INTERCREDITOR AGREEMENT

THIS INTERCREDITOR AGREEMENT (this “Agreement”), dated as of September 19, 2008, is by and among (a) Viking Asset Management, LLC, a California limited liability company, as Bridge Agent (as defined below), (b) the Bridge Buyers (as defined below), (c) Viking Asset Management, LLC, a California limited liability company, as Initial Purchase Agent (as defined below), and (d) the Initial Buyers (as defined below).

A.   South Texas Oil Company, a Nevada corporation (together with its successors and assigns and any receiver, trustee or debtor-in-possession on its behalf or on behalf of any successor or assign, the “Borrower”), and the Bridge Buyers have entered into that certain Securities Purchase Agreement dated as of the date hereof (as amended, restated, supplemented, refinanced or otherwise modified from time to time as permitted hereunder, the “Bridge Purchase Agreement”), pursuant to which the Bridge Buyers made loans to Borrower secured by liens on and security interests in substantially all of the assets and properties of Borrower and the Obligors (as defined herein).

B.   Borrower and Initial Buyers have entered into that certain Securities Purchase Agreement dated as of April 1, 2008 (as amended, restated, refinanced, supplemented or otherwise modified from time to time as permitted hereunder, the “Initial Purchase Agreement”), pursuant to which Initial Buyers made loans to Borrower secured by liens on and security interests in substantially all of the assets and properties of Borrower and the Obligors.

C.   Bridge Agent, on behalf of itself and the Bridge Buyers, the Bridge Buyers, the Initial Purchase Agent, on behalf of itself and the Initial Buyers, and the Initial Buyers, desire to enter into this Agreement to, among other things, (i) confirm the relative priorities of the Liens (as defined herein) of Bridge Agent, on behalf of itself and the Bridge Buyers, and Initial Purchase Agent, on behalf of itself and the Initial Buyers, in the assets and properties of Borrower and the Obligors, and (ii) provide for the orderly sharing among them, in accordance with such priorities, of the Proceeds of such assets and properties upon any foreclosure thereon or other disposition thereof.

In consideration of the mutual benefits accruing to Bridge Agent, the Bridge Buyers, Initial Purchase Agent and the Initial Buyers hereunder and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto do hereby agree as follows:

Section 1.   DEFINITIONS

All terms defined in the Uniform Commercial Code as in effect in the State of New York, unless otherwise defined herein, shall have the meanings set forth therein, and all other capitalized terms used herein but not defined shall have the meanings set forth in the Bridge Purchase Agreement. In addition, as used in this Agreement (including in the preamble and recitals above), the following terms shall have the meanings ascribed to them below (all

references to any term in the plural shall include the singular and all references to any term in the singular shall include the plural):

“Bankruptcy Code” shall mean Title 11 of the United States Code entitled “Bankruptcy,” as now and hereafter in effect, or any successor statute.

“Bridge Agent” shall mean Viking Asset Management, LLC, a California limited liability company, in its capacity as collateral agent for the Bridge Buyers, and its successors and assigns in such capacity.

“Bridge Buyer” shall mean (a) each “Buyer” party to the Bridge Purchase Agreement, (b) each holder of a Bridge Note (as defined in the Bridge Purchase Agreement) and (c) each other holder of all or any portion of the Bridge Debt, and their respective successors and assigns, in each case in their capacities as such (including any other lender or group of lenders that at any time succeeds to or refinances, replaces or substitutes for all or any portion of the Bridge Debt at any time and from time to time).

“Bridge Debt” shall mean any and all obligations, liabilities and indebtedness of every kind, nature and description owing by Borrower or any Obligor to the Bridge Agent and/or any Bridge Buyer evidenced by or arising under the Bridge Purchase Documents, whether direct or indirect, absolute or contingent, joint or several, due or not due, primary or secondary, liquidated or unliquidated, including principal, interest, charges, fees, costs, indemnities and expenses, however evidenced, whether as principal, surety, endorser, guarantor or otherwise, whether now existing or hereafter arising, whether arising during or after the initial or any renewal term of the Bridge Purchase Documents or after the commencement of any Insolvency Proceeding with respect to Borrower or any Obligor (and including, without limitation, the payment of interest, fees, costs and other charges which would accrue and become due but for the commencement of such Insolvency Proceeding whether or not such amount is allowed or allowable in whole or in part in any such Insolvency Proceeding), and in each case, whether or not allowed or allowable in an Insolvency Proceeding.

