SENIOR NOTE

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS OR (B) AN OPINION OF COUNSEL, IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR APPLICABLE STATE SECURITIES LAWS OR (II) UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES. ANY TRANSFEREE OF THIS NOTE SHOULD CAREFULLY REVIEW THE TERMS OF THIS NOTE, INCLUDING SECTION 5 HEREOF. THE PRINCIPAL AMOUNT REPRESENTED BY THIS NOTE MAY BE LESS THAN THE AMOUNTS SET FORTH ON THE FACE HEREOF PURSUANT TO SECTION 5 HEREOF.

Issuance Date: September 19, 2008

FOR VALUE RECEIVED, SOUTH TEXAS OIL COMPANY ,   a Nevada corporation (the “ Company ”), hereby promises to pay to Longview Marquis Master Fund, L.P., a British Virgin Islands limited partnership,   or its registered assigns (the “ Holder ”), the principal amount of Seven Million and 00/100 United States   Dollars ($7,000,000), when due, whether upon maturity, acceleration, redemption or otherwise, and to pay interest (“ Interest ”) on the unpaid principal balance hereof on each Interest Payment Date (as defined in the Appendix hereto) and upon maturity, or earlier upon acceleration or prepayment pursuant to the terms hereof, from (and including) the Issuance Date (as defined in the Appendix hereto) through and including the Maturity Date at the Applicable Interest Rate (as defined in the Appendix hereto). Interest on this Note is payable on each Interest Payment Date and upon maturity, if applicable, or if earlier, upon acceleration or redemption pursuant to the terms hereof, and such Interest shall accrue from and after the Issuance Date and shall be computed on the basis of a 365-day   year and actual days elapsed. Interest shall be payable in cash in accordance with the foregoing sentence and Section 7 .

This Note is being issued in connection with the Securities Purchase Agreement (as defined in the Appendix hereto).

(1)   Certain Defined Terms . Each capitalized term used and not otherwise defined in this Note shall have the meaning ascribed to such term in the Appendix hereto (or incorporated by reference therein), and the meaning of each such term is incorporated herein by this reference.

(2)   Payments of Principal and Interest . All payments under this Note shall be made in lawful money of the United States of America by wire transfer of immediately available funds to such account as the Holder may from time to time designate by written notice to the Company in accordance with the provisions of this Note. Interest shall be paid quarterly in arrears on each Interest Payment Date   and on the Maturity Date. Any amount that is not paid when due shall bear interest at the Default Rate from the date such amount is initially due until the same is paid in full. Whenever any amount expressed to be due by the terms of this Note is due on any day that is not a Business Day, the same shall be due instead on the next succeeding Business Day and interest thereon shall be payable at the Applicable Interest Rate.

(3)   Principal Payments .

(a)   On the Maturity Date . Subject to Section 3(c) hereof, if any Principal remains outstanding on the Maturity Date, then the Holder shall surrender this Note, duly endorsed for cancellation to the Company, and such Principal shall be redeemed by the Company as of the Maturity Date by payment on the Maturity Date, respectively, to the Holder, by wire transfer of immediately available funds, of an amount equal to the result of (i) such Principal and the related Interest Amount less (ii) any of Principal and the Interest Amount with respect thereto converted into Option Shares pursuant to the Investor Share Option pursuant to Section 3(c) , together with all other amounts payable under this Note or the Securities Purchase Agreement.

(b)   Optional Early Redemption by the Company .

(i)   General . At any time, and from time to time, after the Issuance Date, the Company shall have the right to redeem some or all of the Principal (a “ Company Early Redemption ”) by delivering to the Holder written notice (the “ Company Early Redemption Notice ”) at least five (5) Business Days prior to the date selected by the Company for such Company Early Redemption (the date so selected, the “ Company Early Redemption Date ”). Any Company Early Redemption shall be for an amount in cash equal to the sum of (such sum, the “ Aggregate Early Redemption Amount ”):

(A)   the Principal then being redeemed and prepaid by the Company on the Company Early Redemption Date pursuant to this Section 3(b) (the “ Early Redemption Principal Amount ”); and

(B)   the Interest Amount with respect to such Early Redemption Principal Amount as of the applicable prepayment date (the “ Early Redemption Interest Amount ” and together with any Early Redemption Principal Amount, the “ Early Redemption Principal and Interest Amount ”).

