EXHIBIT 10.32


      NOTICE  OF  CONFIDENTIALITY  RIGHTS: IF YOU ARE A NATURAL PERSON, YOU MAY
REMOVE OR STRIKE ANY OF THE FOLLOWING  INFORMATION  FROM THIS INSTRUMENT BEFORE
IT IS FILED FOR RECORD IN THE PUBLIC RECORDS: YOUR SOCIAL  SECURITY  NUMBER  OR
YOUR DRIVER'S LICENSE NUMBER.


                   CONVEYANCE OF OVERRIDING ROYALTY INTEREST


    For  a  good  and  valuable  consideration,  the receipt of which is hereby
acknowledged,  STO  Operating Company, a Texas corporation,  with  headquarters
located at 769 Highway  95N,  Bastrop,  TX 78602 ("Grantor") does hereby grant,
bargain,  sell,  transfer,  assign  and  convey  to  The  Longview  Fund,  L.P.
("Grantee"), a California limited partnership,  whose  address  is  c/o  Viking
Asset  Management,  LLC,  600  Montgomery Street, 44th Floor, San Francisco, CA
94111,  Attention:  Michael  Rudolph,   an  overriding  royalty  interest  (the
"Overriding  Royalty")  equal to 2.25% of the  Applicable  Percentage  (defined
below) of the oil, gas and  other  minerals  in, under and that may be produced
from the lands (a) described in Exhibit "A" attached  hereto  and  made  a part
hereof  or (b) covered by the oil and gas leases described in such Exhibit  "A"
(collectively  the  "Subject Lands"), commencing at the Effective Time (defined
below) and at all times  thereafter.   As  used  herein, the terms (i) "Subject
Leases"  refers  to  the  oil and gas leases described  in  Exhibit  "A",  (ii)
"Working Interest" and "WI"  mean the cost bearing percentage interest that the
owner thereof must bear relative  to 100% of all costs to explore, develop, and
produce oil and/or gas from the applicable  portion  of  the Subject Lands, and
(iii)  "Applicable  Percentage"  shall mean, with respect to  each  portion  of
Subject Lands identified on Exhibit  "A",  the  percentage  set  forth  on such
Exhibit  "A"  as the "Working Interest," as the same may be increased, but  not
decreased, from  time  to  time in an amount equal to any increase in Grantor's
Working Interest in such Subject Lands, whether by purchase or otherwise.

    It is understood and agreed  that though the Overriding Royalty is conveyed
by Grantor to Grantee out of Grantor's  interest (such interest, subject to the
Overriding Royalty, being herein called the "Burdened Interest") in the Subject
Leases insofar as they cover Subject Lands,  such  Overriding  Royalty shall be
equal to 2.25% of the Applicable Percentage of the oil, gas and  other minerals
in,  under and that may be produced from the Subject Lands, commencing  at  the
Effective  Time  and  at all times thereafter, and shall not be reduced for any
reason, including, without  limitation,  the  same  shall not be reduced if the
undivided  interest  of  Grantor  in a Subject Lease is less  than  the  entire
interest in such Subject Lease (or is less than the interest, if any, stated on
Exhibit "A" with respect to such Subject  Lease) or if the interest in oil, gas
and other minerals underlying any portion of the Subject Lands which is covered
by a particular Subject Lease (or group of  Subject  Leases)  is  less than the
entire interest in the oil, gas and other minerals underlying such  portion  of
the  Subject  Lands,  or if the share of production from any portion of Subject
Lands to which Grantor  is  entitled by virtue of its ownership interest in the
Subject Leases is less than the  Applicable Percentage set forth on Exhibit "A"
for such portion of the Subject Lands.

    TO HAVE AND TO HOLD the Overriding Royalty unto Grantee, its successors and
assigns forever.  The Overriding Royalty  herein  conveyed,  and  the  Burdened
Interest of Grantor, shall be subject to the following provisions:

    1.  Grantor  shall  have the obligation to market, or cause to be marketed,
the  oil,  gas  and  other  minerals   produced  from  the  Subject  Lands  and
attributable to the Overriding Royalty (the  "ORRI  Hydrocarbons") on behalf of
and  for  the  account of Grantee in arm's-length transactions  with  reputable
purchasers in accordance with prudent business judgment, with each such sale to
be: (i) upon terms  and  conditions  which  are  the  best terms and conditions
reasonably available taking into account all relevant circumstances,  including
without  limitation,  price,  quality of production, access to markets or  lack
thereof, minimum purchase guarantees,  identify  of  purchaser  and  length  of
commitment, (ii) upon terms and conditions at least as favorable as (a) Grantor
obtains  for  the  share  of oil, gas and/or other minerals attributable to the
Burdened Interest in the Subject  Lands to which such sale relates, (b) Grantor
obtains for its interest in other oil,  gas  and/or other minerals which are of
comparable type and quality and which are produced  in  the  same  area  as the
Subject  Lands  to  which  such  sale  relates,  and  (c) those obtained by any
Affiliates  (below  defined)  of  Grantor  for oil, gas and/or  other  minerals
produced from the Subject Lands to which such sale relates or from lands in the
same area, and (iii) made to a party who is  not  an  Affiliate of Grantor.  As
used  herein,  "Affiliate" shall mean, with respect to any  person  or  entity,
another person or  entity  that,  directly  or  indirectly,  (a)  has an equity
interest in that person or entity, (b) has a common ownership with  that person
or entity, (c) controls that person or entity, (d) is controlled by that person
or  entity  or (e) shares common control with that person or entity.  "Control"
or "controls"  for purposes hereof means that a person or entity has the power,
direct or indirect,  to  conduct  or  govern  the policies of another person or
entity.  Grantor shall duly perform all obligations  performable  by  it  under
production  sales  contracts  under  which ORRI Hydrocarbons are sold and shall
take  all  appropriate measures to enforce  the  performance  under  each  such
production sales contract of the obligations of the other parties thereto.

    2.  Grantor  does  hereby represent and warrant to Grantee (i) that Grantor
owns the interests specified in Exhibit "A" hereto in and to the Subject Leases
(and Grantor has good and marketable title to such interests, free of liens and
encumbrances,  except  liens   and   encumbrances  in  favor  of  Viking  Asset
Management, LLC on its own behalf and  in  its  capacity  as collateral agent),
(ii)  that  Grantor  has  good  right  and  authority  to sell and  convey  the
Overriding Royalty, (iii) that this Conveyance of Overriding  Royalty  Interest
("this  Conveyance")  vests  in  Grantee  good  and  marketable  title  to  the
Overriding  Royalty  free of liens and encumbrances, and (iv) that Grantor is a
wholly-owned subsidiary  of  South  Texas  Oil  Company,  a  Nevada corporation
("South Texas"), except in each case to the extent not the case  as a result of
a breach of a representation and warranty made by the "Selling Shareholders" in
that  certain agreement, dated as of April 20, 2007, pursuant to which  Grantor
initially acquired an interest in the Subject Leases.  Grantor hereby covenants
and agrees  to  use  its  reasonable best efforts to rectify any defects in its
title to the interests specified  in Exhibit "A" hereto, and otherwise to cause
the foregoing representations and warranties  to  be  true  and  correct in all
respects (without giving effect to the exception set forth in the clause at the
end of the immediately preceding sentence), to the extent reasonably  possible.
Grantor  hereby  binds  itself to warrant and forever defend, all and singular,
title to the Overriding Royalty  unto  Grantee,  its  successors  and  assigns,
against the claims and demands of all persons claiming or to claim the same  or
any  part  thereof.   This  Conveyance  is  made  with  full  substitution  and
subrogation  of  Grantee  in  and  to  all  covenants  and warranties by others
heretofore given or made.

    3.  Grantor shall be obligated to explore, develop,  operate  and  maintain
the  Burdened Interest as would a prudent operator.  As to any portions of  the
Burdened  Interest  as to which Grantor is not the operator, Grantor shall take
all such action and exercise  all  such  rights  and remedies as are reasonably
available  to  it to cause the operator to so explore,  develop,  maintain  and
operate such portions  of  the Burdened Interest.  Grantor shall promptly (and,
unless  the  same  are  being  contested  in  good  faith  and  by  appropriate
proceedings,  before  the same are  delinquent)  pay  all  costs  and  expenses
(including  all taxes and  all  costs,  expenses  and  liabilities  for  labor,
materials and  equipment incurred in connection with the Burdened Interests and
all obligations  to  the  holders  of  royalty  interests  and  other interests
affecting the Subject Leases) incurred in developing, operating and maintaining
the Burdened Interests.

