EXHIBIT 10.27




                                   GUARANTY

            This  GUARANTY  (this  "GUARANTY")  is  made  as of this 1st day of
April, 2008, by Southern Texas Oil Company, a Texas corporation,  STO Operating
Company,  a  Texas corporation formerly known as Leexus Operating Company,  STO
Properties LLC,  a Texas limited liability company, and STO Drilling Company, a
Texas corporation,  (each  such  entity,  together  with each other entity that
becomes a party to this Guaranty, is referred to individually  as a "GUARANTOR"
and collectively as the "GUARANTORS") in favor of Viking Asset Management, LLC,
a California limited liability company ("COLLATERAL AGENT"), in its capacity as
collateral  agent  for and successor lienholder to The Longview Fund,  L.P.,  a
California limited partnership  ("Longview")  and Longview Marquis Master Fund,
L.P.,  a  British  Virgin  Islands  limited  partnership  ("Marquis";  Marquis,
together with Longview, are referred to collectively  herein  as the "BUYERS"),
under  each  of  the  Company  Security  Agreement and the Subsidiary  Security
Agreement (each as defined below).

      A.    WHEREAS,  pursuant  to that certain  Loan  Agreement  (as  amended,
restated, supplemented or otherwise  modified  from  time to time and in effect
immediately prior to the effectiveness of the Purchase  Agreement  (as  defined
below),  the  "ORIGINAL LOAN AGREEMENT"), dated January 31, 2007, between South
Texas Oil Company,  a  Nevada  corporation  ("COMPANY"),  and Longview, Company
initially  had  the right to borrow from Longview an aggregate  amount  not  to
exceed $15,000,000,  which obligation was represented by that certain Revolving
Credit Note (as amended, restated, supplemented or otherwise modified from time
to time and in effect  immediately  prior  to the effectiveness of the Purchase
Agreement, the "REVOLVING NOTE"), dated January 31, 2007, issued by the Company
in favor of Longview in connection with the Original Loan Agreement;

      B.    WHEREAS, Company and Longview entered  into  that  certain Security
Agreement (as amended, restated, supplemented or otherwise modified  from  time
to time and in effect immediately prior to the effectiveness of this Agreement,
the  "COMPANY  SECURITY  AGREEMENT"), dated as of January 31, 2007, pursuant to
which the Company granted  to  Longview  a  security interest in the collateral
described  therein, on the terms and conditions  more  specifically  set  forth
therein;

      C.    WHEREAS,  Company  and  Longview  entered  into  that certain First
Amendment to Loan Agreement and Revolving Credit Note (the "FIRST  AMENDMENT"),
dated  as  of  September  25,  2007, pursuant to which (i) Company and Longview
agreed to amend and restate the  Original Loan Agreement and the Revolving Note
to increase the aggregate amount that  Company  was  entitled  to  borrow  from
Longview  (subject to the terms and conditions of the Original Loan Agreement),
and the principal  amount  of  the  Revolving  Note,  to  $30,000,000, and (ii)
Debtors agreed to enter into, as applicable, (a) a guaranty of all obligations,
liabilities and indebtedness of Company under the Original  Loan  Agreement and
the  Revolving  Note  (as amended, restated supplemented or otherwise  modified
from time to time, the  "SUBSIDIARY  GUARANTY"  and  the  guarantees  under the
Subsidiary Guaranty, including any such guarantee added after the date  hereof,
the  "GUARANTEES"),  and  (b)  security  and  pledge  agreements and such other
documents and instruments as were necessary to provide  Secured  Party, for the
benefit  of  itself  and  the  Buyers,  with a valid, perfected, first priority
security interest in substantially all of the assets of Company and each of the
other Debtors;

      D.    WHEREAS, as required by the First  Amendment,  prior  to  the  date
hereof, the Debtors (other than Company) and Longview executed and delivered  a
Security  Agreement  (as  amended, restated, supplemented or otherwise modified
from time to time and in effect  immediately prior to the effectiveness of this
Agreement,  the "SUBSIDIARY SECURITY  AGREEMENT";  together  with  the  Company
Security Agreement,  the "ORIGINAL SECURITY AGREEMENTS"), pursuant to which the
Debtors  (other  than Company)  have  provided  to  Longview  perfected,  first
priority security interests in substantially all of the assets of such Debtors;

      E.    WHEREAS, prior to the date hereof, Marquis acquired an interest in,
and became party to,  the Original Loan Agreement, Original Security Agreements
and certain other related documents;