The Company Early Redemption Notice shall state:

(A)   the Company Early Redemption Date;

(B)   the Aggregate Early Redemption Amount; and

(C)   that the Company is simultaneously redeeming the same percentage of the outstanding principal balance of each Other Bridge Note.

For purposes hereof, any Bridge Notes having the same Issuance Date shall be deemed to be the same “ Series ”). A Company Early Redemption Notice shall be irrevocable by the Company. The failure of the Company to pay the Aggregate Early Redemption Amount in full on the Company Early Redemption Date stated in such notice shall constitute an Event of Default. Any portion of the Aggregate Early Redemption Amount not paid on the Company Early Redemption Date shall bear interest at the Default Rate until paid in full.

(ii)   Mechanics of Company Early Redemption . If the Company has delivered a Company Early Redemption Notice in accordance with Section 3(b)(i) , then, on the Company Early Redemption Date, the Company shall pay the result of (A) the Aggregate Early Redemption Amount, less (B) any of Principal and the Interest Amount with respect thereto converted into Option Shares pursuant to the Investor Share Option pursuant to Section 3(c) , in cash by wire transfer of immediately available funds to an account designated by the Holder. Notwithstanding anything contained herein to the contrary, (A) the Company shall not effect any Company Early Redemption unless it is simultaneously redeeming the same percentage of the outstanding principal balance of each Other Bridge Note of the same Series as this Note, and (B) no Company Early Redemption Notice shall contain any material non-public information regarding the Company or any of the Subsidiaries.

(c)   Holder’s Conversion Right . This Note shall be converted into Shares on the terms and conditions set forth in this Section 3(c) .

(i)   Conversion at Option of the Holder . Subject to the provisions of Section 6 , in connection with the payment of Principal (and the Interest Amount relating thereto) in connection with any Company Early Redemption or on the Maturity Date, the Holder shall be entitled to convert up to fifty percent (50%) of the Principal (and the Interest Amount relating thereto) to be paid on the Company Early Redemption Date or Maturity Date, as applicable, into fully paid and nonassessable shares of Common Stock in accordance with this Section 3(c) (the “ Investor Share Option ”), at the Conversion Price. The Company shall not issue any fraction of a share of Common Stock upon any conversion. If the issuance would result in the issuance of a fraction of a share of Common Stock, then the Company shall round such fraction up or down to the nearest whole share (with 0.5 rounded up).

(ii)   Mechanics of Conversion . The conversion of this Note shall be conducted in the following manner:

(A)   Holder’s Delivery Requirements . To convert an amount of Principal (and the Interest Amount relating thereto) (any such amount, the “ Conversion Amount ”), representing up to fifty percent (50%) of the Principal

(and the Interest Amount relating thereto) to be paid on any Company Early Redemption Date or Maturity Date, as applicable, into shares of Common Stock (such Company Early Redemption Date or Maturity Date, as applicable, the “ Conversion Date ”), the Holder shall transmit by facsimile (or otherwise deliver), for receipt on or prior to the date that is two (2) Business Day prior to the Conversion Date, a copy of an executed conversion notice in the form attached hereto as Exhibit I (the “ Conversion Notice ”).

(B)   Company’s Response . Upon receipt or deemed receipt by the Company of a copy of a Conversion Notice, the Company (I) shall immediately send, via facsimile, a confirmation of receipt of such Conversion Notice to the Holder and the Company’s designated transfer agent (the “ Transfer Agent ”), which confirmation shall constitute an instruction to the Transfer Agent to process such Conversion Notice in accordance with the terms herein and (II) on the Conversion   Date (A) provided that the Transfer Agent is participating in the DTC’s Fast Automated Securities Transfer Program and provided that the Holder is eligible to receive shares of Common Stock through the DTC, credit such aggregate number of shares of Common Stock to which the Holder shall be entitled to the Holder’s or its designee’s balance account with the DTC through its Deposit Withdrawal Agent Commission system, or (B) if the foregoing shall not apply, issue and deliver to the address as specified in the Conversion Notice, a certificate, registered in the name of the Holder or its designee, for the number of shares of Common Stock to which the Holder shall be entitled.