    4.  Grantor  shall  revise  and  supplement Exhibit "A" promptly  upon  any
increase in the Grantor's Working Interest in the Subject Lands, by purchase or
otherwise, that occurs at any time prior  to   the  first date on which Grantor
has repaid in full all of the outstanding Notes, to reflect such increase.  For
purposes of clarification, upon any increase in Grantor's  Working Interests on
the  Subject  Lands that occurs at any time prior to the first  date  on  which
Grantor has repaid in full all of the outstanding Notes, whether or not Exhibit
"A" has been updated  in  accordance  with  this  paragraph 4, such increase in
Working Interests shall become subject to this Overriding Royalty.

    5.  Grantor shall keep full, true, and correct records of the oil, gas, and
other  hydrocarbons produced from or attributable to  the  Subject  Lands  each
calendar  month,  and the portion attributable to the Overriding Royalty.  Such
records may be inspected  by  Grantee  or  its  authorized  representatives and
copies  made  thereof at all reasonable times.  Grantee shall also  have,  upon
request, access  to  review  all  reports, data and information relating to the
Subject Lands or to exploration, development,  production  and other operations
conducted  on  the  Subject Lands. On or before the earlier of  (a)  the  fifth
business day after Grantor's  first  public  disclosure, by issuance of a press
release or filing of a report with the Securities  and  Exchange Commission, of
Grantor's production from the Subject Lands or other results  of operations for
the most recently completed fiscal quarter or fiscal year, or (b)  the last day
on  which  the  Grantor can timely (without giving effect to any extensions  of
time permitted by Rule 12b-25 under the Securities Exchange Act of 1934) file a
quarterly report  on  Form  10-Q  or annual report on Form 10-K, as applicable,
with respect to such fiscal quarter  of  fiscal year, Grantor shall (a) deliver
to  Grantee  a  statement  (a "Production Statement")  setting  forth  (i)  the
production from the Subject  Lands  for  the  most  recently  completed  fiscal
quarter,  (ii)  the  portion  of such production attributable to the Overriding
Royalty, (iii) the gross proceeds  ("ORRI  Collected Proceeds") attributable to
the sale of ORRI Hydrocarbons (and the taxes  and  other  costs permitted to be
deducted therefrom under Section 5 below) during such fiscal  quarter  and (iv)
such other data as  Grantee may reasonably request in such form as Grantee  may
reasonably  request,  and  (b) make a payment to Grantee of such ORRI Collected
Proceeds (less such costs permitted  to  be  deducted therefrom under Section 5
below ) in immediately available funds by wire  transfer  (or  such  other form
specified by Grantee) to such bank or location as Grantee may direct from  time
to time in writing.  No Production Statement delivered to Grantee shall contain
any  information  regarding  the  production from the Subject Lands or reserves
that has not been publicly disclosed  by  Grantor  or  any  other material non-
public information.  If any Production Statement contains, or Grantor otherwise
provides Grantee, any information regarding production from the  Subject  Lands
or  reserves  that  has not been publicly disclosed (or any other material non-
public information),  Grantee shall have the right to make public disclosure of
such information and Grantee  shall  not  have  any liability to Grantor, South
Texas, any of their respective subsidiaries or any  of  its or their respective
officers, directors, employees, shareholders or agents for any such disclosure.
Grantor shall not publicly disclose its results of operations  for  any  fiscal
quarter or fiscal year unless it contemporaneously publicly discloses, or prior
thereto  has publicly disclosed, the production from the Subject Lands for  the
most recently completed fiscal quarter.

    6.  The  Overriding  Royalty  shall  be  free  of  all costs, expenses, and
liabilities, of whatever kind or character, except the Overriding Royalty shall
bear its proportionate share of the costs charged Grantor by a third party (not
an Affiliate of Grantor) for compression, dehydration and  transportation  that
are  incurred  between  the  first point of receipt of production by such third
party  and  the redelivery of such  compressed  and  dehydrated  production  to
Grantor.  Specifically,  but  not  by way of limitation, the Overriding Royalty
shall  never  bear,  either directly or  indirectly,  any  costs,  expenses  or
liabilities  for  building,   constructing,  acquiring,  drilling,  developing,
producing, operating, gathering,  separating, trucking, or transporting (except
as set forth in the first sentence  of  this  Section 5) or any post production
expenses, related or pertaining to the Subject Lands, Subject Leases, or wells,
pipelines, or other facilities or improvements situated on the Subject Lands or
lands pooled therewith, or production of oil and/or  gas from the Subject Lands
or lands pooled therewith; provided, however, the Overriding Royalty shall bear
its proportionate share of (i) the third party costs identified  in  the  first
sentence of this Section 5 and (ii) production, severance and similar taxes.

