EXHIBIT
      10.27

    


    FIFTH
      AMENDMENT TO PURCHASE AND SALE AGREEMENT

    

      TRINITY
        BAY,
        REDFISH
        REEF,
        FISHERS
        REEF,
        NORTH
        POINT
        BOLIVAR
        FIELDS

      IN
        GALVESTON
        AND
        CHAMBERS
        COUNTIES,
        TEXAS

       

    

    THIS
      FIFTH AMENDMENT TO PURCHASE AND SALE AGREEMENT
      (the
“Fifth Amendment”) is dated effective as of April 12, 2007, and is made by and
      between Masters
      Resources, LLC,
      and
Masters
      Oil & Gas, LLC,
      both
      Texas limited liability companies having their respective principal places
      of
      business at 9801 Westheimer, Suite 1070, Houston, Texas 77042 (collectively,
      “Masters”), and Tekoil
      and Gas Gulf Coast, LLC,
      a
      Delaware limited liability company, having its principal place of business
      at
      5036 Dr. Phillips Blvd., Suite 232, Orlando, Florida 32819 (“Buyer”) (Masters
      and Buyer are sometimes called collectively the “parties” and individually
“party”).

    


    RECITALS

    


    On
      November 13, 2006, Masters and Tekoil and Gas Corporation, a Delaware
      corporation (“Original Buyer”), executed and delivered a Purchase and Sale
      Agreement, dated effective as of October 1, 2006, covering the “Assets”
described therein. On December 29, 2006, Masters and Original Buyer executed
      and
      delivered that certain First Amendment to Purchase and Sale Agreement also
      covering the Assets. On February 8, 2007, the parties contemporaneously executed
      and delivered that certain Second Amendment and that certain Assignment and
      Assumption Agreement (the “Assignment”) by and between Buyer and Original Buyer.
      On March 1, 2007, Masters and Buyer executed and delivered that certain Third
      Amendment to Purchase and Sale Agreement also covering the Assets. On March
      22,
      2007 Masters and Buyer executed and delivered that certain Fourth Amendment
      to
      Purchase and Sale Agreement also covering the Assets (the Purchase and Sale
      Agreement, the First Amendment to Purchase and Sale Agreement, the Second
      Amendment to the Purchase and Sale Agreement, the Third Amendment to the
      Purchase and Sale Agreement and the Fourth Amendment to the Purchase and Sale
      Agreement are herein collectively referred to as the “Original Agreement”). The
      parties now desire to amend the Original Agreement in certain respects.
      Accordingly, the parties agree as set out in this Fifth Amendment. (Unless
      otherwise noted, defined terms used in this Fifth Amendment shall have the
      meanings ascribed to them in the Original Agreement). 

    


    I. AMENDMENTS

    


    A. The
      opening paragraph of Section 2.1 of the Original Agreement is deleted and the
       following
      is inserted in lieu thereof:

    


    “2.1 Purchase
      Price

     

    The
      Purchase Price for the Assets will be Forty Million and No/100 Dollars
      ($40,000,000.00), plus
      4,000,000
      shares of common stock of Original Buyer1 (the
      “Common Stock”), plus
      the
      reservation at Closing by Masters of the overriding royalty interests described
      in this Section 2.1 hereinbelow. Masters will accept at Closing a promissory
      note by Original Buyer, in the form attached hereto as Exhibit
      A,
      in the
      original principal amount of Ten Million and No/100 Dollars ($10,000,000.00)
      (the “Note”), representing ($10,000,000.00) of the ($40,000,000.00) monetary
      portion of the Purchase Price described above. The Note shall be secured by
      a
      Pledge and Security Agreement covering the membership interest of Old Buyer
      in
      Buyer, in the form attached hereto as Exhibit
      B.

    


    The
      Note
      shall be convertible at the election of Masters into up to three million shares
      of common stock of Original Buyer (the “Conversion Stock”) at a conversion price
      of $3.33 per share, subject to the provisions of Section 2.1(B)
      hereof.

     

      
        

      

    

    
      
        	1	
                Both
                  parties acknowledge that all references to “Buyer” in Section 2.1 (B) of
                  the Original Agreement shall be amended to “Original
                  Buyer.”

              


      

       

    

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    The
      One
      Million and No/100 Dollar ($1,000,000.00) set aside provided for in the
      separately executed Erskine Indemnity Agreement between Masters and Buyer shall
      at any time due thereunder be, at Buyer’s sole discretion, immediately applied
      against amounts due under the Note at the time of Buyer’s request, and
      any
      other amounts due Buyer under such Indemnity Agreement may, at Buyer's sole
      discretion, be set off against amounts due under the Note. If the Erskine
      dispute is not settled to the reasonable satisfaction of Buyer by the time
      the
      Note is to be satisfied, Two Million Dollars ($2,000,000) of the obligations
      due
      under the Note shall be suspended (and no default or interest accrual shal
      occur
      onder the Note as a result thereof) pending resolution of such dispute to the
      reasonable satisfaction of Buyer or application of the One Million dollar
      ($1,000,000) set aside and the additional One Million dollar ($1,000,000) offset
      amount against such Two Million Dollar ($2,000,000) Note balance as further
      provided in the Indemnity Agreement."

    


    B.
       The
      reference in the first line of Section 2.1(B) to 500,000 shares is deleted
      and
      replaced with “4,000,000 shares and the Note (which may be converted into the
      Conversion Stock as aforesaid)” and the second line of Section 2.1(B) is amended
      by inserting between the words “”shares” and “shall” the following
      phrase:

    


    “(together
      with the Note and any shares of Conversion Stock into which any portion of
      the
      Note is converted as described above)”

    


    C.
       The
      following is inserted as subsection (D) in Section 2.1 of the Original
      Agreement:

    


    “(D) At
      Closing Masters shall reserve an additional overriding royalty interest (the
      “Additional ORRI”) for a three (3) year period from the date of Closing, after
      which the Additional ORRI will expire. The Additional ORRI shall be equal to
      2%
      of 100% of the production from:

    


    (1) those
      of
      the Wells shown as “proved undeveloped reserves” and “proved non-producing
      reserves” and “proved developed producing” in the Reserve Report; and


    


    (2) any
      present or future well completed in and producing from any zone or formation
      not
      presently producing or capable of producing and not documented in the Reserve
      Reports.”

    


    D. Section
      8.1 of the Original Agreement is deleted and the following is inserted in lieu
       thereof:

    


    
      
        “8.1
          Date,
          Time and Place of Closing

      

    

    


    Unless
      the parties agree otherwise in writing and subject to the provisions in this
      Agreement, the completion of the transaction contemplated by this Agreement
      (the
“Closing”) will be held on or
      before
      April
      25, 2007, at 10:00 a.m. Central Standard Time (or such earlier date or time
      as
      the parties may agree). The Closing will be held at the offices of Masters
      as
      set forth in the opening paragraph of this Agreement (or such other place as
      the
      parties may agree). In the event that the Closing does not occur before the
      close of business at 5:00 p.m. on April 25, 2007, Masters shall have the right
      to terminate this Agreement and to retain the Deposit.”