(C)   Dispute Resolution . In the case of a dispute as to the determination of the Conversion Price, the Company shall instruct the Transfer Agent to issue to the Holder the shares of Common Stock representing the number of shares of Common Stock that is not disputed and shall transmit an explanation of the disputed determinations to the Holder via facsimile within two (2) Business Days of receipt or deemed receipt of the Holder’s Conversion Notice or other date of determination. If the Holder and the Company are unable to agree upon the determination of the Conversion Price within one (1) Business Day of such disputed determination or arithmetic calculation being transmitted to the Holder, then the Company shall promptly (and in any event within two (2) Business Days) submit via facsimile the disputed determination of the Conversion Price to an independent, reputable investment banking firm agreed to by the Company and the holders of the Bridge Notes representing at least two-thirds (2/3) of the aggregate principal amounts of the Bridge Notes then outstanding as to which such determination is being made. The Company shall direct the investment bank or the accountant, as the case may be, to perform the determinations or calculations and notify the Company and the Holder of the results no later than two (2) Business Days from the time it receives the disputed determinations or calculations. Such investment bank’s or accountant’s determination or calculation, as the case may be, shall be binding upon all parties absent demonstrable error.

(D)   Record Holder . The person or persons entitled to receive the shares of Common Stock issuable upon a conversion of this Note shall be treated for all purposes as the legal and record holder or holders of such shares of Common Stock on the Conversion Date.

(E)   Company’s Failure to Timely Convert .

(I)   Cash Damages . If within three (3) Business Days after the Company’s receipt of the facsimile copy of a Conversion Notice or deemed receipt of a Conversion Notice the Company shall fail to issue and deliver a certificate to the Holder for, or credit the Holder’s or its designee’s balance account with the DTC with, the number of shares of Common Stock to which the Holder is entitled upon the Holder’s conversion of any Conversion Amount, then in addition to all other available remedies that the Holder may pursue hereunder and under the Securities Purchase Agreement (including indemnification pursuant to Section 10 thereof or at law or in equity), the Company shall pay additional damages to the Holder for each day after Conversion Date such conversion is not timely effected in an amount equal to 0.5% of the sum of the product of (I) the number of shares of Common Stock not issued to the Holder or its designee on the Conversion Date and to which the Holder is entitled and (II) the Weighted Average Price of the Common Stock on the Conversion Date (such product is referred to herein as the “ Share Product Amount ”); provided that in no event shall cash damages accrue pursuant to this Section 3(c)(ii)(E)(I) ) with respect to the Share Product Amount during the period, if any, in which the Conversion Price is subject to a bona fide dispute that is subject to and being resolved pursuant to, and in compliance with the time periods and other provisions of, the dispute resolution provisions of Section 3(c)(ii)(C) , provided that the shares of Common Stock are delivered to the Holder within one (1) Business Day of the resolution of such bona fide dispute. Alternatively, subject to Section 3(c)(ii)(C) , at the election of the Holder made in the Holder’s sole discretion, the Company shall pay to the Holder, in lieu of the additional damages referred to in the preceding sentence (but in addition to all other available remedies that the Holder may pursue hereunder and under the Securities Purchase Agreement (including indemnification pursuant to Section 10 thereof or at law or in equity)), 110% of the amount by which (A) the Holder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock purchased to make delivery in satisfaction of a sale by the Holder of the shares of Common Stock to which the Holder is entitled but has not received upon a conversion exceeds (B) the net proceeds received by the Holder from the sale of the shares of Common Stock to which the Holder is entitled but has not received upon such conversion. If the Company fails to pay the additional damages set forth in this Section 3(c)(ii)(E)(I) within five (5) Business Days of the date incurred, then the Holder entitled to such payments shall have the right at any time, so long as the Company continues to fail to make such payments, to require the Company, upon written notice, to immediately issue, in lieu of such cash damages, the number of shares of Common Stock equal to the quotient of (X) the aggregate amount of the damages payments described herein divided by (Y) the Conversion Price in effect on such Conversion Date as specified by the Holder in the Conversion Notice.

