GUARANTY

EXHIBIT 10.2

GUARANTY

     This GUARANTY (herein so called) dated December 30, 2004, is by Toreador Resources Corporation, a Delaware corporation, (herein referred to as the “Guarantor”). The capitalized terms used herein shall have the meanings assigned to them in the Credit Agreement (hereinafter defined), unless they are otherwise defined herein.

W I T N E S S E T H :

     WHEREAS, Toreador Exploration & Production Inc., a Texas corporation, and Toreador Acquisition Corporation, a Delaware corporation, (collectively, the “Borrowers” and individually a “Borrower”) are arranging financing with Texas Capital Bank, N.A., (the “Lender”); and

     WHEREAS, the Borrowers and the Lender are entering into the Credit Agreement dated December 30, 2004, (such agreement, as the same may have been or be from time to time supplemented or amended, or the terms thereof waived or modified being the “Credit Agreement”) which sets forth, inter alia, the terms and conditions pursuant to which the Lender will extend credit to the Borrowers (which credit is evidenced by the Note issued by the Borrowers to the Lender pursuant to the Credit Agreement); and

     WHEREAS, it is a condition precedent to the obligation of the Lender to advance amounts to the Borrowers that the Borrowers cause the Guarantor to execute and deliver to the Lender this Guaranty; and

     WHEREAS, the board of directors of the Guarantor has determined that this Guaranty may reasonably be expected to benefit, directly or indirectly, the Guarantor;

     NOW, THEREFORE, in order to induce the Lender to enter into the Credit Agreement, in consideration of the premises and for other good and valuable consideration, the receipt of which is hereby acknowledged, the Guarantor agrees as follows:

     1. The Guarantor, as primary obligor and not as surety, hereby irrevocably and unconditionally guarantees, independently of the Borrowers, to the Lender the due and punctual payment when due by any Borrower of all amounts now or hereafter owed by any Borrower to the Lender including, without limitation, the Obligations and all other amounts payable under the Credit Agreement, the Note and the other Loan Documents to which any Borrower is a party, whether principal, interest or other amounts, including, without limitation, attorneys’ fees and costs of collection. The obligations of the Borrowers guaranteed hereby and described in the preceding sentence are hereinafter referred to as the “Payment Obligations”. The Guarantor, as primary obligor and not merely as surety, also hereby irrevocably and unconditionally guarantees, independently of the Borrowers, to the Lender the complete observance, fulfillment and performance by the Borrowers of all the terms and conditions of the Credit Agreement and all other Loan Documents to which any Borrower is or will be a party. The obligations of the Borrowers guaranteed

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hereby and described in the immediately preceding sentence are hereinafter referred to as the “Performance Obligations”.

     2. The Guarantor hereby agrees that in the event that any Borrower fails to pay any Payment Obligations or any Borrower fails to perform any Performance Obligations for any reason (including, without limitation, the liquidation, dissolution, receivership, insolvency, bankruptcy, assignment for the benefit of creditors, reorganization, arrangement, composition or readjustment of, or other similar proceedings affecting the status, existence, assets or obligations of any Borrower, or the disaffirmance by any Borrower in any such proceeding of any Loan Document to which any Borrower is a party), the Guarantor will pay such Payment Obligations and perform such Performance Obligations within five (5) days (the “Due Date”) following the date on which written demand is made by the Lender.

     3. The obligations of the Guarantor hereunder shall not be affected by (i) the genuineness, validity, regularity or enforceability of any Borrower’s obligations under the Credit Agreement, the Note or any other Loan Document or any other document to which any Borrower is a party, or (ii) any amendment, waiver or other modification of the Credit Agreement, the Note or any other Loan Document or other document given or executed with or without the consent of the Guarantor, or (iii) any priority or preference to which any other obligations of any Borrower may be entitled over any Borrower’s obligations under the Credit Agreement, the Note or any other Loan Document or other document to which any Borrower is a party, or (iv) the release of any collateral or guaranty now or hereafter securing the Payment Obligations or the Performance Obligations, or (v) to the fullest extent permitted by applicable law, any other circumstance which might otherwise constitute a legal or equitable defense to or discharge of the obligations of a surety or guarantor. This Guaranty shall continue to be effective or be automatically reinstated, as the case may be, if, for any reason, any payment by or on behalf of any Borrower shall be rescinded or must otherwise be restored, whether as a result of proceedings in bankruptcy or reorganization of any Borrower or otherwise, and the Guarantor guarantees, absolutely, irrevocably and unconditionally that all payments made by or on behalf of any Borrower in respect of its obligations under the Credit Agreement, the Note and the other Loan Documents will, when made, be final.

     4. This Guaranty is a continuing guaranty and shall constitute a guaranty of payment and not of collection. The Guarantor specifically agrees that it shall not be necessary or required, and that the Guarantor shall not be entitled to require, that the Lender (i) file suit or proceed to obtain or assert a claim for personal judgment against any Borrower for the Payment Obligations or the Performance Obligations, or ( ii) make any effort at a collection or enforcement of the Payment Obligations or the Performance Obligations from any Borrower, or (iii) foreclose against or seek to realize by suit or other process from any collateral pledged as security for the Payment Obligations or the Performance Obligations, or (iv) file suit or proceed to obtain or assert a claim for personal judgment against any other Person liable for the Payment Obligations or the Performance Obligations, or (v) make any effort at collection or enforcement of the Payment Obligations or the Performance Obligations from any such other Person, or (vi) exercise or assert any other right or remedy to which the Lender is or may be entitled in connection with the Payment Obligations or the Performance Obligations or any security or other guaranty therefor, or (vii) assert or file any claim against the assets of any Borrower or any other guarantor or other Person liable for the Payment Obligations or the Performance Obligations, or any part thereof, before or as a condition of enforcing

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the liability of the Guarantor under this Guaranty or requiring payment of said Payment Obligations or the performance of the Performance Obligations by the Guarantor hereunder, or at any time thereafter.

     5. The Guarantor waives notice of the acceptance of this Guaranty and of the performance or nonperformance by any Borrower, demand for payment or performance from any Borrower, or any other Person and notice of nonpayment or failure to perform on the part of any Borrower and all demands whatsoever, other than the demand for payment hereunder provided for in paragraph 2 hereof. To the extent allowed by applicable law, the Guarantor expressly waives and relinquishes all rights and remedies now or hereafter accorded by applicable law to guarantors and sureties, including, without limitation, any defense, right of offset or setoff, or other claim which Guarantor may have against any Borrower or the Lender or which any Borrower may have against the Lender or the holder of the Note.

     6. No amendment of or supplement to this Guaranty, or waiver or modification of or consent under the terms hereof, shall be effective unless evidenced by an instrument in writing signed by the Guarantor and the Le