    


    E. That
      certain Subscription Agreement dated December 29, 2006 and executed by and
      between Masters and Original Buyer is superseded entirely by a certain Amended
      and Restated Subscription Agreement between Masters and Original Buyer of even
      date herewith substantially in the form attached hereto as Exhibit
      C.

    


    F.
      The
      Registration Rights Agreement executed December 29, 2006 by and between Masters
      and Original Buyer in connection with the Subscription Agreement, is subject
      to
      the amendments made herein and the Common Stock and the Conversion Stock
      described herein shall constitute the “Registrable Securities”
thereunder.

    


    G.
      The
      following is inserted in Exhibit “A” of the Original Agreement: 

    


    “Lease
      No. TX-0894-0001

     
      Lessor: State of Texas M-105666

     
      Lease Date: 10/4/2005

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    Recording
      Information: Recorded in the Official Public Records of Chambers and Galveston
      Counties, Texas, in Chambers County under File No. 05 826 621 and in Galveston
      County under File No. 2006001465, covering approximately 320 acres being the
      NE/2 of State Tract 199, East Bay.

    


    Lease
      No.
      TX-0894-0002

    Lessor:
      State of Texas M-105667

    Lease
      Date: 10/4/2005

     

    Recording
      Information: Recorded in the Official Public Records of Chambers and Galveston
      Counties, Texas, in Chambers County under File No. 05 826 615 and in Galveston
      County under File No. 2006001464, covering approximately 320 acres being the
      SW/2 of State Tract 199, East Bay.

    


    Lease
      No.
      TX-0894-0003

    Lessor:
      State of Texas M-106331

    Lease
      Date: 4/4/2006

     

    Recording
      Information: Recorded in the Official Public Records of Chambers County, Texas
      under File No. _____________, covering approximately 160 acres being the È/2 of
      the NE/2 of State Tract 226, Galveston Bay.”

    


    H.
      The
      following is inserted in Exhibit “B” of the Original Agreement: 

    


    “State
      Tract No. 199 No. 1 Well located in Chambers/Galveston Counties,
      Texas.

    Masters
      Resources, LLC Working Interest:

    WI
      before
      Contract Depth of Initial Well: 6.667%

    WI
      after
      contract depth of Initial Well: 5.00%.”

    


    I.
      The
      following is inserted in Exhibit “C” of the Original Agreement: 

    


    “Joint
      Operating Agreement dated May 1, 2006 by and between Davis Petroleum Corp.
      (“Operator”) and Masters Resources, LLC, et. al. covering the Dolphin Prospect,
      being 800 acres in State Tracts 199 and 226 and the associated Area of Mutual
      Interest.”

    


    J.
      The
      following is inserted in Schedule 3.1 (H) of the Original Agreement.


    


    “Joint
      Operating Agreement dated May 1, 2006 by and between Davis Petroleum Corp.
      (“Operator”) and Masters Resources, LLC, et. al. covering the Dolphin Prospect,
      being 800 acres in State Tracts 199 and 226 and the associated Area of Mutual
      Interest.”

    


    K.
      The
      reference to the Dolphin Prospect in Schedule 1.2 (A) of the Original Agreement
      is deleted in its entirety from Schedule 1.2 (A). 

    


    II. MISCELLANEOUS

    


    A. To
      the
      extent any provision of the Original Agreement, conflicts with any provision
      of
      this Fifth Amendment, the provisions of this Fifth Amendment shall control
      and
      be used to determine the obligations of the Parties.

    


    B. The
      parties ratify confirm and adopt the Original Agreement as amended and
      supplemented by this Fifth Amendment.

    


    C. Facsimile
      delivery of this Fifth Amendment signed by each party to the other shall be
      binding and effective the same as if an original signed copy has been delivered
      by each party to the other. This Fifth Amendment may be executed in multiple
      counterparts, each of which shall be considered an original and all of which
      together shall constitute one and the same document.

    


    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    


    


    [SIGNATURE
      PAGE FOLLOWS]

     

    
      
        
        

      

      
        4

        
          

        

      

       

    


    


    IN
      WITNESS WHEREOF,
      the
      parties hereto have executed this Second Amendment as of April 12,
      2007.

    


    


    TEKOIL
      AND GAS GULF COAST, LLC

    


    By: Tekoil
      & Gas Corporation,

           
      Its Sole Member

     

    By: /s/
      Mark
      S. Western

    
      
        

      

    

    Name:
      Mark Western

    Title: President

     

    
      	 MASTERS RESOURCES,
              LLC:	 	 MASTERS OIL & GAS,
              LLC:
	 	 	 
	 	 	 
	
               By: /s/
                Richard M. Lee

              
                

              

              Name: Richard
                H. Lee

              Title: Manager

            	 	
               By: /s/
                Richard M. Lee 

              
                

              

              Name:
                Richard H. Lee
Title: Manager

            


    

     

    
      
        
        

      

      
        5

        
          

        

      

       

    


    EXHIBIT
      A
 

    


    


    PROMISSORY
      NOTE

    


    PAYABLE
      TO MASTERS


    
      
        
        

      

      
        6

        
          

        

      

       

    


    THIS
      SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
      (THE “ACT”), OR ANY APPLICABLE STATE LAW, AND MAY NOT BE SOLD, DISTRIBUTED,
      ASSIGNED, OFFERED, PLEDGED OR OTHERWISE TRANSFERRED UNLESS (A) THERE IS AN
      EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES
      LAWS COVERING ANY SUCH TRANSACTION OR (B) SUCH TRANSACTION IS EXEMPT FROM
      REGISTRATION AND, IF REQUESTED BY THE MAKER, THE MAKER HAS RECEIVED AN OPINION
      OF COUNSEL SATISFACTORY TO THE MAKER THAT THE TRANSFER IS EXEMPT FROM THE
      REGISTRATION PROVISIONS UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES
      LAWS.