    7.  Grantor  agrees to execute and deliver, and, to the extent it is within
Grantor's power to do so, to cause any third parties to execute and deliver, to
Grantee all such other  and  additional  instruments and to do all such further
acts and things as may be necessary more fully to vest in and assure to Grantee
all of the rights, titles, interests, remedies,  powers  and  privileges herein
granted or intended so to be.

    8.  Exhibit "A" sets forth those certain portions, if any,  of  the Subject
Lands  that have been pooled or unitized for the production of oil, gas  and/or
minerals  prior to the date hereof.  With respect to each such existing pool or
unit set forth  on  such  Exhibit "A", and with respect to each pool or unit in
which the Overriding Royalty  is  included,  as  below provided, after the date
hereof, the Overriding Royalty in each portion of  Subject  Lands  included  in
such  pool  or  unit shall apply to the portion of production from such pool or
unit which is attributable to such portion of Subject Lands under and by virtue
of the applicable  pooling  and  unitization  agreements,  designations  and/or
orders.  From and after the date hereof, Grantor shall have the right and power
to unitize or pool in good faith on customary terms any portion or portions  of
the  Overriding  Royalty with other lands in which the mineral interest thereof
is owned by a person  or  entity  other than Grantor or an Affiliate of Grantor
and on which is located, or will be  located,  a  well producing, or capable of
producing,  oil  and/or  gas  in  commercially paying quantities  (collectively
"Third Party Lands"); provided, however,  Grantor  shall not have the right and
power to unitize or pool any portion or portions of the Overriding Royalty with
any non Third Party Lands without first obtaining the  prior written consent of
Grantee.  If pursuant to any law, rule, regulation or order of any governmental
body or official, any portion of the Subject Lands is pooled or unitized in any
manner,  or if Grantee has joined in or agreed to any pooling  or  unitization,
the Overriding  Royalty  insofar  as  it  affects such portion of Subject Lands
shall also be pooled and unitized and, in each  event,  the  Overriding Royalty
shall apply to the production which is attributable to such portion  of Subject
Lands under and by virtue of such pooling and unitization arrangements.

    9.  Nothing  herein contained shall in any way limit or restrict the  right
of Grantee to sell,  convey,  assign  or mortgage (or grant a deed of trust on)
the  Overriding  Royalty  (including its rights,  titles,  interests,  estates,
remedies, powers and privileges  appurtenant  or  incident  to  the  Overriding
Royalty under this Conveyance) in whole or in part.  No change of ownership  of
the Overriding Royalty shall be binding upon Grantor until Grantor is furnished
with  copies of the original documents evidencing such change.  Upon receipt by
Grantor  of  copies  of  the  original documents evidencing a sale, conveyance,
assignment or mortgage (or grant of a deed of trust on) the Overriding Royalty,
Grantor shall deal with the purchaser or assignee in place of Grantee and shall
deal with the mortgagee (or the  beneficiary  of the deed of trust) in addition
to the Grantee, and references herein to the Grantee  shall  thereafter also be
deemed  to  be  references  to  such purchaser, assignee or mortgagee  (or  the
beneficiary of the deed of trust).

