
that:  an  arbitral  award  was  rendered  against  International  Bank  of
Commerce-Brownsville  ("IBC")  in  favor  of Assignor; the value of the arbitral
award as of July 31, 1998 was approximately $3.4 million; a judgment was entered
on  February  28,  1996  by the 197th Judicial District Court of Cameron County,
Texas,  in  Civil  Action  No.  94-08-4008-C,  known  as  International  Energy
                                                          ---------------------
Development Corp. v. International Bank of Commerce - Brownsville; such judgment
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modified  the  arbitral  award  in  certain respects; an appeal was taken to the
Court  of  Appeals for the Thirteen District of Texas (the "Corpus Christi Court
of  Appeals"); on June 18, 1998, the Corpus Christi Court of Appeals rendered an
Opinion and Order in No. 13-96-298-CV, known as International Bank of Commerce -
                                                --------------------------------
Brownsville, Appellant v. International Energy Development Corp., Appellee; such
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Opinion and Order confirmed the original arbitral award in all respects; and IBC
has  filed  a  motion  for  rehearing  with the Corpus Christi Court of Appeals.

     WHEREAS,  by  this  Assignment,  the  respective  parties  to  the Rollover
Agreement  and the Collateral Agreement wish to provide, among other things, for
the  assignment  and  recordation  of  the  Judgment  (as  hereinafter  defined)
pursuant  to  Section  12.014  of  the  Texas  Property  Code.

     NOW,  THEREFORE,  in  consideration  of  the  premises and other value, the
receipt  and  sufficiency  of  which  are  hereby  acknowledged,  Assignor  and
Collateral  Agent  for  itself  and  the  Lenders  do  hereby  agree as follows:

     1.     To  secure the Loans and all other obligations of Assignor under the
Rollover  Agreement,  the  Amended Notes (as defined in the Rollover Agreement),
the  Collateral  Agreement,  this  Assignment  and  all  documents  executed  or
delivered by Assignor in connection therewith (collectively, the "Obligations"),
Assignor  hereby unconditionally and irrevocably assigns, transfers, conveys and

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sets  over  to  Collateral  Agent for the benefit of itself and all Lenders, and
grants  a  security  interest in and lien on, all of Assignor's right, title and
interest  in and to: (a) that certain arbitral award ("Arbitral Award") in favor
of  International  Energy  Development  Corp. against IBC; the judgment known as
International  Energy  Development  Corp.  v.  International  Bank of Commerce -
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Brownsville,  entered  on February 28, 1996 by the 197th Judicial District Court
-----------
of  Cameron  County,  Texas,  Civil Action No. 94-08-4008-C (the "District Court
Decision");  that  certain  Opinion  and  Order  known  as International Bank of
                                                           ---------------------
Commerce  -  Brownsville,  Appellant  v. International Energy Development Corp.,
--------------------------------------------------------------------------------
Appellee,  Court of Appeals for Thirteenth District of Texas Corpus Christi, No.
--------
13-96-298-CV,  entered  on  June  18,  1998  ("Appellate Decision"; the Arbitral
Award,  the  District Court Decision, the Appellate Decision and any other order
related thereto or any appeal therefrom or modification thereof are collectively
referred  to  herein  as,  the  "Judgment");  and  (b)  any and all appeal bond,
collateral,  payment,  realization or proceeds relating to or arising out of the
Judgment,  any appeal thereof or any settlement with respect thereto, including,
without  limitation,  all  damages, statutory damages or penalties, exemplary or
punitive  damages,  attorneys'  fees,  costs  and pre-judgment and post-judgment
interest  (all  of  the  foregoing being collectively referred to herein as, the
"Proceeds").  Collateral  Agent  on  behalf  of  itself and the Lenders shall be
entitled  to  the  Proceeds subject to the terms and conditions set forth in the
Collateral  Agreement  until  the  Obligations are paid in full and the Rollover
Agreement  is  terminated.

     2.     Assignor  represents  and warrants that it owns all right, title and
interest  in and to the Judgment, and the Proceeds, free and clear of all liens,
claims  and  encumbrances  except as granted pursuant to the Rollover Agreement,
the  Collateral  Agreement and this Assignment.  Assignor further represents and
warrants  that  it  is  the  same entity as the plaintiff named in the Judgment,
having  changed  its  name  from  International Energy Development Corp. to Penn
Octane  Corporation.