    


    THIS
      NOTE
      IS SUBJECT TO THE PROVISIONS OF A SUBSCRIPTION AGREEMENT, INCLUDING THEREIN
      CERTAIN RESTRICTIONS ON TRANSFER. A COMPLETE AND CORRECT COPY OF SUCH AGREEMENT
      IS AVAILABLE FOR INSPECTION AT THE PRINCIPAL OFFICE OF THE COMPANY AND WILL
      BE
      FURNISHED UPON WRITTEN REQUEST AND WITHOUT CHARGE

    


    CONVERTIBLE

    PROMISSORY
      NOTE

    


    
      	$10,000,000.00 	 	
              ______________
                __,
                2007

            



    


    FOR
      VALUE
      RECEIVED, the undersigned, TEKOIL & GAS CORPORATION, a Delaware corporation
      (“Maker”), promises to pay to the order of MASTERS RESOURCES, LLC and MASTERS
      OIL & GAS, LLC, both Texas limited liability companies, an individual
      referred to collectively as “Payee” or “Holder”), at the office of Payee at 9801
      Westheimer, Suite 1070, Houston, Texas 77042, or at such other place as Holder
      may designate to Maker in writing from time to time, the principal sum of TEN
      MILLION AND NO/100THS DOLLARS ($10,000,000.00), in lawful money of the United
      States. Amounts payable hereunder shall be paid, at Payee’s option as specified
      by Payee in writing from time to time, either by (i) check delivered to the
      office of Payee or (ii) wire transfer of immediately available funds to an
      account specified by Payee in writing from time to time. This Note is referred
      to in and issued pursuant to that certain Subscription Agreement, dated as
      of
      April ___, 2007, by and between Payee and Maker (as amended from time to time,
      the “Agreement”). 

    


    This
      Note
      shall be convertible into shares of common stock of Maker (“Common Stock”) at
      the option of Holder at the “Conversion Rate” described below of obligation owed
      hereunder for each share of Common Stock, as further provided below. The
      Conversion Rate shall be one (1) share of Common Shares per $3.33 in amount
      due
      under the Note.

    


    To
      convert all of any portion of this Note, the Holder must (a) complete and
      manually sign the irrevocable conversion notice attached hereto (or complete
      and
      manually sign a facsimile of such notice) and deliver such notice to the
      Company, (b) if this Note is in certificated form, surrender such Note to the
      Company, (c) furnish appropriate endorsements and transfer documents if required
      by the Company and (d) pay any transfer or similar tax, if required. The date
      on
      which the Holder satisfies all such requirements shall be deemed to be the
      date
      on which this Note shall have been surrendered for conversion.

    


    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

       

    

    Commencing
      with the thirty first (31st) day following the date hereof, the unpaid principal
      balance of this Note shall accrue interest at the rate of six percent (6%)
      simple interest, per annum. On the sixtieth (60th) day following the date hereof
      (the “Maturity Date”), the entire unpaid principal balance, together with
      accrued but unpaid interest, if any, shall be immediately due and payable in
      full. If such day is not a business day, such payment shall be made on the
      next
      succeeding day which is a business day and interest shall continue to accrue
      thereon until paid. As used herein, “business day” means a day, other than a
      Saturday, Sunday or legal holiday, on which commercial banks in Houston, Texas
      are open for the general transaction of business.

    


    The
      indebtedness evidenced hereby may be prepaid in whole or in part, at any time
      and from time to time, without premium or penalty. Any such prepayments shall
      be
      credited first to any accrued and unpaid interest and then to the outstanding
      principal balance hereof.

    


    The
      failure of Maker to pay any principal, interest or any other sums required
      hereunder when due under this Note shall constitute a default. If a default
      shall occur hereunder and such default shall continue for fifteen (15) business
      days after notice thereof is delivered by Holder to Maker, then, and in such
      event, the entire outstanding principal balance of the indebtedness evidenced
      hereby, together with any other sums advanced hereunder and/or under any other
      instrument or document now or hereafter evidencing, securing or in any way
      relating to the indebtedness evidenced hereby, shall, at the option of Holder
      become due and payable regardless of the stipulated date of maturity. Upon
      the
      occurrence of a default as set forth herein, which default is not cured
      following the giving of any applicable notice and within any applicable cure
      period set forth herein, at the option of Holder the outstanding principal
      balance hereof shall bear interest thereafter until paid at an annual rate
      (the
“Default Rate”) equal to the lesser of (i) ten percent (10%) per annum, or (ii)
      the maximum rate of interest allowed to be charged under applicable law (the
      “Maximum Rate”), regardless of whether or not there has been an acceleration of
      the payment of principal as set forth herein. 

    


    This
      Note
      is secured by a certain Pledge and Security Agreement dated as of the date
      hereof relating to membership interests in Tekoil and Gas Gulf Coast, LLC,
      a
      Delaware limited liability company, owned by Maker.

    


    In
      the
      event this Note is placed in the hands of an attorney for collection, or if
      Holder incurs any costs incident to the collection of the indebtedness evidenced
      hereby, Maker and any endorsers hereof agree to pay to Holder an amount equal
      to
      all such costs, including, without limitation, all reasonable attorneys’ fees
      and all court costs.

    


    Presentment
      for payment, demand, protest and notice of demand, protest and nonpayment are
      hereby waived by Maker and all other parties hereto. No failure to accelerate
      the indebtedness evidenced hereby by reason of a default hereunder, acceptance
      of a past-due installment or other indulgences granted from time to time, shall
      be construed as a novation of this Note or as a waiver of such right of
      acceleration or of the right of Holder thereafter to insist upon strict
      compliance with the terms of this Note or to prevent the exercise of such right
      of acceleration or any other right granted hereunder or by applicable law.
      No
      extension of the time for payment of the indebtedness evidenced hereby or any
      installment due hereunder, made by agreement with any person now or hereafter
      liable for payment of the indebtedness evidenced hereby, shall operate to
      release, discharge, modify, change or affect the original liability of Maker
      hereunder or that of any other person now or hereafter liable for payment of
      the
      indebtedness evidenced hereby, either in whole or in part, unless Holder agrees
      otherwise in writing. This Note may not be changed orally, but only by an
      agreement in writing signed by the party against whom enforcement of any waiver,
      change, modification or discharge is sought.

    


    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

       

    

    All
      agreements herein made are expressly limited so that in no event whatsoever,
      whether by reason of advancement of proceeds hereof, acceleration of maturity
      of
      the unpaid balance hereof or otherwise, shall the amount paid or agreed to
      be
      paid to Holder for the use of the money advanced or to be advanced hereunder
      exceed the Maximum Rate. If, from any circumstances whatsoever, the fulfillment
      of any provision of this Note or any other agreement or instrument now or
      hereafter evidencing, securing or in any way relating to the indebtedness
      evidenced hereby shall involve the payment of interest in excess of the Maximum
      Rate, then, ipso facto,
      the
      obligation to pay interest hereunder shall be reduced to the Maximum Rate;
      and
      if from any circumstance whatsoever, Holder shall ever receive interest, the
      amount of which would exceed the amount collectible at the Maximum Rate, such
      amount as would be excessive interest shall be applied to the reduction of
      the
      principal balance remaining unpaid hereunder and not to the payment of interest.
      This provision shall control every other provision in any and all other
      agreements and instruments existing or hereafter arising between Maker and
      Holder with respect to the indebtedness evidenced hereby.

    


    This
      Note
      is intended as a contract under and shall be construed and enforceable in
      accordance with the laws of the State of Texas, and shall be enforceable in
      a
      court of competent jurisdiction in the State of Texas, regardless of in which
      state this Note is being executed.