(II)   Void Conversion Notice . If for any reason the Holder has not received all of the shares of Common Stock prior to the tenth (10th) Business Day after the Conversion Date with respect to a conversion of this Note, other than due to the limitation contained in Section 6 or to the pendency of a dispute being resolved in accordance

with Section 3(c)(ii)(C) (a “ Conversion Failure ”), then the Holder, upon written notice to the Company (a “ Void Conversion Notice ”), may void its Conversion Notice with respect to any portion of this Note that has not been converted pursuant to the Holder’s Conversion Notice; in which case the Company shall immediately redeem all of the Principal with respect to which the Company has not delivered shares of Common Stock, at a price equal to the greater of (a) the Principal and Interest Amount thereon, with respect to which the Company has not delivered shares of Common Stock and (b) the product of (i) the quotient of (A) the Principal and Interest Amount thereon, with respect to which the Company has not delivered shares of Common Stock, divided by (B) the Conversion Price, multiplied by (ii) the Weighted Average Price of the Common Stock on the Conversion Date. The voiding of the Holder’s Conversion Notice shall not affect the Company’s obligations to make any payments that have accrued prior to the date of such notice pursuant to Section 3(c)(ii)(E)(I) or otherwise

(F)   Pro Rata Conversion . In the event the Company receives a Conversion Notice from more than one holder of the Bridge Notes for the same Conversion Date and the Company can convert some, but not all, of such Bridge Notes, then the Company shall convert from each holder of the Bridge Notes electing to have Bridge Notes converted at such time a pro rata amount of such holder’s Bridge Note submitted for conversion based on the principal amount of the Bridge Note submitted for conversion on such date by such holder relative to the aggregate principal amount of the Bridge Notes submitted for conversion on such date.

(iii)   Adjustments to Conversion Price . The Conversion Price will be subject to adjustment from time to time as provided in this Section 3(c)(iii) .

(A)   Adjustment of Conversion Price upon Subdivision or Combination of Common Stock . If the Company at any time on or after the Issuance Date subdivides (by any stock split, stock dividend, recapitalization or otherwise) outstanding shares of Common Stock into a greater number of shares, the Conversion Price in effect immediately prior to such subdivision will be proportionately reduced. If the Company at any time on or after the Issuance Date combines (by combination, reverse stock split or otherwise) its outstanding shares of Common Stock into a smaller number of shares, the Conversion Price in effect immediately prior to such combination will be proportionately increased.

(B)   Adjustment of Conversion Price upon a Distribution of Assets . If the Company at any time on or after the Issuance Date shall declare or make any dividend or other distribution of its assets (or rights to acquire its assets) to holders of Common Stock, by way of return of capital or otherwise (including any distribution of cash, stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement or other similar transaction) (a “ Distribution ”), then, in each such case, the Conversion Price in effect immediately prior to the close of business on the record date fixed for the determination of holders of Common Stock entitled to receive the Distribution shall be reduced, effective as of the close of business on such record date, to a price determined by multiplying such Conversion Price by a fraction of which (A)

the numerator shall be the Weighted Average Price of the Common Stock on the trading day immediately preceding such record date minus the value of the Distribution (as determined in good faith by the board of directors of the Company) applicable to one share of Common Stock, and (B) the denominator shall be the Weighted Average Price of the Common Stock on the trading day immediately preceding such record date.

(C)   Other Events . If any event occurs of the type contemplated by the provisions of this Section 3(c)(iii) but not expressly provided for by such provisions, then the Company’s board of directors will make an appropriate adjustment in the Conversion Price so as to protect the rights of the Holder; provided that no such adjustment will increase the Conversion Price as otherwise determined pursuant to this Section 3(c)(iii) .

(D)   Notices . Promptly upon any adjustment of the Conversion Price, the Company will give written notice thereof to the Holder, setting forth in reasonable detail, and certifying, the calculation of such adjustment. The Company will give written notice to the Holder at least ten (10) Business Days prior to the date on which the Company closes its books or takes a record (I) with respect to any dividend or distribution upon the Common Stock, (II) with respect to any pro rata subscription offer to holders of Common Stock or (III) for determining rights to vote with respect to any Change of Control, dissolution or liquidation, provided that such information shall be made known to the public prior to or in conjunction with such notice being provided to the Holder. The Company will also give written notice to the Holder at least ten (10) Business Days prior to the date on which any Change of Control, dissolution or liquidation will take place, provided that such information shall be made known to the public prior to or in conjunction with such notice being provided to the Holder.