      F.    WHEREAS,  Company   and   Buyers have  entered  into  that  certain
Securities  Purchase  Agreement  dated as  of  the  date  hereof  (as  amended,
restated, supplemented or otherwise  modified  from time to time, the "PURCHASE
AGREEMENT"), pursuant to which, among other things,  (i) Company and Buyers are
amending  and  restating  in  its  entirety the Original Loan  Agreement,  (ii)
Company is issuing to Buyers the Initial  Notes  (as  defined  in  the Purchase
Agreement)  in  replacement  of,  and  as  an amendment and restatement in  the
entirety of, the Revolving Note, and (iii) Company  may  from  time to time, in
accordance with the terms of the Purchase Agreement, issue Additional Notes (as
defined in the Purchase Agreement) to the Buyers (the Revolving  Note,  Initial
Notes  and  the  Additional  Notes  are  referred to herein collectively as the
"NOTES");

      G.    Pursuant to an Amended and Restated Security Agreement of even date
herewith (as same may be amended, restated,  modified  or  supplemented  and in
effect  from  time  to time, the "SECURITY AGREEMENT") among the Guarantors and
Collateral Agent, the  Guarantors  have  granted  the Collateral Agent, for the
benefit of the Buyers, a first priority security interest  in,  lien  upon  and
pledge  of  each  of their rights in the Collateral (as defined in the Security
Agreement).

      H.    The Guarantors are direct or indirect subsidiaries or affiliates of
Company and, as such,  will  derive  substantial benefit and advantage from the
funds received from the sale of the Notes,  and  it will be to each Guarantor's
direct interest and economic benefit to assist the  Company  in  procuring such
funds.

            NOW,  THEREFORE,  for and in consideration of the premises  and  in
order to induce Buyers to purchase  the  Notes, and for other good and valuable
consideration, the receipt and sufficiency  of  which  are hereby acknowledged,
each Guarantor hereby agrees as follows:

            1. Definitions:  Capitalized terms used herein  without  definition
      and defined in the Purchase Agreement are used herein as defined therein.
      In addition, as used herein:

            "Obligations"  shall  have  the  meaning  set forth in the Security
Agreement.

            "Bankruptcy Code" shall mean the Federal Bankruptcy  Reform  Act of
1978  (11 U.S.C. {section}101, et seq.), as amended and in effect from time  to
time thereunder.

            2. Guaranty of Payment.

                  (a)   Each   Guarantor,   jointly   and   severally,   hereby
      unconditionally  and  irrevocably  guarantees the full and prompt payment
      and performance to Collateral Agent,   for  the  benefit  of Buyers, when
      due, upon demand, at maturity or by reason of acceleration  or  otherwise
      and at all times thereafter, of any and all of the Obligations.

                  (b)   Each Guarantor acknowledges that valuable consideration
      supports  this Guaranty, including, without limitation, the consideration
      set forth in  the  recitals  above,  as  well  as any commitment to lend,
      extension of credit or other financial accommodation,  whether heretofore
      or  hereafter  made  by  Collateral Agent to the Company; any  extension,
      renewal or replacement of  any  of  the Obligations; any forbearance with
      respect to any of the Obligations or  otherwise;  any  cancellation of an
      existing  guaranty; any purchase of any of the Company's  assets  by  any
      Collateral Agent; or any other valuable consideration.

                  (c)   Each  Guarantor  agrees  that  all  payments under this
      Guaranty shall be made in United States currency and in  the  same manner
      as provided for the Obligations.

                  (d)   Notwithstanding any provision of this Guaranty  to  the
      contrary, it is intended that this Guaranty, and any interests, liens and
      security  interests  granted by Guarantors as security for this Guaranty,
      not constitute a "Fraudulent  Conveyance" (as defined below) in the event
      that this Guaranty or such interest  is subject to the Bankruptcy Code or
      any  applicable  fraudulent  conveyance or  fraudulent  transfer  law  or
      similar law of any state.  Consequently,  Guarantors and Collateral Agent
      agree  that if this Guaranty, or any such interests,  liens  or  security
      interests  securing this Guaranty, would, but for the application of this
      sentence, constitute a Fraudulent Conveyance, this Guaranty and each such
      lien and security  interest  shall  be  valid and enforceable only to the
      maximum extent that would not cause this  Guaranty or such interest, lien
      or  security  interest to constitute a Fraudulent  Conveyance,  and  this
      Guaranty shall  automatically  be deemed to have been amended accordingly
      at  all  relevant times.  For purposes  hereof,  "FRAUDULENT  CONVEYANCE"
      means a fraudulent conveyance under Section 548 of the Bankruptcy Code or
      a fraudulent  conveyance  or  fraudulent transfer under the provisions of
      any  applicable  fraudulent conveyance  or  fraudulent  transfer  law  or
      similar law of any state, as in effect from time to time.

