SEPTEMBER 2008 WAIVER AND AMENDMENT

THIS SEPTEMBER 2008 WAIVER AND AMENDMENT (this “ Agreement ”) is made as of September 19, 2008, among South Texas Oil Company, a Nevada corporation (the “ Company ”), the Subsidiaries, The Longview Fund, L.P., a California limited partnership (“ Longview ”), and Longview Marquis Master Fund, L.P., a British Virgin Islands limited partnership (“ Marquis ” and together with Longview, the “ Buyers ”). Capitalized terms used, but not otherwise defined, herein shall have the meanings ascribed to them in the Purchase Agreement (as defined below).

WHEREAS, the Company and the Buyers entered into that certain Securities Purchase Agreement, dated as of April 1, 2008 (as amended by each of the June 2008 Amendment Agreement (as defined below) and the Second June 2008 Amendment Agreement (as defined below), and as may otherwise be amended, supplemented, restated or modified and in effect from time to time, the “ Purchase Agreement ”), pursuant to which (i) the Company issued to (a) Longview, among other things, senior secured notes in an aggregate original principal amount of $23,908,013.11 (such notes, together with any promissory notes or other securities issued in exchange or substitution therefor or replacement thereof, and as any of the same may be amended, supplemented, restated or otherwise modified and in effect from time to time, the “ Longview   Notes ”), and (b) Marquis, among other things, senior secured notes in an aggregate original principal amount of $8,469,337.71 (such notes, together with any promissory notes or other securities issued in exchange or substitution therefor or replacement thereof, and as any of the same may be amended, supplemented, restated or otherwise modified and in effect from time to time, the “ Marquis   Notes ” and, together with the Longview Notes, the “ Notes ”), and (ii) the Warrants (as defined therein) were amended and restated;

WHEREAS, pursuant to that certain June 2008 Amendment Agreement, dated as of June 18, 2008 (the “ June 2008 Amendment Agreement ”), among the Company and the Buyers, among other things, Marquis assigned, and Longview assumed, all of Marquis’s obligation to purchase Additional Notes pursuant to the Purchase Agreement, such that Marquis would have no further obligations, on or after June 18, 2008, to purchase Additional Notes pursuant to the Purchase Agreement;

WHEREAS, pursuant to that certain June 2008 Amendment to Senior Notes and Purchase Agreement, dated as of June 30, 2008 (the “ Second   June 2008 Amendment Agreement ”), among the Company and the Buyers, among other things, the Company and the Buyers amended the Purchase Agreement to increase the Maximum Borrowing Amount to $32,500,000 and amended each of the Notes with respect to the manner in which Interest is paid, as more specifically set forth therein;

WHEREAS, the Company desires to enter into a Securities Purchase Agreement (as amended, restated, supplemented or otherwise modified and in effect from time to time, the “ Bridge Purchase Agreement ”), by and among the Company and the investors listed on the Schedule of Buyers attached thereto (the “ Bridge Buyers ”), pursuant to which, among other things, subject to the terms and conditions set forth therein, the Company will sell, and the

Bridge Buyers will purchase senior secured notes in the original aggregate principal amount of $7,000,000 (such notes, together with any promissory notes or other securities issued in exchange or substitution therefor or replacement thereof, and as any of the same may be amended, supplemented, restated or otherwise modified and in effect from time to time, the “ Bridge Notes ”); and

WHEREAS, the Company and Buyers desire to amend the terms of the Purchase Agreement and each of the Longview Notes as provided herein.

NOW, THEREFORE, in consideration of the agreements, provisions and covenants contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, each of the undersigned agrees as follows:

1.   Amendment of Longview Notes .

a.   E ach of the Buyers, severally and not jointly, hereby agrees with the Company that, as of the date first above written, the last sentence of Section 5 of each of the Longview Notes is hereby amended and restated in its entirety to read as follows:

“Notwithstanding the foregoing, the Interest Amount payable on any Interest Payment Date (but not the Interest Amount payable on any Company Early Redemption Date) that occurs on or prior to the later of (a) the first date on which no Bridge Notes are outstanding, and (b) the earlier of (I) December 31, 2008 and (II) the Company Financing Date, shall be paid by adding such Interest Amount to the Principal (i.e., by capitalizing such Interest Amount) on such Interest Payment Date, and on and after such Interest Payment Date such Interest Amount shall itself (as part of the Principal) bear Interest in accordance herewith. For purposes of this Note, “ Bridge Notes ” means those certain senior secured notes in the original aggregate principal amount of $7,000,000, issued pursuant to that certain Securities Purchase Agreement, dated as of September 19, 2008, by and among the Company and the investors listed on the Schedule of Buyers attached thereto, as amended, restated, supplemented or otherwise modified and in effect from time to time (the “ Bridge Purchase Agreement ”); and “ Company Financing Date ” means the first date after the Issuance Date on which the Company and its Subsidiaries have received an aggregate of $15,000,000 or more in gross proceeds in one or more transactions, other than the transaction contemplated by the Bridge Purchase Agreement, following June 30, 2008 (the “ Amendment Date ”) from (A) any sales of debt and/or equity securities of the Company and/or any of the Subsidiaries or any securities convertible into or exercisable or exchangeable for debt and/or equity securities of the Company and/or any of its Subsidiaries (including debt securities with an equity component), other than issuances of Common Stock upon exercise of stock options outstanding on the Amendment Date, provided that such stock options are not amended or otherwise modified after the Amendment Date, (B) any other debt and/or equity financings (including any debt financing with an equity component), (C) any “farm-out” financing transactions or similar transactions which do not have operating obligations of the financing party as a major component, in any form, and/or (D) any sales of Hydrocarbon Property.”