(4)   Reorganization, Reclassification, Consolidation, Merger or Sale . Any recapitalization, reorganization, reclassification, consolidation, merger, sale of all or substantially all of the Company’s assets to another Person or other transaction that is effected in such a way that holders of Common Stock are entitled to receive (either directly or upon subsequent liquidation) stock, securities or assets with respect to or in exchange for Common Stock is referred to herein as “ Organic Change .” Prior to the consummation of any (i) sale of all or substantially all of the Company’s assets to an acquiring Person (including, for the avoidance of any doubt, the sale of assets of its Subsidiaries) or (ii) other Organic Change following which the Company is not a surviving entity, the Company will secure from the Person purchasing such assets or the successor resulting from such Organic Change (in each case, the “ Acquiring Entity ”) a written agreement, in form and substance satisfactory to the holders representing at least a majority of the aggregate principal amount of the Bridge Notes then outstanding, to deliver to the Holder in exchange for this Note, a security of the Acquiring Entity evidenced by a written instrument substantially similar in form and substance to this Note and satisfactory to the holders representing at least a majority of the aggregate principal amount of the Bridge Notes then outstanding. Prior to the consummation of any other Organic Change, the Company shall make appropriate provision (in form and substance satisfactory to the holders representing at least a majority of the aggregate principal amount of the Bridge Notes then outstanding) to

ensure that the Holder will thereafter have the right to acquire and receive in lieu of or in addition to (as the case may be) the shares of Common Stock immediately theretofore acquirable and receivable upon the conversion of this Note (without regard to any limitations or restrictions on conversion) such shares of stock, securities or assets that would have been issued or payable in such Organic Change with respect to or in exchange for the number of shares of Common Stock that would have been acquirable and receivable upon the conversion of this Note as of the date of such Organic Change (without taking into account any limitations or restrictions on the conversion of this Note).

(5)   Surrender of Note . Notwithstanding anything to the contrary set forth in this Note, upon any redemption of the Principal of this Note in accordance with the terms hereof, the Holder shall not be required to physically surrender this Note to the Company unless all of the Principal is being repaid and the related Interest Amount and all other obligations payable under this Note (including any other amounts due under this Note) have been paid in full. The Register (as defined in Section 17 hereof) shall show the principal amount redeemed and the date(s) of such redemptions, so as not to require physical surrender of this Note upon each such redemption. The Holder and any assignee, by acceptance of this Note, acknowledge and agree that, by reason of the provisions of this paragraph, following redemption of any portion of this Note, the Principal may be less than the principal amount stated on the face hereof.

(6)   Limitation on Conversion . Notwithstanding anything to the contrary set forth in this Note, the Company shall not effect any conversion of this Note and the Holder shall not have the right to convert Principal or any Interest Amount in excess of that portion of the principal or any Interest Amount that, upon giving effect to such conversion, would cause the aggregate number of shares of Common Stock beneficially owned by the Holder and its affiliates to exceed 4.99% of the total outstanding shares of Common Stock following such conversion. For purposes of the foregoing proviso, the aggregate number of shares of Common Stock beneficially owned by the Holder and its affiliates shall include the shares of Common Stock issuable upon conversion of this Note, with respect to which the determination of such proviso is being made, but shall exclude the shares of Common Stock that would be issuable upon (i) conversion of the remaining, unconverted Principal and any Interest Amount with respect thereto beneficially owned by the Holder and its affiliates and (ii) exercise, conversion or exchange of the unexercised, unconverted or unexchanged portion of any other securities of the Company (including any warrants or convertible preferred stock) subject to a limitation on conversion, exercise or exchange analogous to the limitation contained herein beneficially owned by the Holder and its affiliates. Except as set forth in the preceding sentence, for purposes of this Section 6 , beneficial ownership shall be calculated in accordance with Section 13(d) of the 1934 Act. For purposes of this Section 6 , in determining the number of outstanding shares of Common Stock, the Holder may rely on the number of outstanding shares of Common Stock as reflected in (1) the Company’s most recent quarterly report on Form 10-Q, or annual report on Form 10-K, as the case may be, (2) a more recent public announcement by the Company or (3) any other notice by the Company or the transfer agent for the Common Stock setting forth the number of shares of Common Stock outstanding. Upon the written request of the Holder, the Company shall promptly, but in no event later than three (3) Business Days following the receipt of such request, confirm in writing to the Holder the number of shares of Common Stock then outstanding. In any case, the