            3. Costs and Expenses.

            Each Guarantor, jointly and severally, agrees to pay on demand, all
costs and expenses of every  kind  incurred  by  the  Collateral Agent:  (a) in
enforcing  this  Guaranty,  (b) in collecting any of the Obligations  from  the
Company or any Guarantor, (c)  in  realizing  upon or protecting any collateral
for  this  Guaranty  or  for  payment of any of the  Obligations,  and  (d)  in
connection  with  any amendment of,  modification  to,  waiver  or  forbearance
granted under, or enforcement  or administration of any Transaction Document or
for any other purpose in connection with any Transaction Document to the extent
Company or any Guarantor has an  obligation  to  reimburse the Collateral Agent
for same pursuant to the terms thereof.  The term  "COSTS AND EXPENSES" as used
in  the  preceding  sentence  shall  include,  without  limitation,  reasonable
attorneys'  fees  incurred  by  any Collateral Agent in retaining  counsel  for
advice, suit, appeal, any insolvency  or other proceedings under the Bankruptcy
Code or otherwise, or for any purpose specified in the preceding sentence.

            4. Nature of Guaranty: Continuing, Absolute and Unconditional.

                  (a)   This Guaranty is  and  is  intended  to be a continuing
      guaranty of payment of the Obligations, and not of collectibility, and is
      and  is  intended  to  be  independent  of and in addition to  any  other
      guaranty, indorsement, collateral or other  agreement  held by Collateral
      Agent  therefor  or with respect thereto, whether or not furnished  by  a
      Guarantor.   Collateral   Agent   shall  not  be  required  to  prosecute
      collection,  enforcement or other remedies  against  Company,  any  other
      Guarantor or guarantor  of the Obligations or any other person or entity,
      or to enforce or resort to  any  of  the  Collateral  or  other rights or
      remedies pertaining thereto, before calling on a Guarantor  for  payment.
      The  obligations  of  each  Guarantor  to repay the Obligations hereunder
      shall  be  unconditional.   Each  Guarantor   shall   have  no  right  of
      subrogation with respect to any payments made by any Guarantor  hereunder
      until  the  termination  of  this  Guaranty in accordance with Section  8
      below, and hereby waives any benefit of, and any right to participate in,
      any security or collateral given to Collateral Agent to secure payment of
      the Obligations, and each Guarantor  agrees  that  it  will  not take any
      action  to enforce any obligations of the Company to any Guarantor  prior
      to the Obligations  being  finally  and irrevocably paid in full in cash,
      provided  that,  in  the event of the bankruptcy  or  insolvency  of  the
      Company,  Collateral  Agent   shall   be   entitled  notwithstanding  the
      foregoing, to file in the name of any Guarantor  or  in  its  own  name a
      claim  for  any  and all indebtedness owing to a Guarantor by the Company
      (exclusive of this  Guaranty),  vote such claim and to apply the proceeds
      of any such claim to the Obligations.

                  (b)   For  the  further  security  of  Collateral  Agent  and
      without in any way diminishing the liability of the Guarantors, following
      the occurrence of an Event of Default, all debts and liabilities, present
      or future of the Company to the  Guarantors  and all monies received from
      the Company or for its account by the Guarantors in respect thereof shall
      be  received  in trust for Collateral Agent and  forthwith  upon  receipt
      shall be paid over  to Collateral Agent until all of the Obligations have
      been  paid  in  full  in  cash.   This  assignment  and  postponement  is
      independent of and severable  from this Guaranty and shall remain in full
      effect whether or not any Guarantor  is  liable for any amount under this
      Guaranty.

                  (c)   This Guaranty is absolute  and  unconditional and shall
      not be changed or affected by any representation, oral  agreement, act or
      thing whatsoever, except as herein provided. This Guaranty is intended by
      the Guarantors to be the final, complete and exclusive expression  of the
      guaranty  agreement  between  the  Guarantors  and  Collateral Agent.  No
      modification  or  amendment  of any provision of this Guaranty  shall  be
      effective against any party hereto unless in writing and signed by a duly
      authorized officer of such party.

                  (d)   Each Guarantor  hereby  releases  the Company from all,
      and  agrees  not  to  assert  or  enforce (whether by or in  a  legal  or
      equitable proceeding or otherwise)  any  "claims"  (as defined in Section
      101(5) of the Bankruptcy Code), whether arising under any law, ordinance,
      rule, regulation, order, policy or other requirement  of  any domestic or
      foreign  government  or  any  instrumentality  or agency thereof,  having
      jurisdiction over the conduct of its business or  assets or otherwise, to
      which the Guarantors are or would at any time be entitled  by  virtue  of
      its  obligations  hereunder,  any  payment  made  pursuant  hereto or the
      exercise   by  Collateral  Agent  of  its  rights  with  respect  to  the
      Collateral,  including  any  such  claims to which such Guarantors may be
      entitled  as  a  result  of  any  right of  subrogation,  exoneration  or
      reimbursement.