    


    HOLDER
      AND MAKER HEREBY KNOWINGLY AND VOLUNTARILY WITH THE BENEFIT OF COUNSEL WAIVE
      TRIAL BY JURY IN ANY ACTIONS, PROCEEDINGS, CLAIMS OR COUNTER-CLAIMS, WHETHER
      IN
      CONTRACT OR TORT OR OTHERWISE, AT LAW OR IN EQUITY, ARISING OUT OF OR IN ANY
      WAY
      RELATING TO THIS NOTE.

    


    As
      used
      herein, the terms “Maker” and “Holder” shall be deemed to include their
      respective successors, legal representatives and assigns, whether by voluntary
      action of the parties or by operation of law.

     

    
      	 	 	
               MAKER:

               

              
                TEKOIL
                  & GAS CORPORATION

                a
                  Delaware corporation

              

            
	 	 
	 	 
	
            	By:  	 
	 	
              

              Mark
                Western

              Chief
                Executive Officer

            



      
        
          
          

        

        
          9

          
            

          

        

         

      

    

     

    EXHIBIT
      A TO PROMISSORY NOTE

    


    CONVERSION
      NOTICE

    


    To:         
      Tekoil
      & Gas
      Corporation
               
5036
      Dr.
      Phillips Boulevard

                   
       Suite 232

                    
      Orlando,
      Florida 32819

    


    The
      undersigned hereby elects to:

    


    Convert
      $_________ in
      amount
      due for ______________ (conversion amount divided by Conversion Rate) shares
      of
      Common Stock of Tekoil & Gas Corporation, pursuant to the terms of the
      attached Promissory Note and reduction of the amount due undersigned under
      Promissory Note by the number of shares of Common Stock indicated above
      multiplied by the Conversion Rate.

     

    The
      Holder reaffirms all covenants, representations and warranties made by it in
      a
      certain Amended and Restated Subscription Agreement dated as of April _____,
      2007, and agrees that all such covenants, representations and warranties shall
      be deemed to be have been re-made as of the date hereof.

    
      	 	 	 
	
              Date:_______________________  

            	HOLDER:
	 
 	 
 	 
 
	
            	By:  	
            
	 	
              

              Name:

              Address:

            


    

     

    Name
      in
      which shares should be registered:
      _______________________________________



    
      
        
        

      

      
        10

        
          

        

      

       

    


    EXHIBIT
      B TO FIFTH AMENDMENT


    


    PLEDGE
      AND SECURITY AGREEMENT

    (Pledge
      of Membership Interest)

    


    This
      PLEDGE
      AND SECURITY AGREEMENT
      (the
“Agreement”), is executed to be effective as of April ___, 2007 (the “Effective
      Date”), by and between TEKOIL
      & GAS CORPORATION
      a
      Delaware corporation (“Pledgor”), and MASTERS
      RESOURCES, LLC
      and
MASTERS
      OIL & GAS, LLC,
      both
      Texas limited liability companies (collectively, “Secured Party”).

    


    WHEREAS,
      Tekoil
& Gas Gulf Coast, LLC, a Delaware limited liability company (the “Company”),
      has executed a Convertible Promissory Note of even date herewith, in the
      original principal amount of Ten Million and No/100 Dollars ($10,000,000.00)
      payable to the order of Secured Party (the “Note”);

    


    WHEREAS,
      the
      Board of Directors of Pledgor has determined that Pledgor’s execution, delivery
      and performance of this Agreement may reasonably be expected to benefit Pledgor,
      directly or indirectly, and are in the best interests of Pledgor;

    


    WHEREAS,
      to
      secure Company’s obligations under the Note, Pledgor has agreed to pledge and
      grant to Secured Party a security interest in and to the Pledged Membership
      Interest (as hereinafter defined), as provided herein; 

    


    NOW,
      THEREFORE,
      for
      good and valuable consideration, the sufficiency of which is hereby
      acknowledged, the parties hereto agree as follows:

    


    1.  Grant
      of Security Interest.
      As
      collateral security for the full and timely payment, performance and observance
      of the Obligations (as defined in Section 2(a) below), Pledgor hereby pledges
      and grants to Secured Party a security interest in and to, and assigns,
      transfers, pledges and conveys to Secured Party, all of Pledgor’s right, title
      and interest in and to the following described collateral (collectively, the
      “Collateral”), now owned or hereafter acquired, wherever located, howsoever
      arising or created, and whether now existing or hereafter arising, existing
      or
      created, as security for the Obligations:

    


    (a) All
      of
      Pledgor’s right, title and interest now or hereafter accruing under the First
      Amended and Restated Operating Agreement of Tekoil & Gas Gulf Coast, LLC, as
      amended (the “Operating Agreement”), with respect to any interest now owned or
      hereafter acquired or owned by Pledgor in the Company, and including, without
      limitation, all distributions, proceeds, fees, preferences, payments or other
      benefits, which Pledgor now is or may hereafter become entitled to receive
      with
      respect to such interests in the Company (collectively, the “Pledged Membership
      Interest”);

    


    (b) All
      of
      Pledgor’s distribution rights, income rights, liquidation interest, accounts,
      contract rights, general intangibles, notes, instruments, drafts and documents
      relating to the Pledged Membership Interest; and

    


    (c) All
      substitutions, replacements, products, proceeds, income and profits arising
      from
      any of the foregoing.  

     

    2. Definitions.

    


    (a) The
      term
“Obligations” as used herein shall mean (i) the payment of the Note, together
      with interest on any and all amounts due thereunder as provided therein, (ii)
      all costs of collection and enforcement in connection with the Note including,
      without limitation, reasonable attorneys’ fees, and (iii) all other amounts
      payable by the Company or Pledgor to Secured Party described in this Agreement
      or in the instruments or understandings evidencing or securing the
      Note.

    


    (b) Subject
      to the further express definitions set forth herein, all terms used herein
      which
      are defined in Article 9 of the Texas Business and Commerce Code (the “Code”),
      shall have the same meaning herein as in the Code.

    


    3. Pledgor’s
      Representations and Warranties.
      Pledgor
      warrants and agrees with Secured Party that:

    


    3.01. Payment.
      Pledgor
      will not sell or otherwise dispose of any of the Collateral without the express
      written permission of Secured Party. There does not exist any certificate that
      represents the Pledged Membership Interests as such interests are
      uncertificated. 

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    


    3.02. Information.
      The
      address of Pledgor is the address set forth beside Pledgor’s signature on this
      Agreement. Pledgor shall notify Secured Party ten (10) days in advance of any
      change in Pledgor’s address.

    


    3.03. Other
      Liens.
      Except
      as evidenced hereby or executed in connection herewith, there is no certificate
      of title, financing statement or other writing showing any lien on, or security
      interest in, the Collateral. Pledgor is the lawful owner and holder of the
      Collateral and has full power and lawful authority to grant to Secured Party
      a
      security interest in the Collateral as provided in this Agreement. Pledgor
      will
      defend the Collateral against the claims and demands of all third
      persons.

