Business Development

Tekoil & Gas Corporation (“TKGN,” “we” or the “Company”) was incorporated in Delaware on January 2, 2002, under the name “Trailridge Holdings, Inc.” On April 6, 2004, the Company changed its name to “Glow Bench Systems International, Inc.”; and on December 14, 2004, it changed its name to “Pexcon, Inc.”

On May 25, 2005, Pexcon, Inc., entered into an Acquisition Agreement with Tekoil & Gas Corporation, a Florida corporation (“Tekoil-FL”), the shareholders of Tekoil-FL and Gerald M. Dunne, in which the shareholders of Tekoil-FL received 694,980,000 shares of the common stock, $0.00000001 par value, of Pexcon, Inc., in exchange for the outstanding shares of common stock of Tekoil-FL held by them. Immediately following the closing of the Acquisition Agreement on June 27, 2005, Pexcon, Inc., had a total of 772,200,000 shares of common stock outstanding. In connection with the Acquisition Agreement, Pexcon, Inc., acquired the assets and assumed the liabilities of Tekoil-FL, which became a wholly-owned subsidiary of Pexcon, Inc. For accounting purposes only, the share exchange transaction was treated as a recapitalization of Tekoil-FL as the acquirer. In connection with the transaction, the Board of Directors of Pexcon, Inc., resigned, the Board of Directors of Tekoil-FL became the Board of Directors of the Company, and the Company’s name was formally changed from Pexcon, Inc., to Tekoil & Gas Corporation.

On October 14, 2005, the Company effected a 1 for 100 reverse split of its common stock. As of that date and as a result of the reverse stock split, 7,722,000 shares of common stock were outstanding. In connection with the reverse stock split, the Company changed the par value of the common stock from $0.00000001 per share to $0.000001 per share, and it reduced the number of authorized shares of common stock from 800,000,000 shares to 200,000,000 shares.

The Company currently operates its business directly, and not through its Tekoil-FL subsidiary, which continues to exist but has no assets or operations. For the purpose of pursuing its business strategy in the Province of Newfoundland, Canada, as described in greater detail below, on March 29, 2006, the Company formed a wholly-owned subsidiary, Tekoil Rig and Development Corporation, a Newfoundland corporation, and on April 19, 2006, the Company qualified to do business in Newfoundland. On January 17, 2007, the Company formed another wholly-owned subsidiary, Masters Acquisition Co., LLC, a Delaware limited liability company, and changed its name to Tekoil and Gas Gulf Coast, LLC, on January 26, 2007.

The Company is authorized to issue up to 20,000,000 shares of preferred stock, par value $0.00000001 per share. The Company has designated 3,000,000 of those authorized shares of preferred stock as Series A Convertible Preferred Stock, the terms of which are set forth in the Certificate of the Powers, Designations, Preferences and Rights of the Series A Convertible Preferred Stock, filed with the Secretary of State of Delaware on August 2, 2005, as amended on February 22, 2006 and June 12, 2006.

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As of March 15, 2007, the Company had outstanding 23,694,175 shares of common stock, par value $0.000001 per share (the “Common Stock”), and 2,692,000 shares of Series A Convertible Preferred Stock, par value $0.00000001 per share (the “Series A Preferred Stock”).

Business of Issuer

The Company is an exploration stage oil and gas enterprise focused on the acquisition, stimulation, rehabilitation and asset improvement of small to medium sized manageable oil and gas fields throughout North America.

Business Strategy



Our overall goal is to maximize our value through profitable growth by acquiring oil and gas reserves and production, with a firm philosophy of utilizing the latest, state of the art oil and gas technology in our drilling operations. Our current and ongoing strategy is to (a) acquire producing oil and gas properties with significant upside potential at favorable prices, (b) focus on exploration and development activities to maximize production and ultimate reserve recovery on existing properties, (c) explore undeveloped properties, (d) maintain a low cost structure, and (e) maintain financial flexibility. Key elements of our strategy include the following:

Acquisitions of Producing Properties . We have an experienced management and technical team, some of whom are consultants, which makes us more financially flexible. We focus on the acquisition of owner-operated producing properties that meet our selection criteria, which include (a) significant potential for increasing reserves and production through development and further exploration, (b) favorable purchase price, and (c) opportunities for improved operating efficiency. We are continually identifying and evaluating acquisition opportunities. To date, we have not been successful in this regard and there can be no assurance that any such acquisitions will be successfully consummated in the future.

Development . We have researched several projects that did not meet our criteria and/or did not pass our due diligence process.