            5. Certain Rights and Obligations.

                  (a)   Each Guarantor acknowledges  and agrees that Collateral
      Agent may, without notice, demand or any reservation  of  rights  against
      such   Guarantor  and  without  affecting  such  Guarantor's  obligations
      hereunder, from time to time:

                        (i)   renew,  extend, increase, accelerate or otherwise
     change the time for payment of, the  terms  of  or  the  interest  on  the
     Obligations  or any part thereof or grant other indulgences to the Company
     or others;

                        (ii)  accept   from  any  person  or  entity  and  hold
     collateral for the payment of the Obligations  or  any  part  thereof, and
     modify,   exchange,   enforce  or  refrain  from  enforcing,  or  release,
     compromise, settle, waive,  subordinate  or  surrender,  with  or  without
     consideration, such collateral or any part thereof;

                        (iii) accept  and  hold any indorsement or guaranty  of
     payment of the Obligations or any part  thereof, and discharge, release or
     substitute  any  such obligation of any such  indorser  or  guarantor,  or
     discharge, release  or  compromise  any  Guarantor, or any other person or
     entity who has given any security interest  in  any collateral as security
     for  the  payment  of the Obligations or any part thereof,  or  any  other
     person or entity in  any  way obligated to pay the Obligations or any part
     thereof, and enforce or refrain  from  enforcing, or compromise or modify,
     the terms of any obligation of any such  indorser, guarantor, or person or
     entity;

                        (iv)  dispose of any and  all  collateral  securing the
     Obligations in its sole discretion, as it may deem appropriate, and direct
     the order or manner of such disposition and the enforcement of any and all
     endorsements  and  guaranties  relating  to  the  Obligations or any  part
     thereof as it in its sole discretion may determine;

                        (v)   determine  the  manner,  amount   and   time   of
     application of payments and credits, if any, to be made on all or any part
     of  any  component  or  components  of the Obligations (whether principal,
     interest, fees, costs, and expenses,  or  otherwise),  including,  without
     limitation,  the  application of payments received from any source to  the
     payment of indebtedness  other than the Obligations even though Collateral
     Agent  might  lawfully  have   elected  to  apply  such  payments  to  the
     Obligations to amounts which are not covered by this Guaranty; and

                        (vi)  take advantage  or  refrain from taking advantage
     of any security or accept or make or refrain from  accepting or making any
     compositions or arrangements when and in such manner  as  it,  in its sole
     discretion, may deem appropriate;

and  generally do or refrain from doing any act or thing which might otherwise,
at law  or in equity, release the liability of such Guarantor as a guarantor or
surety in  whole  or  in  part,  and  in  no  case  shall  Collateral  Agent be
responsible, nor shall any Guarantor be released either in whole or in part for
any  act  or omission in connection with the sale of any security at less  than
its face or fair market value by Collateral Agent.

                  (b)   Following  the  occurrence  of an Event of Default, and
      upon demand by Collateral Agent, each Guarantor,  jointly  and severally,
      hereby agrees to pay the Obligations to the extent hereinafter provided:

                        (i)   without   deduction  by  reason  of  any  setoff,
     defense (other than payment) or counterclaim  of  the Company or any other
     Guarantor;

                        (ii)  without requiring presentment,  protest or notice
     of nonpayment or notice of default to any Guarantor, to the  Company or to
     any other person or entity;

                        (iii) without  demand  for  payment  or  proof of  such
     demand  or  filing  of  claims  with a court in the event of receivership,
     bankruptcy or reorganization of the Company or any other Guarantor;

                        (iv)  without  requiring  Collateral  Agent  to  resort
     first  to  the  Company  (this  being  a  guaranty  of  payment and not of
     collection),  to  any  other  Guarantor, or to any other guaranty  or  any
     collateral which Collateral Agent may hold;

                        (v)   without  requiring notice of acceptance hereof or
     assent hereto by Collateral Agent; and

                        (vi)  without  requiring   notice   that   any  of  the
     Obligations has been incurred, extended or continued or of the reliance by
     Collateral Agent upon this Guaranty;

all of which each Guarantor hereby waives.