    10.        If the Grantor proposes or intends to make any sale, transfer or
other disposition of all or any portion  of  its  Burdened  Interest, including
without limitation a proposed or intended sale, transfer or disposition  of its
Burdened  Interest by merger, reorganization, consolidation, or by sale of  all
or substantially  all  of  its  assets  (other  than  a sale, transfer or other
disposition  to  South  Texas,  or  a  directly  or  indirectly,  wholly  owned
subsidiary of South Texas), and such sale, transfer or  other  disposition will
result  in Grantor owning less than a fifty percent (50%) Working  Interest  in
such Burdened  Interest and/or resigning as operator of such Burdened Interest,
Grantor shall so  inform  Grantee  by notice in writing (the "Transfer Notice")
describing the interest (or portion  thereof)  that  is  the  subject  of  such
proposed  or  intended  sale, transfer or disposition (the "Offered Interest"),
and the other pertinent and  reasonable  details  of  such proposed or intended
sale, transfer or disposition.  Grantee shall thereupon  have  thirty (30) days
after receipt of the Transfer Notice to notify Grantor in writing  that Grantee
desires to participate in such sale, transfer or disposition and contribute the
Overriding Royalty, or some portion thereof, as a part of the properties  to be
covered  by  such  sale, transfer or disposition.  Failure of Grantee to notify
Grantor in writing that  Grantee  desires to participate in such sale, transfer
or disposition within such thirty (30)  day  period shall be deemed an election
by Grantee not to participate.  If Grantee does  timely  submit  its  notice to
Grantor (i) the Burdened Interest, or portion thereof that is to be covered  by
such  sale,  transfer or disposition, shall not be sold or disposed of separate
and apart of the  Overriding  Royalty  (or  portion  thereof  as  designated by
Grantee in its notice) and (ii) Grantor and Grantee shall mutually  agree  upon
the  price  or  value  that Grantee shall receive upon conclusion of such sale,
transfer or disposition for the Overriding Royalty (or portion thereof) that is
to be a part of the properties  covered  by such sale, transfer or disposition.
In the event Grantor and Grantee cannot so  mutually agree, Grantor and Grantee
shall retain the services of a petroleum reservoir  engineer experienced in the
valuation of oil and gas properties employed by Miller  &  Lents,  Ltd. (or its
successors in interest) to serve as the sole arbiter of such disagreement  (the
"Arbiter").   In  the event Miller & Lents, Ltd. (or its successor in interest)
is unwilling or incapable  of  having  one of its petroleum reservoir engineers
serve as Arbiter, then Grantor and Grantee  shall  mutually agree on the person
to serve as Arbiter, and in the event Grantor and Grantee  cannot  so  mutually
agree, the selection of the Arbiter shall be made by a federal judge sitting in
the  Southern  District of New York in the borough of Manhattan, New York,  New
York, upon petition  filed  by  either  Grantor or Grantee requesting that such
selection be made.  The decision of the Arbiter  as  to  such  price  or  value
Grantee shall receive shall be delivered by the Arbiter within ten (10) days of
his  retention,  and shall be final as to Grantor and Grantee for all purposes.
The costs of such Arbiter shall be borne equally by Grantor and Grantee.

    11.  Grantor shall  have  the  right  without  the  joinder  of  Grantee to
release,  surrender  and/or abandon its Burdened Interest, or any part thereof,
or interest therein, even  though  the  effect  of  such  release, surrender or
abandonment  will  be to release, surrender or abandon the Overriding  Royalty;
provided, however, that  Grantor  shall  not  release, surrender or abandon any
Burdened Interest unless and until Grantor has  determined  in  good faith that
such  Burdened  Interest  will  no  longer  produce  in paying quantities,  and
provided further that, Grantor will, at least thirty (30)  days  prior  to  the
release,  surrender  or  abandonment  (unless a lesser period of time governing
such  release,  surrender or abandonment  is  provided  for  in  an  applicable
operating agreement  entered into by and between Grantor and a person or entity
that is not an Affiliate  of Grantor, in which case at least the number of days
provided for in such lesser  time period) of any Burdened Interest, or any part
thereof or interest therein, notify  Grantee  (in writing, giving a description
of each Burdened Interest, or part thereof or interest  therein, proposed to be
released,  surrendered  or  abandoned,  and the date upon which  such  release,
surrender  or abandonment is projected to  occur)  and,  if  Grantee  shall  so
request, Grantor shall assign to Grantee the interests proposed to be released,
surrendered  or  abandoned,  together  with  the  interest  attributable to the
Burdened  Interests  in  all  equipment  located thereon or used in  connection
therewith;  provided further that, in the event  of  such  an  assignment  from
Grantor to Grantee,  Grantee  shall  pay  to  Grantor  the salvage value of any
equipment so conveyed by Grantor to Grantee.