“Bridge Default” shall mean a Default under any Bridge Purchase Document.

“Bridge Purchase Documents” shall mean the Bridge Purchase Agreement, the Bridge Notes, each of the Bridge Security Documents (as defined in the Bridge Purchase Agreement), the Conveyances of Limited Overriding Royalty Interests (as defined in the Bridge Purchase Agreement), this Agreement and all other agreements, documents and instruments at any time executed and/or delivered by Borrower or any Obligor or any other Person with, to or in favor of Bridge Agent or any Bridge Buyer in connection therewith or related thereto, as all of the foregoing now exist or may hereafter be amended, modified, supplemented, extended, replaced, renewed, refinanced or restated, except in violation of Section 2.9 hereof.

“Business Day” shall mean any day other than a Saturday, Sunday or other day on which commercial banks in New York, New York are authorized or required by law to close.

“Buyer Party” and “Buyer Parties” shall mean, individually or collectively as the context may require, Bridge Agent, the Bridge Buyers, Initial Purchase Agent and the Initial Buyers, and their respective successors and assigns. -!

“Cash Proceeds” shall mean all Proceeds of any Collateral received by any Grantor or Buyer Party consisting of cash, checks or the like.

“Collateral” shall mean all assets and properties of any kind whatsoever, real or personal, tangible or intangible and wherever located, whether now owned or hereafter acquired, of Borrower or any Obligor on which a Lien is granted under any of the Purchase Documents.

“Default” shall mean an “Event of Default” or similar term, as such terms are defined in the Bridge Notes, and an “Event of Default” or similar term, as such terms are defined in the Notes (as defined in the Initial Purchase Agreement), so long as any such Purchase Document is in effect.

“Discharge of Bridge Debt” shall mean the payment in full in cash or any other form of consideration that is expressly acceptable to each Bridge Buyer (provided that the acceptance in any one instance by a Bridge Buyer of such other form of consideration shall not be deemed to be a waiver or relinquishment of such Bridge Buyer’s right to decline such other form of consideration at any other time) of the Bridge Debt (other than contingent indemnification obligations to the extent no claim giving rise thereto has been asserted). If after receipt of any payment of, or Proceeds applied to the payment of, the Bridge Debt, Bridge Agent or any Bridge Buyer is required to surrender or return such payment or Proceeds to any Person for any reason, then the Bridge Debt intended to be satisfied by such payment or Proceeds shall be reinstated and continue and this Agreement shall continue in full force and effect as if such payment or Proceeds had not been received by Bridge Agent or any Bridge Buyer, as the case may be, and no Discharge of Bridge Debt shall be deemed to have occurred.

“Discharge of Initial Purchase Debt” shall mean the payment in full in cash or any other form of consideration that is expressly acceptable to each Initial Buyer (provided that the acceptance in any one instance by an Initial Buyer of such other form of consideration shall not be deemed to be a waiver or relinquishment of such Initial Buyer’s right to decline such other form of consideration at any other time) of the Initial Purchase Debt (other than contingent indemnification obligations to the extent no claim giving rise thereto has been asserted). If after receipt of any payment of, or Proceeds applied to the payment of, the Initial Purchase Debt, Initial Purchase Agent or any Initial Buyer is required to surrender or return such payment or Proceeds to any person for any reason, then the Initial Purchase Debt intended to be satisfied by such payment or Proceeds shall be reinstated and continue and this Agreement shall continue in full force and effect as if such payment or Proceeds had not been received by Initial Purchase Agent or any Initial Buyer, as the case may be, and no Discharge of Initial Purchase Debt shall be deemed to have occurred.

“Discharge of Senior Debt” shall mean the payment in full in cash of the Senior Debt (other than contingent indemnification obligations to the extent no claim giving rise thereto has been asserted). If after receipt of any payment of, or Proceeds applied to the payment of, the Senior Debt, any holder of Senior Debt is required to surrender or return such payment or Proceeds to any Person for any reason, then the Senior Debt intended to be satisfied by such payment or Proceeds shall be reinstated and continue and this Agreement shall continue in full force and effect as if such payment or Proceeds had not been received by such holder of Senior Debt, and no Discharge of Senior Debt shall be deemed to have occurred.