                  (c)   Each  Guarantor's  obligation  hereunder shall  not  be
      affected  by  any  of the following, all of which such  Guarantor  hereby
      waives:

                        (i)   any failure to perfect or continue the perfection
     of any security interest  in  or  other  lien  on  any collateral securing
     payment of any of the Obligations or any Guarantor's obligation hereunder;

                        (ii)  the  invalidity, unenforceability,  propriety  of
     manner of enforcement of, or loss or change in priority of any document or
     any such security interest or other lien or guaranty of the Obligations;

                        (iii) any failure to protect, preserve or insure any
     such collateral;

                        (iv)  failure  of  a Guarantor to receive notice of any
     intended disposition of such collateral;

                        (v)   any defense arising  by  reason  of the cessation
     from  any cause whatsoever of liability of the Company including,  without
     limitation,  any  failure,  negligence  or omission by Collateral Agent in
     enforcing its claims against the Company;

                        (vi)  any  release, settlement  or  compromise  of  any
     obligation of the Company, any  other  Guarantor or any other guarantor of
     the Obligations;

                        (vii) the invalidity  or unenforceability of any of the
     Obligations;

                        (viii)any change of ownership of the Company, any other
     Guarantor  or any other guarantor of the Obligations  or  the  insolvency,
     bankruptcy or  any  other  change  in the legal status of the Company, any
     other Guarantor or any other guarantor of the Obligations;

                        (ix)  any change  in,  or  the  imposition of, any law,
     decree, regulation or other governmental act which does  or  might impair,
     delay  or  in  any way affect the validity, enforceability or the  payment
     when due of the Obligations;

                        (x)   the  existence  of  any  claim,  setoff  or other
     rights  which the Guarantor, Company, any other Guarantor or guarantor  of
     the Obligations or any other person or entity may have at any time against
     Collateral  Agent  or  the Company in connection herewith or any unrelated
     transaction;

                        (xi)  Collateral Agent's election, in any case
     instituted under chapter 11 of the Bankruptcy Code, of the application of
     section 1111(b)(2) of the Bankruptcy Code;

                        (xii) any  use  of  cash  collateral,  or  grant  of  a
     security  interest by the Company, as debtor in possession, under sections
     363 or 364 of the Bankruptcy Code;

                        (xiii)the  disallowance of all or any portion of any of
     Collateral Agent's claims for repayment  of the Obligations under sections
     502 or 506 of the Bankruptcy Code; or

                        (xiv) any  other  fact  or   circumstance  which  might
     otherwise constitute grounds at law or equity for the discharge or release
     of a Guarantor from its obligations hereunder, all  whether  or  not  such
     Guarantor  shall  have  had  notice  or  knowledge  of any act or omission
     referred to in the foregoing clauses (i) through (xiii) of this subsection
     5(c).

            6. Representations and Warranties.

            Each Guarantor further represents and warrants  to Collateral Agent
that:  (a)  such  Guarantor  is  a corporation or other entity duly  organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation or formation, as applicable,  and  has  full power, authority and
legal  right  to own its property and assets and to transact  the  business  in
which it is engaged;  (b)  such  Guarantor  has full power, authority and legal
right  to  execute  and deliver, and to perform  its  obligations  under,  this
Guaranty,  and has taken  all  necessary  action  to  authorize  the  guarantee
hereunder on  the  terms  and  conditions of this Guaranty and to authorize the
execution, delivery and performance  of  this  Guaranty;  (c) this Guaranty has
been  duly  executed and delivered by such Guarantor and constitutes  a  legal,
valid  and binding  obligation  of  such  Guarantor  enforceable  against  such
Guarantor  in  accordance  with  its  terms,  except  to  the  extent that such
enforceability is subject to applicable bankruptcy, insolvency, reorganization,
fraudulent conveyance and moratorium laws and other laws of general application
affecting  enforcement  of creditors' rights generally, or the availability  of
equitable remedies, all of  which  are  subject  to the discretion of the court
before which an action may be brought; and (d) none  of the execution, delivery
and performance by each Guarantor of this Guaranty require  any action by or in
respect  of,  or  filing with, any governmental body, agency or  official,  nor
violate, conflict with  or  cause  a breach or a default under any provision of
applicable  law  or  regulation  or  of the  organizational  documents  of  any
Guarantor,  of any agreement, judgment,  injunction,  order,  decree  or  other
instrument binding upon each Guarantor of this Guaranty.

            7. Negative Covenants.

            Each  Guarantor covenants with Collateral Agent that such Guarantor
shall  not grant any  security  interest  in  or  permit  any  lien,  claim  or
encumbrance  upon any of its assets in favor of any person or entity other than
liens and security  interests  in favor of Collateral Agent and liens permitted
to exist under the Purchase Agreement.  Each Guarantor agrees that it shall not
take any action or engage in any  transaction  that  Company is prohibited from
taking  or  engaging  in pursuant to the terms of the Purchase  Agreement.   In
addition, each Guarantor  agrees to comply with the terms of Sections 5.5, 5.6,
5.7, 5.8, 5.9, 5.10, 5.12,  5.13 and VIII of the Purchase Agreement to the same
extent that Company is required  to  comply  with such Sections of the Purchase
Agreement.  Company, by its signature hereto,  hereby  acknowledges  and agrees
that any breach by a Guarantor of any term or provision of this Guaranty or the
Security  Agreement  shall  constitute an "Event of Default" under the Purchase
Agreement.

