South Texas, Sonterra Join Forces To Tackle Texas, Colorado

South Texas Oil Company has signed a definitive contract operating agreement with Sonterra Resources, Inc. As of the effective date, April 1, 2008, Sonterra began overseeing daily operations, in the name of, on behalf of, and for the benefit of South Texas Oil, of both operating services and accounting services for the operated and non-operated properties as an independent contractor acting in the role of contract operator.

Under the terms of the agreement, South Texas Oil will lead the operation of its Colorado assets with the assistance of the contract operator. Under the terms of the agreement, the initial period shall be 90 days, with a month-to-month extension as approved by both parties, going forward. The contract operated services at a rate competitive to similar services provided as by industry standard. Senior management of the contract operator has experience providing similar services at predecessor companies.

Scott Zimmerman, President and CEO, said: "With the addition of the expertise provided by our contract operator, we can maintain a lean corporate structure, which is a principal management strategy. Their experience and expertise in our core Texas operating area provides South Texas Oil with a strong foundation for continued growth of production and reserves, thus enhancing shareholder value."