“Enforcement Action” shall mean (i) the exercise of any rights and remedies in respect of the Collateral by the applicable Buyer Party or Buyer Parties (other than demand for payment of any Bridge Debt or Initial Purchase Debt or acceleration thereof), (ii) any action by any Buyer Party to foreclose on the Lien of such Person in any Collateral, (iii) any action by any Buyer Party to take possession of, sell or otherwise realize (judicially or non-judicially) upon any Collateral (including, without limitation, by setoff or notification of account debtors), and/or (iv) the commencement by any Buyer Party of any legal proceedings against or with respect to any Collateral to facilitate the actions described in clauses (i) through (iii) above, including the commencement of any Insolvency Proceeding. In addition, solely with respect to Initial Purchase Debt held by Initial Buyers other than Marquis, “Enforcement Action” shall also mean (a) taking from or for the account of any Obligor or any Person, by set-off or in any other manner, the whole or any part of any moneys which may now or hereafter be owing by such Obligor with respect to such portion of the Initial Purchase Debt, (b) suing for payment of, or initiating or participating with others in any suit, action or proceeding against any Obligor to (1) enforce payment of or to collect the whole or any part of such portion of the Initial Purchase Debt or (2) commence judicial enforcement of any of the rights and remedies under the Initial Purchase Documents or applicable law with respect to such portion of the Initial Purchase Debt, including, without limitation, commencing an Insolvency Proceeding, (c) accelerating such portion of the Initial Purchase Debt, (d) exercising any put option or to cause any Obligor to honor any redemption or mandatory prepayment obligation under any Initial Purchase Document, (d) notifying account debtors or directly collect accounts receivable or other payment rights of any Obligor, or (e) exercising in any other manner any remedies with respect to such portion of the Initial Purchase Debt set forth in any Initial Purchase Document or that otherwise might be available to such Initial Buyer at law, in equity, pursuant to judicial proceeding or otherwise.

“Grantors” shall mean Borrower and each Obligor.

“Initial Buyer” shall mean each “Buyer” party to the Initial Purchase Agreement, each holder of a Note (as defined in the Initial Purchase Agreement) and each other holder of all or any portion of the Initial Purchase Debt, and their respective successors and assigns, in each case in their capacities as such (including any other lender or group of lenders that at any time succeeds to or refinances, replaces or substitutes for all or any portion of the Initial Purchase Debt at any time and from time to time).

“Initial Purchase Agent” shall mean Viking Asset Management, LLC, a California limited liability company, in its capacity as collateral agent for the Initial Buyers, and its successors and assigns in such capacity.

“Initial Purchase Debt” shall mean any and all obligations, liabilities and indebtedness of every kind, nature and description owing by Borrower or any Obligor to Initial Purchase Agent and/or any Initial Buyer evidenced by or arising under the Initial Purchase Documents, whether direct or indirect, absolute or contingent, joint or several, due or not due, primary or secondary, liquidated or unliquidated, including principal, interest, charges, fees, costs, indemnities and expenses, however evidenced, whether as principal, surety, endorser, guarantor or otherwise, whether now existing or hereafter arising, whether arising before, during or after the initial or any renewal term of the Initial Purchase Documents or after the commencement of any

Insolvency Proceeding with respect to Borrower or any Obligor (and including, without limitation, the payment of interest, fees, costs and other charges which would accrue and become due but for the commencement of such Insolvency Proceeding, whether or not such amount is allowed or allowable in whole or in part in any such Insolvency Proceeding), and in each case, whether or not allowed or allowable in an Insolvency Proceeding.

“Initial Purchase Default” shall mean a Default under any Initial Purchase Document.

“Initial Purchase Documents” shall mean the Initial Purchase Agreement, the Notes, the Warrants (as defined in the Initial Purchase Agreement), the Replacement Override Conveyances (as defined in the Initial Purchase Agreement) and all agreements, documents and instruments at any time executed and/or delivered by a Borrower or any Obligor or any other Person with, to or in favor of the Initial Buyers and/or Initial Purchase Agent in connection therewith or related thereto, as all of the foregoing now exist or may hereafter be amended, modified, supplemented, extended, replaced, renewed, refinanced or restated, except in violation of Section 2.9 hereof.

“Insolvency Proceeding” shall mean, as to any Person, any insolvency, bankruptcy, receivership, custodianship, liquidation, dissolution, reorganization, assignment for the benefit of creditors or other proceeding for the liquidation, dissolution or other winding up of any Grantor or any of its Subsidiaries or any of their respective properties.