            8. Termination.

            This Guaranty shall  remain  in  full force and effect until all of
the Obligations shall be finally and irrevocably  paid  in full in cash and any
and all commitments to lend under the Purchase Agreement shall have terminated.
Thereafter,  but  subject to the following, Collateral Agent  shall  take  such
action and execute  such  documents  as  the Guarantors may request (and at the
Guarantors' cost and expense) in order to  evidence  the  termination  of  this
Guaranty.   Payment  of  all  of  the  Obligations  from time to time shall not
operate  as a discontinuance of this Guaranty.  Each Guarantor  further  agrees
that, to the  extent that the Company makes a payment or payments to Collateral
Agent  on  the Obligations,  or  Collateral  Agent  receives  any  proceeds  of
collateral securing  the  Obligations or any other payments with respect to the
Obligations, which payment  or  receipt  of  proceeds  or  any  part thereof is
subsequently invalidated, declared to be fraudulent or preferential,  set aside
or  required  to  be  returned  or  repaid to the Company, its estate, trustee,
receiver,  debtor  in possession or any  other  person  or  entity,  including,
without limitation,  the  Guarantors,  under  any insolvency or bankruptcy law,
state or federal law, common law or equitable cause, then to the extent of such
payment, return or repayment, the obligation or  part  thereof  which  has been
paid, reduced or satisfied by such amount shall be reinstated and continued  in
full  force  and  effect as of the date when such initial payment, reduction or
satisfaction  occurred,   and  this  Guaranty  shall  continue  in  full  force
notwithstanding any contrary  action  which  may  have been taken by Collateral
Agent  in  reliance upon such payment, and any such contrary  action  so  taken
shall be without prejudice to Collateral Agent's rights under this Guaranty and
shall be deemed  to have been conditioned upon such payment having become final
and irrevocable.

            9. Guaranty of Performance.

            Each Guarantor  also  guaranties the full, prompt and unconditional
performance of all obligations and  agreements  of every kind owed or hereafter
to be owed by the Company to Collateral Agent under the Purchase Agreement, the
Notes and the other Transaction Documents.  Every  provision for the benefit of
Collateral  Agent contained in this Guaranty shall apply  to  the  guaranty  of
performance given in this paragraph.

            10.Assumption of Liens and Obligations.

            To  the  extent  that  a  Guarantor has received or shall hereafter
receive distributions or transfers from  the  Company  of property or cash that
are subject, at the time of such contribution, to liens  and security interests
in  favor  of  Collateral  Agent  in  accordance with the Notes,  the  Security
Agreement entered into by Company in favor  of  Collateral  Agent  or any other
Transaction Document, such Guarantor hereby expressly agrees that (i)  it shall
hold  such  assets  subject  to such liens and security interests, and (ii)  it
shall be liable for the payment  of  the  Obligations  secured  thereby.   Each
Guarantor's  obligations  under  this  Section  10  shall be in addition to its
obligations  as  set  forth  in  other  sections of this Guaranty  and  not  in
substitution therefor or in lieu thereof.

            11.Miscellaneous.

                  (a)   The terms "Company"  and  "Guarantor"  as  used in this
      Guaranty  shall  include:  (i)  any  successor individual or individuals,
      association, partnership, limited liability  company  or  corporation  to
      which  all  or substantially all of the business or assets of the Company
      or  such Guarantor  shall  have  been  transferred  and  (ii)  any  other
      association,  partnership,  limited  liability  company,  corporation  or
      entity  into  or with which the Company or such Guarantor shall have been
      merged, consolidated, reorganized, or absorbed.

                  (b)   Without  limiting  any other right of Collateral Agent,
      whenever Collateral Agent has the right to declare any of the Obligations
      to  be  immediately  due and payable (whether  or  not  it  has  been  so
      declared), Collateral  Agent, at its sole election, and without notice to
      the undersigned may appropriate and set off against the Obligations:

                        (i)   any  and  all indebtedness or other moneys due or
     to become due to any Guarantor by any  Collateral  Agent  in any capacity;
     and

                        (ii)  any  credits or other property belonging  to  any
     Guarantor (including all account  balances,  whether  provisional or final
     and whether or not collected or available) at any time  held  by or coming
     into  the  possession  of Collateral Agent, or any affiliate of Collateral
     Agent, whether held for deposit or otherwise;

whether or not the Obligations  or  the  obligation  to pay such moneys owed by
Collateral Agent is then due, and the Collateral Agent  shall be deemed to have
exercised such right of set off immediately at the time of  such  election even
though  any  charge  therefor is made or entered on Collateral Agent's  records
subsequent thereto.  Collateral  Agent  agrees  to  notify  such Guarantor in a
reasonably practicable time of any such set-off; however, failure  to so notify
such Guarantor shall not affect the validity of any set-off.