    12.   Without prior written notice to Grantee providing  Grantee  with  the
opportunity  to  acquire the affected interest of Grantor at no additional cost
to Grantee other than  assumption  by  Grantee  of  the  obligations of Grantor
pertaining  to  the affected interest, Grantor shall not elect  to  be  a  non-
participating party  (whether  pursuant  to  an  operating  agreement  or other
agreement or arrangement, including without limitation, non-consent rights  and
obligations  imposed  by  statute and/or regulatory agency) with respect to any
drilling, deepening, plugging  back,  reworking, sidetracking or completion (or
other) operation on any Burdened Interest  or  elect  to be an abandoning party
with respect to a well located on any Burdened Interest;  provided, however, if
such  direct  acquisition  by  Grantee  would  be prohibited by the  applicable
operating agreement or other agreement or arrangement  and  Grantee  has timely
notified Grantor that Grantee elects to acquire such affected interest, Grantor
agrees  to  use  its best efforts as are reasonable under the circumstances  to
enter into a mutually  satisfactorily contractual arrangement with Grantee that
would allow Grantee to indirectly  acquire  such affected interest, or have the
same economic consequences of ownership of such  affected  interest, and not be
in  violation  or  breach  of  such  applicable  operating agreement  or  other
agreement or arrangement.  Grantor agrees to provide  such prior written notice
to Grantee as soon as is reasonably possible in order to afford Grantee as much
time  as  reasonably  possible  to  respond.  Such prior written  notice  shall
include  information advising Grantee  of  the  time  period  required  by  the
applicable  operating agreement, other agreement or arrangement for response on
this matter,  and  failure  on  the  part  of  Grantee to notify Grantor of its
election to acquire such affected interest within  such  time  period  shall be
deemed   an  election  by  Grantee  to  not  acquire  such  affected  interest.
Notwithstanding  anything  to  the contrary contained herein, Grantor shall not
elect,  as to any Burdened Interest,  to  be  a  non-participating  party  with
respect to  any  operation contemplated in this Section 11 in the event Grantor
or any Affiliate of  Grantor  will  also  be  a  participating  party  in  such
operation.

     13.   The  Overriding  Royalty shall apply to all renewals, extensions and
other similar arrangements (and/or  interests  therein)  of  the Subject Leases
insofar as they cover Subject Lands.  A new lease taken before  the  expiration
of  the  existing Subject Lease which it replaced or within one (1) year  after
expiration  of  such Subject Lease, and covering the same interest (or any part
thereof) that was  covered  by the Subject Lease, shall be considered a renewal
or extension for the purposes  hereof.   Additionally,  the  Overriding Royalty
shall continue in force and effect and not be extinguished in the event Grantor
acquires the mineral estate covered by a Subject Lease and thereafter  releases
such Subject Lease.

    14.     The agreements and obligations of Grantor in paragraphs 8, 10,  and
12 above shall  not  be  covenants  running with the land and shall be personal
agreements and obligations of Grantor  and  any Affiliate of Grantor that shall
terminate upon a sale, transfer or disposition  of  Grantor's Burdened Interest
to a third party that is not an Affiliate of Grantor.  All  other covenants and
agreements of Grantor herein contained shall be deemed to be  covenants running
with the Burdened Interest.  All of the provisions hereof shall  inure  to  the
benefit of Grantee and its successors and assigns.

    15.   All  communications  required  or  permitted  to  be given under this
Conveyance  shall be in writing and shall be given by registered  or  certified
mail, postage prepaid or telecopy, or by personal service (including express or
courier service),  and addressed to the addresses specified at the beginning of
this Conveyance (or  to  such  other  address  or  telecopy  number  as  may be
designated  in  writing in accordance herewith).  Notices shall be deemed given
upon receipt.

    16.  This Conveyance  is  being  executed  in  several counterparts, all of
which  are  identical,  except  that,  to  facilitate recordation,  in  certain
counterparts hereof only that portion of Exhibit  "A"  which  contains specific
descriptions  of  the  Subject  Lands located in the recording jurisdiction  in
which  the counterpart is to be recorded  shall  be  included,  and  all  other
portions  of  Exhibit "A" shall be included by reference only.  Complete copies
of this Conveyance  containing  the  entire  Exhibit  "A" have been retained by
Grantor and Grantee.  All of such counterparts together  shall  constitute  but
one and the same instrument.