b.   As amended hereby, each of the Longview Notes shall remain in full force and effect.

2.   Amendment to Purchase Agreement .

a.   Each of the Buyers, severally and not jointly, hereby agrees with the Company that, as of the date first written above, the last sentence of Section 5(t) of the Purchase Agreement is hereby amended by adding a new clause (x) immediately after clause (ix) thereof, such clause to read in its entirety as follows:

“; and (x) Liens consisting of cash collateral securing the Company’s and the Subsidiaries’ reimbursement obligations, under letters of credit permitted under Section 6(f)(vii), provided that the aggregate amount of cash collateral securing such Indebtedness does not exceed the undrawn face amount outstanding at any one time.”

b.   Each of the Buyers, severally and not jointly, hereby agrees with the Company that, as of the date first written above, Section 6(f) of the Purchase Agreement is hereby amended and restated in its entirety to read as follows:

“f.   Indebtedness . From the date of this Agreement until the end of the Reporting Period, the Company shall not, and the Company shall cause each of the Subsidiaries not to, create, incur, assume, extend the term of, become obligated on or suffer to exist (directly or indirectly), any Indebtedness other than Indebtedness under the Notes issued pursuant to this Agreement, except that the Company and the Subsidiaries may, (i) incur non-convertible Indebtedness for borrowed money, and only to the extent, that (A) a subordination agreement in favor of and in form and substance satisfactory to the Buyers in its sole and absolute discretion is executed and delivered to the Buyers with respect thereto (which subordination agreement shall prohibit payments in respect of such   subordinated Indebtedness for so long as any Notes are outstanding), (B) the terms of such subordinated Indebtedness does not require or permit payment of principal thereon until at least ninety (90) days after the Maturity Date of any outstanding Notes, and (C) such subordinated Indebtedness is not secured by any of the assets of the Company or any of the Subsidiaries; (ii) incur purchase money Indebtedness or Capital Lease Obligations in an aggregate amount not to exceed $250,000 outstanding at any time; (iii) incur unsecured intercompany Indebtedness amongst the Company and one or more of its wholly-owned domestic Subsidiaries that is a party to, and in compliance with, the Amended and Restated Security Agreement and the Subsidiary Guaranty, to the extent such Indebtedness is evidenced by a promissory note that has been pledged to Collateral Agent; (iv) incur Indebtedness of the Company and the Subsidiaries for taxes, assessments, municipal or governmental charges not yet due; (v) incur obligations of the Company and the Subsidiaries resulting from endorsements for collection or deposit in the ordinary course of business; (vi) suffer to exist the Diversity Note (and the obligations thereunder) and the Leexus Additional Consideration Obligation, in each case as in effect on the date of its original issuance or incurrence, without waiver, amendment, supplement, restatement or other modification thereof after such date; and (vii) incur reimbursement obligations in respect of letters of credit issued for the account of the Company or any of the Subsidiaries in the ordinary course of their business for the purpose of securing performance obligations of the Company or any other of the Subsidiaries or for the purpose of satisfying federal, state and/or local legal requirements for owning and

operating oil and gas properties, so long as the aggregate face amount of such letters of credit does not exceed $500,000 at any one time (any Indebtedness that the Company or any of the Subsidiaries is expressly permitted to incur pursuant to clauses (i) through (vii) above being referred to herein as “ Permitted Indebtedness ”).”

c.   E ach of the Buyers, severally and not jointly, hereby agrees with the Company that, as of the date first above written, the first sentence of Section 6(t)(i) of the Purchase Agreement is hereby amended and restated in its entirety to read as follows:

(i)   The Company shall not allow the Daily Barrel Average to be less than 225 barrels of oil and/or its equivalent in natural gas (including barrels of oil and barrels of oil equivalents from gas produced into a sales pipeline at a ratio of one (1) barrel of oil for each six thousand (6,000) cubic feet (“ MCF ”) of gas (collectively, “ BOEs ”)) in the calendar quarter ending September 30, 2008, or be less than 250 BOEs in the calendar quarter ending December 31, 2008, or be less than 350 BOEs in the calendar quarter ending March 31, 2009, or be less than 400 BOEs in the calendar quarter ending June 30, 2009, or be less than 500 BOEs in the calendar quarter ending September 30, 2009 or be less than 750 BOEs in any calendar quarter ending after September 30, 200