REGISTRATION RIGHTS AGREEMENT

REGISTRATION RIGHTS AGREEMENT

REGISTRATION RIGHTS AGREEMENT (this " Agreement "), dated as of December 29, 2006, by and between TEKOIL & GAS CORPORATION , a Delaware corporation, with principal offices located at 5036 Dr. Phillips Blvd., Suite 232, Orlando, Florida 32819 (the " Company "), and MASTERS RESOURCES LLC and MASTERS OIL & GAS LLC, both Texas limited liability companies (referred to together as " Buyer ") with respective principal places of business at 9801 Westheirner, Suite 1070, Houston, Texas 77042, and each of Rich Holdings, LLC , a Texas limited liability company, and John W. Barton , individually (collectively, " Buyer’s Designees ").

PRELIMINARY STATEMENTS

A.   In connection with the Subscription Agreement by and between the parties of even date herewith (the " Securities Purchase Agreement "), the Company has agreed, upon the terms and subject to the conditions of the Securities Purchase Agreement, to issue to the Buyer shares of the Company’s common stock, par value $0.01 per share (the " Common Stock "); and

B. The Company has agreed to provide certain registration rights under the Securities Act of 1933, as amended, and the rules and regulations thereunder, or any similar successor statute (collectively, the " 1933 Act "), and applicable state securities laws; and

C. Buyer has designated each of Buyer’s Designees as the recipients of the Common Stock which is the subject of this Agreement; and

D. Buyer and Buyer’s Designees agree to be bound by the terms and provisions of this Agreement.

NOW, THEREFORE , in consideration of the premises and the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company, the Buyer and Buyer’s Designees hereby agree as follows:

1.   DEFINITIONS.

a. As used in this Agreement, the following terms shall have the following meanings:

(i)   " Investor " means Buyer’s Designees and any transferee or assignee thereof who agrees to become bound by the provisions of this Agreement in accordance with Section 9 hereof.

(ii)   " register ," " registered ," and " registration " refer to a registration effected by preparing and filing a Registration Statement or Statements in compliance with the 1933 Act and pursuant to Rule 415 under the 1933 Act or any successor rule providing for offering securities on a continuous basis (" Rule 415 "), and the declaration or ordering of effectiveness of such Registration Statement by the United States Securities and Exchange Commission (the " SEC ").

(iii)   " Registrable Securities " means the shares of Common Stock issued to Buyer’s Designees under the Securities Purchase Agreement.

(iv)   " Registration Period " means the period commencing on the date on which the Registration Statement filed pursuant to this Agreement is declared effective by the SEC and expiring on the date that (A) the Investor may sell all of the Registrable Securities without restriction pursuant to Rule 144 promulgated under the 1933 Act, or (B) the Investor has sold all of the Registrable Securities.

(v)   " Registration Statement " means a registration statement of the Company under the 1933 Act.

b.   Capitalized terms used herein and not otherwise defined herein shall have the respective meanings set forth in the Securities Purchase Agreement.

2.   REGISTRATION RIGHTS.

a. Mandatory Registration . The Company shall prepare and file with the SEC a Registration Statement on Form S-3 (or, if such form is unavailable for such a registration, on such other form as is available for such a registration) covering the resale of the Registrable Securities within 45 days of the date of Closing. The Registration Statement (and each amendment or supplement thereto, and each request for acceleration of effectiveness thereof) shall be provided to and approved by Buyer’s Designees and their counsel prior to its filing or other submission, such approval not to be unreasonably withheld. The Company will use its reasonable efforts to cause such Registration Statement to become effective within 120 days of filing. In the event such Registration Statement does not become effective within 180 days from the date of such filing, Investor shall have the right to put (by written demand and tender) the Registrable Securities or any portion thereof to the Company and the Company shall be obligated to repurchase the same (free and clear of all liens, claims and encumbrances) at a purchase price equal to the average per share trading price of the common stock of the Company (on the principal exchange or quotation media on which such common stock is traded or quoted) during the ten (10) day trading period ending immediately prior to the date of such demand and tender multiplied by the number of shares of common stock of the Company comprising Registrable Securities and included in such demand and tender, with payment and delivery to occur within ten (10) business days following such demand.