    17.    WITHOUT  REGARD  TO  PRINCIPLES OF CONFLICTS OF LAW, THIS CONVEYANCE
SHALL BE CONSTRUED AND ENFORCED IN  ACCORDANCE WITH AND GOVERNED BY THE LAWS OF
THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY
WITHIN SUCH STATE AND THE LAWS OF THE  UNITED STATES OF AMERICA, EXCEPT THAT TO
THE EXTENT THAT THE LAW OF A STATE IN WHICH A PORTION OF THE OVERRIDING ROYALTY
IS LOCATED (OR WHICH IS OTHERWISE APPLICABLE  TO  A  PORTION  OF THE OVERRIDING
ROYALTY)  NECESSARILY  OR,  IN  THE  SOLE  DISCRETION OF GRANTEE, APPROPRIATELY
GOVERNS, WITH RESPECT TO PROCEDURAL AND SUBSTANTIVE  MATTERS  RELATING  TO  THE
CREATION,  PERFECTION  AND  VESTING OF THE OVERRIDING ROYALTY, AND OTHER RIGHTS
AND REMEDIES OF THE GRANTEE GRANTED  HEREIN,  THE LAW OF SUCH STATE SHALL APPLY
AS TO THAT PORTION OF THE OVERRIDING ROYALTY LOCATED  IN (OR WHICH IS OTHERWISE
SUBJECT  TO  THE LAWS OF) SUCH STATE.  GRANTOR AND GRANTEE  HEREBY  IRREVOCABLY
SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS SITTING IN
THE CITY OF NEW  YORK,  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 HEREBY IRREVOCABLY WAIVE, AND
AGREE 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.   GRANTOR  AND  GRANTEE  HEREBY
IRREVOCABLY WAIVE  PERSONAL  SERVICE  OF  PROCESS  AND CONSENT TO PROCESS BEING
SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING BY MAILING A COPY THEREOF TO SUCH
PARTY AT THE ADDRESS SHOWN ABOVE FOR SUCH PARTY, AND  AGREE  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.  THE PARTIES ACKNOWLEDGE THAT GRANTEE
HAS AN OFFICE IN THE STATE OF NEW YORK  AND  HAS  MADE  PAYMENTS TO SOUTH TEXAS
FROM  ITS  BANK ACCOUNT LOCATED IN THE STATE OF NEW YORK.   EACH  PARTY  HEREBY
IRREVOCABLY  WAIVES  ANY  RIGHT  IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY
TRIAL FOR THE ADJUDICATION OF ANY  DISPUTE  HEREUNDER OR IN CONNECTION HEREWITH
OR ARISING OUT OF THIS CONVEYANCE OR ANY TRANSACTION CONTEMPLATED HEREBY.

    IN WITNESS WHEREOF, this Conveyance is executed this 1st day of April 2008,
effective as of  7 o'clock a.m. local time at  the  locations  of  the  Subject
Lands, respectively on September 25, 2007 (the "Effective Time").

               [SIGNATURES AND ACKNOWLEDGEMENT PAGES TO FOLLOW]
#


<PAGE>



                                           "GRANTOR"

                                           STO OPERATING COMPANY


                                           By:
                                             Name:
                                             Title:




                                           "GRANTEE"

                                           THE LONGVIEW FUND, L.P.

                                           By: Viking Asset Management, LLC
                                           Its:  Investment Adviser

                                           By:   ___________________________
                                             Name: S. Michael Rudolph
                                             Title:Chief Financial Officer



STATE OF TEXAS                   )
                                     )  ss:
CITY AND COUNTY OF ___________       )

    The  foregoing  instrument  was  acknowledged  before me on this ___ day of
April,  2008,  by _____________, _______________ of STO  Operating  Company,  a
Texas corporation, as the act and deed and on behalf of said corporation.



				    __________________________________
                                    Notary Public, State and County of
         [SEAL]
                		    __________________________________
                                                      (printed name)

My commission expires:



<PAGE>




                                                           ACKNOWLEDGMENT


State of California
County of _____________________________)


On _________________________ before me, ______________________________________
                                        (insert name and title of the officer)
personally appeared  _______________________________________  _______________,
who  proved  to  me  on the basis of satisfactory
evidence  to  be  the  person(s) whose name(s) is/are subscribed to the within
instrument and acknowledged to  me  that  he/she/they  executed  the  same  in
his/her/their authorized capacity(ies), and that by his/her/their signature(s)
on the instrument the person(s), or  the  entity  upon  behalf  of  which  the
person(s) acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State  of  California
that the foregoing paragraph is true and correct.


WITNESS my hand and official seal.


Signature ____________________________ (SEAL)




<PAGE>


                                  EXHIBIT "A"

                          [DESCRIPTION OF PROPERTIES]


See attached.