                  (c)   Each  Guarantor's  obligation hereunder is to  pay  the
      Obligations  in  full  in  cash  when due according  to  the  Notes,  the
      Transaction Documents, this Guaranty  and the other agreements, documents
      and instruments governing the Obligations  to the extent provided herein,
      and shall not be affected by any stay or extension of time for payment by
      the Company or any other Guarantor resulting  from  any  proceeding under
      the Bankruptcy Code or any similar law.

                  (d)   No  course  of  dealing  between  the  Company  or  any
      Guarantor  and  Collateral  Agent  and  no  act,  delay  or  omission  by
      Collateral  Agent  in  exercising  any right or remedy hereunder or  with
      respect to any of the Obligations shall operate as a waiver thereof or of
      any  other right or remedy, and no single  or  partial  exercise  thereof
      shall  preclude  any other or further exercise thereof or the exercise of
      any other right or  remedy.   The Collateral Agent may remedy any default
      by the Company under any agreement  with  the  Company or with respect to
      any  of  the  Obligations in any reasonable manner  without  waiving  the
      default remedied  and  without  waiving  any  other  prior  or subsequent
      default  by  the  Company.   All rights and remedies of Collateral  Agent
      hereunder are cumulative.

                  (e)   This Guaranty  shall inure to the benefit of Collateral
      Agent and each such entity's successors and assigns.

                  (f)   Collateral  Agent   may  assign  its  rights  hereunder
      without the consent of Guarantors, in which  event such assignee shall be
      deemed  to be Collateral Agent hereunder with respect  to  such  assigned
      rights.

                  (g)   Captions  of  the  sections of this Guaranty are solely
      for the convenience of the parties hereto,  are  not  intended  to be nor
      should  be  construed to be an aid in the interpretation of this Guaranty
      and do not constitute  part  of  the  agreement  of the parties set forth
      herein.

                  (h)   If any provision of this Guaranty  is  unenforceable in
      whole or in part for any reason, the remaining provisions  shall continue
      to be effective.

                  (i)   Each  Guarantor  hereby  irrevocably  submits   to  the
      exclusive  jurisdiction  of  the  state and federal courts sitting in the
      City  of New York, Borough of Manhattan,  for  the  adjudication  of  any
      dispute  hereunder  or  in  connection  herewith  or with any transaction
      contemplated  hereby  or  discussed  herein,  and  each Guarantor  hereby
      irrevocably  waives,  and  agrees not to assert in any  suit,  action  or
      proceeding,  any  claim  that  it   is  not  personally  subject  to  the
      jurisdiction of any such court, that  such  suit, action or proceeding is
      brought in an inconvenient forum or that the  venue  of such suit, action
      or  proceeding  is  improper.   Each Guarantor hereby irrevocably  waives
      personal service of process and consents  to  process being served in any
      such suit, action or proceeding by mailing a copy  thereof  to such party
      at  the  address  for  such  notices to it under this Agreement and  each
      Guarantor agrees that such service  shall  constitute good and sufficient
      service of process and notice thereof.  Nothing contained herein shall be
      deemed  to  limit in any way any right to serve  process  in  any  manner
      permitted by law.

                  (j)   Notices.  All notices, approvals, requests, demands and
      other communications  hereunder  shall be delivered or made in the manner
      set forth in, and shall be effective in accordance with the terms of, the
      Purchase Agreement; provided, however,  that  any  communication shall be
      effective  as  to  any  Guarantor  if  made  or  sent to the  Company  in
      accordance with the foregoing.

            12.WAIVERS.

                  (a)   EACH  GUARANTOR WAIVES THE BENEFIT  OF  ALL  VALUATION,
      APPRAISAL AND EXEMPTION LAWS.

                  (b)   UPON THE  OCCURRENCE  OF A DEFAULT OR EVENT OF DEFAULT,
      EACH GUARANTOR HEREBY WAIVES ALL RIGHTS TO NOTICE AND HEARING OF ANY KIND
      PRIOR TO THE EXERCISE BY LENDER OF ITS RIGHTS TO REPOSSESS THE COLLATERAL
      WITHOUT  JUDICIAL  PROCESS  OR  TO  REPLEVY,  ATTACH  OR  LEVY  UPON  THE
      COLLATERAL WITHOUT PRIOR NOTICE OR HEARING.  EACH  GUARANTOR ACKNOWLEDGES
      THAT IT HAS BEEN ADVISED BY COUNSEL OF ITS CHOICE WITH  RESPECT  TO  THIS
      TRANSACTION AND THIS GUARANTY.