     3.     Assignor  agrees  that in the event it receives any of the Proceeds,
it shall set aside and hold in trust for Collateral Agent all such Proceeds, and
pay  such  Proceeds  to  Collateral  Agent  subject  to the Collateral Agreement
immediately  upon  receipt  thereof  by  Assignor.

     4.     For  the  purpose  of  carrying  out  the  terms of this Assignment,
Assignor  hereby  irrevocably  constitutes and appoints Collateral Agent and any
officer  or  agent  thereof,  with  full  power  of  substitution,  as  its
attorney-in-fact  with  full  irrevocable  power  and authority in the place and
stead  of  Assignor and in the name of Assignor or in its own name, from time to
time  in  Collateral  Agent's  sole  discretion,  without notice to or assent by
Assignor,  to  do  the  following  on  behalf  of  Assignor:

     (i)     to  direct  any  party  liable  for  any payment under the Judgment
(including any entity that has posted a bond related thereto) to make payment of
any  and  all  Proceeds  directly  to Collateral Agent subject to the Collateral
Agreement;

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     (ii)     to  ask,  demand,  collect,  receive  and  give  acquittances  and
receipts for any and all Proceeds (each of which acquittances and receipts shall
be  a  full and complete release, discharge and acquittance to the extent of any
amount paid to Collateral Agent) and, in the name of Assignor or its own name or
otherwise,  to  take  possession  of and endorse and collect any checks, drafts,
notes,  acceptances  or  other  instruments  for  the  payment  of Proceeds; and

This  power  of  attorney  is  a  power  coupled  with  an interest and shall be
irrevocable  until the discharge by the Assignor of all the Obligations owing to
the  Collateral  Agent and the Lenders including, without limitation, payment in
full  of  the  indebtedness  of  Assignor  to  Collateral Agent and the Lenders.

     The parties hereto acknowledge and agree that Collateral Agent shall not be
entitled  to  compromise,  settle,  or  otherwise  affect  the  Judgment  or  to
participate  in  or  control  any  appeal,  settlement,  or  prosecution  of the
Judgment.

     5.     If any Event of Default (as such term is defined in any Amended Note
or  used  in  the  Rollover  Agreement)  shall  have occurred and be continuing,
Collateral  Agent  shall  have, in addition to all other rights granted to it in
the  Rollover  Agreement,  the  Amended  Notes, this Assignment, or in any other
instrument or agreement securing, evidencing or relating to the Obligations, all
rights  of  a  secured party under applicable law as if (and whether or not) the
Judgment  and/or  the  Proceeds are collateral subject to Chapter 9 of the Texas
Business  and  Commerce  Code.

     6.     This  Assignment  shall  be binding upon and inure to the benefit of
Assignor,  Collateral  Agent and the Lenders and their respective successors and
assigns.

     7.     This  Assignment  shall  be  governed by and construed in accordance
with  the  laws  of  the  State  of Texas other than the conflicts of laws rules
thereof.

     8.     If  any provision of this Assignment shall for any reason be held to
be  invalid,  illegal  or  unenforceable,  such  invalidity,  illegality  or
unenforceability shall not affect any other provision of such document, and such
invalid,  illegal  or  unenforceable  provision  shall  be interpreted in such a
manner  to render it valid, legal and enforceable and to most nearly achieve the
intents  and  purposes  hereof.

     9.     Each  party  hereto  agrees  to  promptly execute and deliver to the
other  party  hereto any and all further or additional instruments and documents
including,  without  limitation, Uniform Commercial Code-1 financing statements,
and take such further action as such other party may reasonably request in order
to  fully  effect  the  purposes  of  this  Assignment.  The  provisions of this
Assignment  shall  continue  in  full  force  and  effect  notwithstanding  any
commencement  of  a  case  under  the  federal  bankruptcy  code.  Neither  this
Assignment  nor  any  of  the  terms  hereof may be amended, waived, discharged,
modified  or terminated in any respect unless such amendment, waiver, discharge,
modification, or termination is by an instrument in writing signed by each party
hereto.