    


    3.04. Covenants
      Concerning the Collateral.
      Pledgor
      shall not sell, transfer, mortgage or otherwise encumber any Collateral in
      any
      manner without first obtaining the written consent of Secured Party, which
      consent may be withheld in Secured Party’s sole and absolute discretion. Any
      written consent to any such sale, mortgage, transfer or encumbrance shall not
      be
      construed to be a waiver of this provision in respect of any subsequent proposed
      sale, mortgage, transfer or encumbrance. 

    


    3.05. Further
      Assurances.
      Pledgor
      will do, make, procure, execute and deliver all acts, things, writings and
      assurances as Secured Party may at any time reasonably request to perfect,
      protect, assure or enforce its interest, rights and remedies created by or
      arising in connection with this Agreement, including the execution of financing
      statements.

    


    3.06. Time
      of the Essence.
      Pledgor
      agrees that in performing any act under this Agreement, time shall be of the
      essence and Secured Party’s acceptance of partial or delinquent payments under
      the Notes by the Company, or failure of Secured Party to exercise any right
      or
      remedy, shall not be a waiver of any obligation of Pledgor or right of Secured
      Party or constitute a waiver of any similar or dissimilar default subsequently
      occurring.

    


    4. Event
      of Default.
      Pledgor
      shall be in “Default” under this Agreement if Pledgor defaults in the
      performance of any obligation, covenant, representation or warranty contained
      in
      this Agreement, a default occurs in payment of or otherwise under and terms
      or
      provisions of the Note, or any party (other than Secured Party) to any agreement
      executed in connection with or securing the Note, including, without limitation,
      any guaranty, any security agreement, and any agreement relating to the
      modification, renewal, extension or rearrangement of the Note, fails to perform
      any obligation, covenant, representation or warranty contained
      therein.

    


    5. Rights
      of Secured Party.

    


    5.01. Remedies
      After Default.
      

    


    (a)
      If
      any Default shall have occurred and is continuing, Secured Party, at its option,
      without demand, presentment, notice of acceleration, intention to accelerate
      or
      other notice (which are fully waived) may:

    


    (1)
      exercise all the rights of a secured party under the Code.

    


    (2)
      sell
      all of the Collateral or any part thereof at public or private sale or at any
      broker’s board or on any securities exchange, for cash, at such price or prices
      as Secured Party may reasonably deem satisfactory. Upon Secured Party’s demand,
      Pledgor will take all steps necessary to prepare the Collateral for and
      otherwise assist in any proposed disposition of the Collateral. Any holder
      of
      the indebtedness secured hereby may be the purchaser of any or all of the
      Collateral so sold at any public sale (or, if the Collateral is of a type
      customarily sold in a recognized market or is of a type which is the subject
      of
      widely distributed standard price quotations, at any private sale) and
      thereafter hold the same absolutely, free from any right or claim of whatsoever
      kind. Any holder of the Collateral shall have the right to offset the amount
      of
      its bid against an equal amount of the secured indebtedness held by such
      holder.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    


    Pledgor
      agrees that, because of the Securities Act of 1933, as amended, or any other
      laws or regulations, and for other reasons, there may be legal and/or practical
      restrictions or limitations affecting Secured Party in any attempts to dispose
      of certain portions of the Collateral and for the enforcement of its rights.
      For
      these reasons, Secured Party is hereby authorized by Pledgor, but not obligated,
      upon the occurrence and during the continuation of a Default, to sell all or
      any
      part of the Collateral at private sale, subject to investment letter or in
      any
      other manner which will not require the Collateral, or any part thereof, to
      be
      registered in accordance with the Securities Act of 1933, as amended, or the
      rules and regulations promulgated thereunder, or any other laws, at a reasonable
      price at such private sale or other distribution in the manner mentioned above.
      Pledgor understands that Secured Party may in its discretion approach a limited
      number of potential purchasers and that a sale under such circumstances may
      yield a lower price for the Collateral, or any part or party thereof, than
      would
      otherwise be obtainable if such Collateral were either afforded to a larger
      number or potential purchasers, or registered or sold in the open market.
      Pledgor agrees that such private sale shall be deemed to have been made in
      a
      commercially reasonable manner, and that Secured Party has no obligation to
      delay the sale of any Collateral to permit the issuer thereof to register it
      for
      public sale under any applicable federal or state securities laws.

    


    Secured
      Party is authorized, in connection with any such sale (i) to restrict the
      prospective bidders on or purchasers of any of the Collateral to a limited
      number of sophisticated investors who will represent and agree that they are
      purchasing for their own account for investment and not with a view to the
      distribution or sale of any of such Collateral and (ii) to impose such other
      limitations or conditions in connection with any such sale as Secured Party
      reasonably deems necessary in order to comply with applicable law. Pledgor
      covenants and agrees that it will execute and deliver such documents and take
      such other action as Secured Party reasonably deems necessary in order that
      any
      such sale may be made in compliance with applicable law. Upon any such sale,
      Secured Party shall have the right to deliver, assign and transfer to the
      purchaser thereof the Collateral so sold. Each purchaser at any such sale shall
      hold the Collateral so sold absolutely, free from any claim or right of Pledgor
      of whatsoever kind, including any equity or right of redemption of Pledgor.
      Pledgor, to the extent permitted by applicable law, hereby specifically waives
      all rights of redemption, stay or appraisal which it has or may have under
      any
      law now existing or hereafter enacted.

    


    Pledgor
      agrees that ten (10) days written notice from Secured Party to Pledgor of
      Secured Party’s intention to make any such public or private sale or sale at a
      broker’s board or on a securities exchange shall constitute “reasonable
      notification” within the meaning of the Code. Such notice shall (1) in case of a
      public sale, state the time and place fixed for such sale, (2) in case of sale
      at a broker’s board or on a securities exchange, state the board or exchange at
      which such a sale is to be made and the day on which the Collateral, or the
      portion thereof so being sold, will first be offered to sale at such board
      or
      exchange and (3) in the case of a private sale, state the day after which such
      sale may be consummated. Any such public sale shall be held at such time or
      times within ordinary business hours and at such place or places as Secured
      Party may fix in the notice of such sale. At any such sale, the Collateral
      may
      be sold in one lot as an entirety or in separate parcels, as Secured Party
      may
      reasonably determine. Secured Party shall not be obligated to make any such
      sale
      pursuant to any such notice. Secured Party may, upon written notice to Pledgor,
      adjourn any public or private sale or cause the same to be adjourned from time
      to time by announcement at the time and place fixed for the sale, and such
      sale
      may be made at any time or place to which the same may be so
      adjourned.