b. Piggy-Back Registrations . If at any time prior to filing a Registration Statement under this Agreement, the Company shall file with the SEC a Registration Statement relating to an offering for its own account or the account of others under the 1933 Act of any of its equity securities (other than on Form S-4 or Form S-8 or their then equivalents relating to equity securities to be issued solely in connection with any acquisition of any entity or business or equity securities issuable in connection with stock option or other employee benefit plans), the Company shall send to the Investor who is entitled to registration rights under this Section 2 written notice of the intended filing of such Registration Statement and, if within twenty (20) days after receipt of such notice, the Investor shall so request in writing, the Company shall include in such Registration Statement all or any part of the Registrable Securities the Investor requests to be registered, except that if, in connection with any underwritten public offering for the account of the Company the managing underwriter(s) thereof shall impose a limitation on the number of shares of Common Stock which may be included in the Registration Statement because, in such underwriter(s)’ judgment, marketing or other factors dictate such limitation is necessary to facilitate public distribution, then the Company shall be obligated to include in such Registration Statement only a limited portion of the Registrable Securities with respect to which the Investor has requested inclusion hereunder, such portion to be determined as hereinafter provided; provided that no portion of the equity securities which the Company is offering for its own account shall be excluded; provided , further that the Company shall be entitled to exclude Registrable Securities to the extent necessary to avoid breaching obligations existing prior to the date hereof to other stockholders of the Company. Subject to the foregoing, the Company shall not exclude any Registrable Securities unless the Company has first excluded all outstanding securities, the holders of which are not entitled to inclusion of such securities in such Registration Statement or are not entitled to pro rata inclusion with the Registrable Securities, and, after giving effect to the immediately preceding clause, any exclusion of Registrable Securities shall be made pro rata with holders of other securities having the right to include such securities in the Registration Statement other than holders of securities entitled to inclusion of their securities in such Registration Statement by reason of demand registration rights. The obligations of the Company under this Section 2 may be waived by the Investor. If an offering in connection with which the Investor is entitled to registration under this Section 2. is an underwritten offering, then if the Investor’s Registrable Securities are included in such Registration Statement the Investor shall, unless otherwise agreed by the Company, offer and sell such Registrable Securities in an underwritten offering using the same underwriter or underwriters and, subject to the provisions of this Agreement, on the same terms and conditions as other shares of Common Stock included in such underwritten offering.

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3.   OBLIGATIONS OF THE COMPANY.

In connection with the registration of the Registrable Securities, the Company shall have the following obligations:

a. A Registration Statement filed pursuant to this Agreement (including any amendments or supplements thereto and prospectuses contained therein) shall not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein, or necessary to make the statements therein, in light of the circumstances in which they were made, not misleading.

b. The Company shall prepare and file with the SEC such amendments (including post-effective amendments) and supplements to the Registration Statement and the prospectus used in connection with the Registration Statement as may be necessary to keep the Registration Statement effective at all times during the Registration Period, and, during the Registration Period, comply with the provisions of the 1933 Act with respect to the disposition of all Registrable Securities of the Company covered by the Registration Statement until such time as all of such Registrable Securities have been disposed of in accordance with the intended methods of disposition by the seller or sellers thereof as set forth in the Registration Statement.

c.   The Company shall furnish to the Investor if its Registrable Securities are included in the Registration Statement and its legal counsel (i) promptly after the same is prepared and publicly distributed, filed with the SEC, or received by the Company, one copy of the Registration Statement and any amendment thereto, each preliminary prospectus and prospectus and each amendment or supplement thereto, and (ii) such number of copies of a prospectus, including a preliminary prospectus, and all amendments and supplements thereto and such other documents as the Investor may reasonably request in order to facilitate the disposition of the Registrable Securities owned by the Investor.

d. As promptly as practicable after becoming aware of such event, the Company shall notify the Investor of the happening of any event, of which the Company has knowledge, as a result of which the prospectus included in the Registration Statement, as then in effect, includes an untrue statement of a material fact or omission to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, and use its best efforts promptly to prepare a supplement or amendment to the Registration Statement to correct such untrue statement or omission, and deliver such number of copies of such supplement or amendment to the Investor as the Investor may reasonably request.

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e.   The Company shall use its best efforts to prevent the issuance of any stop order or other suspension of effectiveness of a Registration Statement, and, if such an order is issued, to obtain the withdrawal of such order at the earliest possible moment and to notify the Investor if the Investor holds Registrable Securities being sold (or, in the event of an underwritten offering, the managing underwriters) of the issuance of such order and the resolution thereof.

f. The Company shall hold in confidence and not make any disclosure of information concerning the Investor provided to the Company unless (i) the Company determines disclosure of such information is necessary to comply with federal or state securities laws, (ii) the disclosure of such information is necessary to avoid or correct a misstatement or omission in any Registration Statement, (iii) the release of such information is ordered pursuant to a subpoena or other final, non-appealable order from a court or governmental body of competent jurisdiction, or (iv) such information has been made generally available to the public other than by disclosure in violation of this or any other agreement. The Company agrees that it shall, upon learning that disclosure of such information concerning the Investor is sought in or by a court or governmental body of competent jurisdiction or through other means, give prompt notice to the Investor and allow the Investor, at the Investor’s expense, to undertake appropriate action to prevent disclosure of, or to obtain a protective order for, such information.

g. The Company shall use its best efforts to cause all the Re