                  (c)   EACH GUARANTOR WAIVES ITS RIGHTS TO A TRIAL BY JURY  OF
      ANY  CLAIM  OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO
      THIS GUARANTY,  OR  THE  TRANSACTIONS CONTEMPLATED HEREBY, IN ANY ACTION,
      PROCEEDING OR OTHER LITIGATION  OF  ANY  TYPE  BROUGHT  BY  LENDER.  EACH
      GUARANTOR AGREES THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY
      A  COURT  TRIAL  WITHOUT  A  JURY.  WITHOUT LIMITING THE FOREGOING,  EACH
      GUARANTOR FURTHER AGREES THAT  ITS  RIGHT TO A TRIAL BY JURY IS WAIVED BY
      OPERATION  OF  THIS  SECTION  AS  TO ANY ACTION,  COUNTERCLAIM  OR  OTHER
      PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR
      ENFORCEABILITY OF THIS GUARANTY OR  ANY  PROVISION  HEREOF.   THIS WAIVER
      SHALL  APPLY  TO  ANY  SUBSEQUENT  AMENDMENTS,  RENEWALS, SUPPLEMENTS  OR
      MODIFICATIONS TO THIS GUARANTY.

            13.Counterparts; Headings.  This Agreement  may  be executed in two
      or more identical counterparts, all of which shall be considered  one and
      the same agreement and shall become effective when counterparts have been
      signed  by each party and delivered to each other party; provided that  a
      facsimile  signature  shall  be  considered  due  execution  and shall be
      binding upon the signatory thereto with the same force and effect  as  if
      the  signature  were an original, not a facsimile signature. The headings
      in this Agreement  are  for  convenience  of reference only and shall not
      alter or otherwise affect the meaning hereof.

              [rest of page intentionally left blank; signature page follows]










60632113

<PAGE>






            IN WITNESS WHEREOF, Guarantors have executed  this  Guaranty  as of
the date first written above.

                                    SOUTHERN TEXAS OIL COMPANY, a Texas
                                    corporation

                                    By:_______________________________
                                    Name:  ____________________________
                                    Title: ____________________________


                                    STO OPERATING COMPANY, a Texas corporation

                                    By:_______________________________
                                    Name:  ____________________________
                                    Title: ____________________________


                                    STO PROPERTIES LLC,
                                    a Texas limited liability company

                                    By:_______________________________
                                    Name:  ____________________________
                                    Title: ____________________________


                                    STO DRILLING COMPANY,
                                    a Texas corporation

                                    By:_______________________________
                                    Name:  ____________________________
                                    Title: ____________________________

Acknowledged and Agreed to
For Purposes of Section 7 hereof:

SOUTH TEXAS OIL COMPANY,
a Nevada corporation

By:_______________________________
Name: ____________________________
Title:____________________________






Guaranty

60632113

<PAGE>




                                                                      EXHIBIT A

                                FORM OF JOINDER
                        JOINDER TO SUBSIDIARY GUARANTY

      The  undersigned,  [__________]  a  [__________],  hereby  joins  in  the
execution  of that certain Guaranty dated as of April 1, 2008 (the "GUARANTY"),
by Southern  Texas  Oil  Company, a Texas corporation, STO Operating Company, a
Texas corporation formerly  known  as  Leexus Operating Company, STO Properties
LLC,  a  Texas  limited  liability  company,  STO  Drilling  Company,  a  Texas
corporation,  and  each  other  person  or  entity  that  becomes  a  Guarantor
thereunder after the date and pursuant to the terms thereof, to and in favor of
Longview  Fund, L.P., as Collateral Agent.   By  executing  this  Joinder,  the
undersigned hereby agrees that it is a Guarantor thereunder with the same force
and effect  as  if  originally  named  therein as a Guarantor.  The undersigned
agrees  to be bound by all of the terms and  provisions  of  the  Guaranty  and
represents  and  warrants  that the representations and warranties set forth in
Section 6 of the Guaranty are,  with  respect  to  the  undersigned,  true  and
correct  as  of the date hereof.  Each reference to a Guarantor in the Guaranty
shall be deemed to include the undersigned.

      In Witness  Whereof,  the  undersigned has executed this Joinder this ___
day of _________, 200_.

                                           ___________________________



Guaranty

60632113