“Lien” shall mean any mortgage or deed of trust, pledge, hypothecation, assignment, deposit arrangement, lien, charge, claim, security interest, easement or encumbrance, or preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever (including any lease or title retention agreement, any financing lease having substantially the same economic effect as any of the foregoing, and the filing of, or agreement to give, any financing statement perfecting a security interest under the UCC or comparable law of any jurisdiction).

“Marquis” shall mean Longview Marquis Master Fund, L.P., British Virgin Islands limited partnership, and its successors and assigns.

“Obligors” shall mean, individually and collectively, any Person (other than Borrower) liable on or in respect of the Initial Purchase Debt or the Bridge Debt, and each of their successors and assigns, including, without limitation, a receiver, trustee or debtor-in-possession on behalf of such Person or on behalf of any such successor or assign.

“Person” shall mean any individual, sole proprietorship, partnership, joint venture, trust, unincorporated organization, association, corporation, limited liability company, institution, public benefit corporation, or other entity or governmental unit (whether federal, state, county, city, municipal, local, foreign, or otherwise, including any instrumentality, division, agency, body or department thereof).

“Proceeds” shall mean "proceeds" as defined in Article 9 of the UCC as in effect in the state of New York on the date hereof with respect to Collateral, including any payment or property received on account of any secured claim in any Insolvency Proceeding.

“Purchase Documents” shall mean, collectively, the Bridge Purchase Documents and the Initial Purchase Documents.

“Senior Debt” shall mean the Bridge Debt and all Initial Purchase Debt held by Marquis and any future holder in replacement thereof.

“Subsidiary” shall mean, with respect to any Person, (i) any corporation of which an aggregate of more than fifty percent (50%) of the outstanding equity securities having ordinary voting power to elect a majority of the governing body of such corporation (irrespective of whether, at the time, equity securities of any other class or classes of such corporation shall have or might have voting power by reason of the happening of any contingency) is at the time, directly or indirectly, owned legally or beneficially by such Person and/or one or more Subsidiaries of such Person, or with respect to which any such Person has the right to vote or designate the vote of fifty percent (50%) or more of such equity securities whether by proxy, agreement, operation of law or otherwise, and (ii) any partnership or limited liability company in which such Person and/or one or more Subsidiaries of such Person shall have an interest (whether in the form of voting or participation in profits or capital contribution) of more than fifty percent (50%) or of which any such Person is a general partner or may exercise the powers of a general partner.

“UCC” shall mean the Uniform Commercial Code, as amended and in effect in any applicable jurisdiction.

Section 2.   PAYMENTS; SECURITY INTERESTS; PRIORITIES; REMEDIES

2.1   Priorities .

(a)   The Bridge Agent, for itself and on behalf of the Bridge Buyers, hereby acknowledges that the Initial Purchase Agent, for the benefit of itself and the Initial Buyers, has been granted Liens upon all of the Collateral pursuant to the Initial Purchase Documents to secure the Initial Purchase Debt. The Initial Purchase Agent, for itself and on behalf of the Initial Buyers, hereby acknowledges that the Bridge Agent, for the benefit of itself and the Bridge Buyers, has been granted Liens upon all of the Collateral pursuant to the Bridge Purchase Documents to secure the Bridge Debt.

(b)   Notwithstanding the order or time of attachment, or the order, time or manner of perfection, or the order or time of filing or recordation of any document or instrument, or other method of perfecting a Lien in favor of a Buyer Party in any Collateral, and notwithstanding any conflicting terms or conditions which may be contained in any of the Purchase Documents, the Liens of Bridge Agent upon the Collateral have and shall have priority over the Liens of Initial Purchase Agent upon the Collateral (and such Liens of Initial Purchase Agent are and shall be junior and subordinate to the Liens of Bridge Agent upon the Collateral). The priorities given to the Liens of Bridge Agent upon the Collateral pursuant to this Section 2.1(b) and the terms of this Agreement shall continue to govern the relative rights and priorities of Bridge Agent and the Bridge Buyers, on the one hand, and Initial Purchase Agent and the Initial Buyers, on the other hand, even if all or any part of the Liens in favor of a Buyer Party are subordinated, avoided, disallowed, unperfected, set aside or otherwise invalidated,

whether pursuant to an Insolvency Proceeding, any other judicial proceeding or otherwise, and this Agreement shall be reinstated if at any time any payment of any of the Bridge Debt is rescinded or must be returned by any holder thereof or any representative of such holder.