    


    Secured
      Party, instead of exercising the power of sale herein conferred upon it, may
      proceed by a suit or suits at law or in equity to foreclose the security
      interests and sell the Collateral, or any portion thereof, under a judgment
      or
      decree of a court or courts of competent jurisdiction.

    


    (b)
      Without limiting the foregoing, or imposing upon Secured Party any obligations
      or duties not required by applicable law, Pledgor acknowledges and agrees that,
      in foreclosing upon any of the Collateral, or exercising any other rights or
      remedies provided Secured Party hereunder or under applicable law, Secured
      Party
      may, but shall not be required to: (1) qualify or restrict prospective
      purchasers of the Collateral by requiring evidence of sophistication and/or
      creditworthiness, and requiring the execution and delivery of confidentiality
      agreements or other documents and agreements as a condition to such prospective
      purchasers’ receipt of information regarding the Collateral or participation in
      any public or private foreclosure sale process; (2) provide to prospective
      purchasers the Operating Agreement and business and financial information
      regarding the Company available in the files of Secured Party at the time of
      commencing the foreclosure process, without the requirement that Secured Party
      obtain, or seek to obtain, any updated business or financial information, or
      verify, or certify to prospective purchasers, the accuracy of any such business
      or financial information; (3) sell at foreclosure all, or a portion but not
      all,
      of the rights, titles and interests of Pledgor in the Company; it being further
      specifically acknowledged by Pledgor that limitations or potential limitations
      on the transfer of certain Collateral under the Regulations or other applicable
      agreements or law may limit Secured Party’s right or ability to foreclose upon
      or sell certain rights, titles and interests of Pledgor in the Company; (4)
      offer for sale, and sell, the Pledged Membership Interests either with, or
      without, first employing an appraiser, investment banker, or broker with respect
      to the evaluation of Collateral, the solicitation of purchasers for Collateral,
      or the manner of sale of Collateral.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    


    (c)
      Secured Party shall have all rights, remedies and recourse granted in the Note,
      this Agreement or existing at common law or equity (including specifically
      those
      granted by the Code), and such rights and remedies (1) shall be cumulative
      and
      concurrent, (2) may be pursued separately, successively or concurrently against
      Pledgor and any party obligated to pay or perform the Obligations, any of the
      Collateral, or any other security for any of the Obligations, at the sole
      discretion of Secured Party, and (3) may be exercised as often as occasion
      therefor shall arise, it being agreed by Pledgor that the exercise or failure
      to
      exercise any such rights or remedies shall in no event be construed as a waiver
      or release thereof or of any other right, remedy or recourse.

    


    (d)
      Notwithstanding a foreclosure upon any of the Collateral or exercise of any
      other remedy by Secured Party in connection with a Default, Pledgor shall not
      be
      subrogated thereby to any rights of Secured Party against the Collateral or
      any
      other security for any of the Obligations. Pledgor shall not be deemed to be
      the
      owner of any interest in any of the Obligations until all of the Obligations
      have been paid to Secured Party and are fully performed and
      discharged.

    


    (e)
      All
      recitals in any instrument of assignment or any other instrument executed by
      Secured Party incident to the sale, transfer, assignment or other disposition
      or
      utilization of the Collateral or any part thereof hereunder shall be rebuttably
      presumptive evidence of the matters stated therein and all prerequisites of
      such
      sale or other action contained in such recitals shall be presumed to have been
      performed or to have occurred.

    


    (f)
      Notwithstanding anything to the contrary contained herein, Pledgor shall retain
      all voting rights with respect to the Pledged Membership Interest, including
      after a Default has occurred hereunder.

    


    5.02. No
      Waiver.
      Pledgor
      may remedy any Default and the Secured Party may waive any Default without
      waiving any other Default. The remedies of Secured Party are cumulative, and
      the
      exercise or partial exercise of any one or more of the remedies provided for
      herein shall not be construed as a waiver of any of the other remedies of
      Secured Party. No delay of Secured Party in exercising any power or right shall
      operate as a waiver thereof. Secured Party’s failure to assert a security
      interest on all or any portion of the Collateral at any time, does not waive
      any
      security interest, any right of Secured Party to assert any security interest
      or
      any other right, power or remedy of Secured Party with respect to the Collateral
      as to which Secured Party has failed to assert a security interest or any other
      Collateral.

    


    5.03. Assignment.
      This
      Agreement, the Obligations or Secured Party’s rights hereunder may not be
      assigned by Secured Party without the prior written consent of Pledgor.


    


    6. Additional
      Agreements.

    


    6.01. Miscellaneous.
      “Secured Party” and “Pledgor” as used in this Agreement include the heirs,
      successors, legal representatives, receivers and assigns of those parties.
      The
      divisions of this Agreement into sections and subsections and the titles thereto
      have been made for convenience only and shall be given no substantive meaning
      or
      significance whatever in construing the terms and provisions of this
      Agreement.

    


    6.02. Choice
      of Law.
      UNLESS
      EXPRESSLY PROVIDED ELSEWHERE IN THIS AGREEMENT, THIS AGREEMENT SHALL BE GOVERNED
      BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
      TEXAS.

    


    6.03. Illegality.
      If any
      provision of this Agreement is rendered or declared invalid, illegal or
      ineffective by reason of any existing or subsequently enacted legislation or
      by
      decree of a court of competent jurisdiction, such legislation or decree shall
      not impair, invalidate or nullify the remainder of this Agreement which shall
      remain in full force and effect.

    


    6.04. Amendments.
      No
      modification, variation or amendment of or to this Agreement shall be effective
      unless in writing signed by Pledgor and Secured Party.

    


    6.05. Notice.
      Any
      notice or demand to Pledgor or Secured Party hereunder or in connection herewith
      may be given and shall conclusively be deemed and considered to have been given
      and received upon the deposit thereof in the mail, in writing, duly stamped
      and
      mailed by certified mail, return receipt requested and addressed to the address
      set forth on this Agreement, or at such other address as Pledgor or Secured
      Party may designate to the other in writing.

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    


    6.06. Counterparts.
      This
      Assignment may be executed simultaneously or in counterparts, each of which
      shall be deemed an original, but all of which together shall constitute one
      and
      the same agreement.

    


    [REMAINDER
      OF PAGE INTENTIONALLY BLANK]


    
      
        
        

      

      
        15

        
          

        

      

       

    


    IN
      WITNESS WHEREOF,
      Pledgor
      and Secured Party have executed this Agreement on the dates set forth below
      their signatures, to be effective as of the Effective Date.