                                        3
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     10.     All  notices, consents, approvals, or other communications required
or  permitted  to  be given pursuant hereto shall be in writing and shall either
(i)  be mailed by first-class United States mail, postage prepaid, registered or
certified  with  return  receipt  requested,  (ii)  delivered  in  person to the
intended  addressee,  (iii) sent by telecopy, or (iv) sent by express mail (such
as  Federal  Express  or United States Express Mail).  Notice mailed pursuant to
alternative  (i)  shall  be effective three days after its deposit in the United
States  mail.  Notice  given  in any other manner shall be effective only on the
date  actually received by the addressee.  For purposes of notice, the addresses
of  the  parties  shall  be  as  follows:

To  Assignor:               Penn  Octane  Corporation
                            900  Veterans  Boulevard,  Suite  240
                            Redwood  City,  California  94603
                            Attn:  Jerome  B.  Richter,  President

With  a  copy  to:          Coudert  Brothers
                            1114  Avenue  of  the  Americas
                            New  York,  New  York  10036
                            Attn:  John  F.  Watkins,  Esquire

To  Collateral  Agent:          Castle  Energy  Corporation
                            c/o  CEC,  Inc.
                            One  Radnor  Corporate  Center
                            100  Matsonford  Road,  Suite  250
                            Radnor,  Pennsylvania  19087
                            Attn:  Mr.  Joseph  Castle

With  a  copy  to:          Duane,  Morris  &  Heckscher,  L.L.P.
                            One  Liberty  Place
                            Philadelphia,  Pennsylvania  19103-7396
                            Attn:  Margery  N.  Reed,  Esquire

Each  party  shall  have the right to change its address for notice to any other
location  by  the giving of 10 days' notice to the other party in the manner set
forth  in  this  Paragraph.

     11.     Assignor  may  not  assign, encumber or transfer, voluntarily or by
operation of law, its interest in the Judgment or the Proceeds without the prior
written  consent  of  Collateral  Agent, and any attempt to do so shall be void.

     12.     This Assignment may be executed in any number of counterparts, each
of  which  shall be deemed an original and all of which shall constitute one and
the  same  instrument.

                                        4
<PAGE>
     13.     Assignor hereby acknowledges and agrees that this Assignment may be
recorded  in  accordance with Texas Property Code Section 12.014, and Collateral
Agent  and the Lenders shall be entitled to all of the benefits of such statute.

     IN  WITNESS WHEREOF, this Assignment is executed as of the date first above
mentioned.

                           PENN  OCTANE  CORPORATION
                           (formerly  International  Energy  Development  Corp.)


                           By:
                                Name:   Jerome  B.  Richter
                                Title:  Chairman,  President  and
                                        Chief  Executive  Officer


                           CASTLE  ENERGY  CORPORATION
                           for itself and as Collateral Agent for the Lenders

                           By:
                                Name:   Joseph  Castle
                                Title:  Chairman  and  Chief  Executive  Officer

                                        5
<PAGE>
                                  SCHEDULE  I
                               LIST  OF  LENDERS


     1.     Castle  Energy  Corporation
     2.     Clint  Norton
     3.     Southwest  Concept  Inc.
     4.     James  F.  Meara,  Jr.
     5.     Donaldson  Lufkin  Jenrette  Securities  Corporation  Custodian
            SEP  FBO  James  F.  Meara  IRA
     6.     Lincoln  Trust  Company  FBO  Perry  D.  Snavely  IRA


                                        6
<PAGE>
THE  STATE  OF  TEXAS          :
                               :
COUNTY  OF  DALLAS             :


     This  instrument  was acknowledged before me on November, 1998 by Jerome B.
Richter,  Chairman  of  the Board, President and Chief Executive Officer of Penn
Octane Corporation, Incorporated, a Delaware corporation (formerly International
Energy  Development  Corp.),  on  behalf  of  said  corporation.


                               Notary  Public  in  and  for  the
                               State  of  Texas


My  Commission  Expires:
          ______________


                                        7
<PAGE>
THE  STATE  OF  TEXAS          :
                               :
COUNTY  OF  DALLAS             :


     This  instrument  was  acknowledged  before me on November, 1998, by Joseph
Castle,  Chairman  of  the  Board  and President of Castle Energy Corporation, a
Delaware  corporation,  on  behalf  of  said  corporation.



                               Notary  Public  in  and  for  the
                               Commonwealth  of  Pennsylvania


My  Commission  Expires:
          ______________

                                        8

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