(c)   Each Buyer Party shall be solely responsible for perfecting and maintaining the perfection of its Lien in and to each item constituting the Collateral in which such Buyer Party has been granted a Lien. The foregoing provisions of this Agreement are intended solely to govern the respective Lien priorities as between the Buyer Parties and shall not impose on any Buyer Party any obligations in respect of the disposition of Proceeds of any Collateral which would conflict with prior perfected claims therein in favor of any other Person or any order or decree of any court or governmental authority or any applicable law. The Initial Purchase Agent, on behalf of itself and the Initial Buyers, agrees that it and they will not object to or contest, in any proceeding (including, without limitation, an Insolvency Proceeding) or otherwise, the validity, extent, perfection, priority or enforceability of the Liens of the Bridge Agent, for the benefit of itself and the Bridge Buyers, upon the Collateral; provided , that the foregoing is not intended and shall not be deemed or construed to limit the ability of the Initial Purchase Agent or any of the Initial Buyers to enforce the terms and provisions of this Agreement. The Bridge Agent, on behalf of itself and the Bridge Buyers, agrees that it and they will not object to or contest, in any proceeding (including, without limitation, an Insolvency Proceeding) or otherwise, the validity, extent, perfection, priority or enforceability of the Liens of the Initial Purchase Agent, on behalf of itself and the Initial Buyers, upon the Collateral; provided , that the foregoing is not intended and shall not be deemed or construed to limit the ability of the Bridge Agent or any of the Bridge Buyers to enforce the terms and provisions of this Agreement.

(d)   Notwithstanding anything to the contrary contained in the Initial Purchase Documents, until the Discharge of Senior Debt, in no event shall Initial Purchase Agent or the Initial Buyers be permitted to receive or retain any cash payment of principal, interest, fees, costs, expenses or other amounts on account of the Initial Purchase Debt unless such payment is made solely on account of Senior Debt (and made or delivered to the applicable holder of Senior Debt). No Default shall be deemed to exist under any Initial Purchase Document as a result of the operation of this Section 2.1(d). This Section 2.1(d) shall not apply to any cash payment of principal, interest, fees, costs, expenses or other amounts received prior to the effective date of this Agreement on account of the Initial Purchase Debt.

2.2   No Alteration . The priorities of the Liens provided in this Agreement shall not be altered or otherwise affected by (a) any amendment, modification, supplement, extension, renewal, restatement, replacement or refinancing of the Bridge Debt or the Initial Purchase Debt, nor (b) any action or inaction which any of the Buyer Parties may take or fail to take in respect of the Collateral. The parties hereto acknowledge and agree that it is their intention that the Collateral securing the Bridge Debt and the Collateral securing the Initial Purchase Debt as of the date hereof be identical in all material respects and, in furtherance of such intent, the parties hereto agree: (a) to cooperate in good faith in order to determine, upon any request by the Bridge Agent or the Initial Purchase Agent, the specific assets included in the Collateral securing their respective obligations, the steps taken to perfect the Liens thereon and the identity of the respective parties obligated under any Purchase Document, and (b) any Lien obtained by any

Buyer Party in respect of any judgment obtained in respect of any obligations shall be subject in all respects to the terms of this Agreement.

2.3   Application of Proceeds . All Proceeds of Collateral received by any Buyer Party shall be distributed (a) first, to Bridge Agent, for application to the Bridge Debt, as a permanent repayment thereof, in accordance with the terms of the Bridge Purchase Documents as in effect on the date hereof, until the Discharge of Bridge Debt, (b) second, to Initial Purchase Agent, for application to the Initial Purchase Debt that constitutes Senior Debt, until the Discharge of Senior Debt, (c) third, to Initial Purchase Agent, for application to the remaining Initial Purchase Debt, until the Discharge of Initial Purchase Debt and (d) fourth, to the Person legally entitled thereto.

2.4   Insurance and Condemnation Awards . Each Buyer Party agrees that any Collateral or Proceeds thereof or payment with respect thereto received by any Buyer Party in connection with any insurance policy claim or any condemnation award (or deed in lieu of condemnation) with respect to Collateral, shall be promptly transferred or paid over to the applicable Buyer Party entitled thereto in accordance with Section 2.3 for application to the Bridge Debt or Initial Purchase Debt, as applicable, in accordance with Section 2.3, in the same form as received and with any necessary endorsements or assignments or as a court of competent jurisdiction may otherwise direct. Until the Discharge of Senior Debt, the holders of Senior Debt shall have the sole and exclusive right, subject to the rights of the Borrower and Obligors under the applicable Purchase Documents, to adjust settlement of insurance claims in the event of any cove