    
      	 	 	 	 
	 	 	 	 
	Address
              for
              Notice:	 	 	PLEDGOR:
	 	 	 	 
	
              
 	 	 	
              TEKOIL
                & GAS CORPORATION, 

              a
                Delaware corporation

            
	
              
 	 	 	 
	
              
 	 	 	
              By:

              
                

              

              Mark
                Western, Chief Executive Officer

            
	 	 	 	 
	
            	 	 	Date:
	 	 	 	
              
                
 

            
	 	 	 	 
	Address for Notice:	 	 	SECURED PARTY:
	 	 	 	 
	
              
 	 	 	
              MASTERS
                RESOURCES, LLC, 

              a
                Texas limited liability
                company

            
	
              
 	 	 	 
	
              
 	 	 	
              By:

              
                

              

              Name:

              
                

              

              Title:

              
                
 

            
	 	 	 	
              Date: 

              
                
 

            
	 	 	 	 
	
              
 	 	 	
              MASTERS
                OIL & GAS, LLC, 

              a
                Texas limited liability
                company

            
	
              
 	 	 	 
	
              
 	 	 	
              By:

              
                

              

              Name: 

              
                

              

              Title: 

              
                

              

               

              Date: 

              
                
 

            


    

        

    
      
        
        

      

      
        16

        
          

        

      

       

    


    EXHIBIT
      C TO FIFTH AMENDMENT


    


    TEKOIL
      & GAS CORPORATION

     

    AMENDED
      AND RESTATED

    SUBSCRIPTION
      AGREEMENT

     

    This
      Agreement supersedes and replaces a certain Subscription Agreement executed
      by
      the parties hereto as of December 29, 2006.

     

    THE
      COMMON STOCK HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
      AMENDED (THE “SECURITIES ACT”) OR UNDER THE PROVISIONS OF ANY APPLICABLE STATE
      SECURITIES LAWS. THE COMMON STOCK MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED,
      HYPOTHECATED OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE
      REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR AN OPINION OF COUNSEL
      SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT
      OR
      UNLESS SOLD PURSUANT TO RULE 144 UNDER SUCH ACT.

     

    1.  Subscription.
      Subscriber (as identified on the signature page attached hereto) hereby
      subscribes for and agrees to be issued Four Million (4,000,000) shares of Common
      Stock (the “Common
      Stock”)
      of
      Tekoil & Gas Corporation, a Delaware corporation (the “Company”),
      a
      Promissory Note (the “Note”)
      in the
      amount of Ten Million Dollars ($10,000,000), which Note may be converted to
      up
      to Three Million shares (3,000,000) shares of common stock of the Company (the
      “Conversion
      Stock”)
      at a
      conversion price of $3.33 per share , all as consideration under the “PSA”
described below. The Common Stock, the Note and the Conversion Stock are
      referred to together as the “Securities”.

     

    2.  Consideration.
      The
      Securities constitute a portion of the consideration payable by the Company
      to
      Subscriber under a certain Purchase and Sale Agreement dated November ___,
      2006,
      and as amended December 29, 2006, in connection with the acquisition and sale
      of
      certain assets described therein, as amended through the date hereof (referred
      to together as the “PSA”).
      Capitalized terms used herein and not otherwise defined have the meanings
      ascribed to them in the PSA.

     

    3.  Subscriber's
      Representations and Warranties.
      Subscriber represents, warrants, acknowledges and agrees that:

     

    (a)  Subscriber
      is a resident of the state indicated on the signature page hereof, is legally
      competent to execute this Subscription Agreement, and:

     

    (i)  if
      Subscriber is an individual, has his or her principal residence in such
      state;

     

    (ii)  if
      Subscriber is a corporation, partnership, trust, limited liability company
      or
      other form of business organization, has its principal office in such state;
      or

     

    (iii)  if
      Subscriber is a corporation, partnership, trust, limited liability company
      or
      other form of business organization, Subscriber has not been organized for
      the
      specific purpose of acquiring the Common Stock.

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

    (b)  Subscriber
      has not been offered the Securities by any form of general solicitation or
      general advertising, including but not limited to any advertisement, article,
      notice or other communication published in any newspaper, magazine, or similar
      media or broadcast over television or radio, or any seminar or meeting whose
      attendees have been invited by any general solicitation or general
      advertising.

     

    (c)  Subscriber
      has had access during the course of this transaction and prior to the issuance
      of the Securities to all information necessary to enable Subscriber to evaluate
      the merits and risks of a prospective investment in the Company (including,
      without limitation, the periodic and other reports filed by the Company with
      the
      U.S. Securities and Exchange Commission (the “SEC”) under the Securities
      Exchange Act of 1934, as amended (the “Exchange Act”)), and Subscriber has had
      the opportunity to ask questions of and receive answers from the officers and
      directors of the Company, or a person or persons acting on its behalf,
      concerning the terms and conditions of the offering and all questions raised
      by
      Subscriber have been answered to the full satisfaction of
      Subscriber.

     

    (d)  There
      are
      substantial restrictions on the transferability of the Securities and,
      accordingly, Subscriber will need to bear the economic risk of the investment
      in
      the Securities for an indefinite period of time and will not be readily able
      to
      liquidate the investment in case of an emergency.

     

    (e)  Subscriber
      understands that the Company has a limited financial or operating history,
      each
      of the Securities is a speculative investment which involves a high degree
      of
      financial risk, and there is no assurance of any economic, income or tax benefit
      from such investment.

     

    (f)  In
      making
      this investment, Subscriber is relying solely upon the advice of Subscriber's
      personal tax advisors, and not the Company nor its advisers and counsel, with
      respect to the tax aspects of an investment in the Securities.

     

    (g)  If
      Subscriber is a corporation, partnership, trust, limited liability company,
      employee benefit plan or other entity, Subscriber is authorized and qualified
      to
      become a stockholder of the Company and the person signing this Subscription
      Agreement on behalf of such entity has been duly authorized by such entity
      to do
      so.

     

    (h)  No
      representations or warranties have been made to Subscriber by the Company or
      any
      officer, employee, agent or affiliate of the Company (other than those set
      forth
      in the PSA), and Subscriber's investment decision has been based solely upon
      Subscriber's independent evaluation and due diligence, if any, of the
      Company.

     

    (i)  Subscriber
      is experienced in evaluating and investing in early stage companies such as
      the
      Company. Subscriber is experienced in business matters and regards himself,
      herself or itself as a sophisticated investor able to evaluate investment and
      financial information and to choose independent professional advisors to assist
      in such evaluation and, either alone or with such advisers, has such knowledge
      and experience in financial and business matters that Subscriber is capable
      of
      evaluating the merits and risks of an investment in the Securities and has
      the
      capacity to protect Subscriber’s own interests in connection with Subscriber’s
      proposed investment in the Securities.

     

    (j)  Subscriber’s
      aggregate commitments to investments that are not readily marketable are not
      disproportionate to Subscriber’s net worth and an investment in the Securities
      will not cause such aggregate commitment to become excessive. Subscriber has
      adequate means of providing for Subscriber’s current needs and possible personal
      and family contingencies. Subscriber will not be readily able to liquidate
      the
      investment in the case of an emergency, and Subscriber has no need for liquidity
      in this investment in the Company.

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

     

    (k)  Subscriber
      has a preexisting business or personal relationship with the Company or with
      one
      or more of its officers or directors. Except for Subscriber’s intention to
      distribute the shares (or cause them to be issued directly) to its members,
      pro-rata, on condition that they make the representations, warranties and
      agreements herein provided in favor of Company, Subscriber is acquiring the
      Securities solely for Subscriber’s own account for investment (and not for the
      account of any other person), and not with a view to, or for, any resale,
      distribution, fractionalization or other transfer thereof, and Subscriber has
      no
      present plans to enter into any contract, undertaking, agreement or arrangement
      for any such resale, distribution, fractionalization or transfer.

     

    4.  Representations
      and Warranties Concerning Suitability and Accredited Investor
      Status.
      Subscriber hereby represents and warrants to the Company that Subscriber is
      an
“Accredited Investor” (as defined under Regulation D as promulgated and
      amended by the SEC pursuant to the Securities Act) on the basis of the
      representations made by Subscriber to the Company below. Subscriber hereby
      represents and warrants and agrees that:

     

    (a)  Subscriber
      has such knowledge and experience in financial and business matters as to be
      capable of evaluating the merits and risks of an investment in the Company
      and
      has obtained sufficient information from the Company to evaluate the merits
      and
      risks of an investment in the Company.

     

    (b)  Subscriber
      has determined that the Securities are a suitable investment for Subscriber.
      Subscriber is able to bear the economic risk of the investment in the Company
      (including a complete loss thereof) and has adequate financial or other means
      for providing for Subscriber's current needs and contingencies and has no need
      for liquidity in this investment.

     

    5.  Fees
      and Expenses.
      Subscriber shall pay for all its own fees and expenses in connection with this
      subscription, including without limitation legal fees and fees of its advisors
      and counsel, if any.

     

    6.  Restrictions.
      The
      Subscriber will not at any time make any disposition of any of the Securities
      except in accordance with applicable federal and state securities laws and
      the
      legend set forth below. The certificates for the Securities, the Note and the
      Conversion Stock to be issued to the undersigned will bear a legend in
      substantially the following form:

     

    THE
      SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933 OR THE SECURITIES LAWS OF ANY STATE. SUCH SECURITIES
      MAY
      NOT BE SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
      STATEMENT UNDER THE SECURITIES ACT OF 1933 AND ANY APPLICABLE STATE SECURITIES
      LAWS OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION
      IS
      NOT REQUIRED UNDER THE SECURITIES ACT OF 1933 OR SUCH LAWS.

     

    In
      the
      event the Common Stock or Conversion Stock may be publicly resold under the
      Registration Rights Agreement or otherwise under applicable securities laws,
      Subscriber agrees that it will not publicly resell more than 250,000 shares
      thereof per calendar week. In addition, during the period that the Note is
      outstanding, subject to the limitations of the preceding sentence, which may
      be
      waived by the Company in its sole discretion, no public re-sales of the Common
      Stock may occur unless and until all Conversion Shares have been issued in
      satisfaction of the Note. Subscriber agrees that a legend reflecting the
      foregoing and reasonable transfer restrictions consistent therewith may be
      placed on the Common Stock and Conversion Stock.

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

     

    7.  Miscellaneous.
      The
      terms and conditions contained in this Subscription Agreement (together with
      the
      PSA and a certain Registration Rights Agreement executed by the Company and
      Subscriber of even date herewith) constitute the entire agreement between the
      parties with respect to the subject matter hereof and supersede all previous
      agreements and understandings, whether oral or written, between the parties
      hereto with respect to the subject matter hereof. This Subscription Agreement
      shall be construed in accordance with and governed by the laws of the State
      of
      Delaware. This Subscription Agreement may be amended only by a writing executed
      by the Company and Subscriber.

     

    IN
      WITNESS WHEREOF,
      Subscriber has executed this Subscription Agreement on the date indicated on
      the
      signature page hereof.

     

    [SIGNATURES
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        20

        
          

        

      

       

    


    The
      undersigned Subscriber confirms and certifies that Subscriber has read this
      entire Subscription Agreement and understands the provisions hereof, and that
      the undersigned has executed this Subscription Agreement as of the date set
      forth below.

     

    DATED:
      April ____, 2007

     

    Which
      will be held by Subscriber(s) in the following manner, if
      applicable:

    


    
      
        	 	(     ) 	Community Property	(     ) 	Joint Tenants with Right of
                Survivorship
	 	(     ) 	Tenants in Common	(     ) 	Separate Property
	 	(     )
                	
                Other:
                  (e.g.
                  individual, corporation, partnership, limited liability company,
                  trust,
                  investment company). Please indicate:___________________.

                 

              


      

    

    Subscriber
      Signature(s)

    
      	 	 	 	 
	MASTERS RESOURCES, LLC	 	 	MASTERS OIL & GAS,
              LLC
	 	 	 	 
	 	 	 	 
	
              

            	 	 	
              

            
	 	 	 	 
	
              

              Name
                and Title of Signatory if Subscriber is an
                entity

            	 	 	 
	 	 	 	 
	 	 	 	 
	
              
Signature	 	 	
              
Signature
              of Joint Subscriber
	 	 	 	 
	 	 	 	 
	
              
Social
              Security or Tax ID Number 	 	 	
              
Social
              Security or Tax ID Number of Joint
              Subscriber
	 	 	 	 
	 	 	 	 
	
              
Address	 	 	
              
Address
              of Joint Subscriber
	 	 	 	 
	 	 	 	 
	Reviewed and Advised By (if
              any): 	 	 	Accepted By:
	 	 	 	 
	
              
Subscriber’s
              Professional Advisor	 	 	
              TEKOIL
                & GAS CORPORATION,

              a
                Delaware corporation

            
	 	 	 	 
	 	 	 	 
	
              
Name	 	 	
              
Signature
	 	 	 	 
	 	 	 	 
	
              
Address 	 	 	
              
Name/Title


    

    


    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

        

    Note: 

     

    In
      the
      case of subscription by,

     

    
      	·  	
              Joint
                Tenants
                with Rights of Survivorship or Tenants
                in Common,
                all tenants must execute this
                subscription,

            


    

     

    
      	·  	
              Husband
                and Wife,
                as community property, one signature only is
                required.

            


    

     

    
      	·  	
              A
                Trust,
                the Trustee must sign and a copy of the Trust Agreement should be
                provided.

            


    

     

    
      	·  	
              A
                Partnership,
                a
                copy of the Statement of Partnership or the Partnership Agreement
                should
                be provided, and execution must be by the number of partners required
                therein to bind the Partnership.

            


    

     

    
      	·  	
              A
                Corporation,
                a
                resolution of the Board of Directors authorizing the subscription
                and
                certified by the Secretary should be
                included.

            


    

     

    
      
        
        

      

      
        22