8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 29, 2008

TEKOIL  & GAS CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	0-52100	34-2035350
(State or other jurisdiction of	(Commission	(I.R.S. Employer
incorporation or organization)	File Number)	Identification No.)

25025 I-45 North, Suite 525, The Woodlands, Texas 77380

(Address of principal executive offices, including Zip Code)

(281) 364-6950

(Registrant's Telephone Number, including Area Code)

___________________________________________________________

(Former name, former address and former fiscal year, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.04 Triggering Events that Accelerate or Increase a Direct Financial Obligation or Obligation under an Off-Balance Sheet Arrangement.

Credit and GuarantyAgreement

As previously disclosed, on November 13, 2006, the Company executed a Purchase and Sale Agreement with Masters Resources, LLC and Masters Oil and Gas, LLC (together the “Sellers”), pursuant to which the Company’s subsidiary, Tekoil and Gas Gulf Coast, LLC, a Delaware limited liability company (the “Subsidiary”) acquired four properties, consisting of interests in Trinity Bay, Redfish Reef, Fishers Reef, and North Point Bolivar Fields, located in Galveston and Chambers Counties in Galveston Bay, Texas. This transaction was consummated on May 11, 2007.

The cash portion of the consideration paid to the Sellers was paid with $30 million of a $50 million Senior Secured Credit Facility (the “Loan”) arranged by Goldman Sachs E & P Capital, a division of Goldman, Sachs & Co. The terms of the Loan were set forth in a Credit and Guaranty Agreement dated as of May 11, 2007 (the “Credit Agreement”), by and among the Subsidiary (the “Borrower”), the Company and the other Guarantors (defined therein) party thereto from time to time, the Lenders (defined therein) party thereto from time to time, J. Aron & Company, as Lead Arranger and as Syndication Agent, and J. Aron & Company, as Administrative Agent (“Administrative Agent,” together with the Lenders, the “Lender Parties”) for the Lenders. A copy of the Credit Agreement was filed as Exhibit 10.29 to the Company’s amended current report on Form 8-K/A filed on May 23, 2007.

Additionally, as previously disclosed, Mark S. Western, the Company’s Chief Executive Officer, executed a Limited Guaranty on October 24, 2007 (the “Limited Guaranty”), pursuant to which he agreed to personally guaranty certain of the Company’s obligations under the Credit Agreement. A copy of the Limited Guaranty was filed as Exhibit 10.58 to the Company’s current report on Form 8-K filed on October 29, 2007.

On May 29, 2008, the Company, Borrower and Mark S. Western received a Notice of Acceleration and Demand from J. Aron & Company, as Lead Arranger, Syndication Agent, Administrative Agent, Lender Counterparty and a Lender, alleging that certain events of default have occurred under the Credit Agreement as a result of (a) Borrower’s failure to make the principal payment due on April 28, 2008, in the amount of $1,000,000, (b) Borrower’s failure to make the interest payment due on April 28, 2008, in the amount of $459,864.72, (c) Borrower’s failure to pay in full the monthly settlement payment due on April 8, 2008, under the ISDA Master Agreement, dated May 11, 2007, between J. Aron & Company, as Lender Counterparty, and the Borrower (“ISDA Agreement”), (d) the existence of the foregoing Events of Default under the Credit Agreement constitutes an Event of Default under the ISDA Agreement, (e) Borrower diverting from the Collateral Account to undisclosed accounts established by Borrower gross cash revenues and receipts payable to Borrower from any source or activity in contravention of the Credit Agreement, and (f) Borrower’s conversion of Royalty Owner’s ORRI payment due under the ORRI Conveyance. A copy of the Notice of Acceleration and Demand is attached to this report as Exhibit 10.78 and is incorporated herein by reference.

The approximate amount due under the Credit Agreement is $34,212,200.

On May 30, 2008, the Company, Borrower and Mark S. Western received a Notice of Foreclosure Sale from J. Aron & Company, as Lead Arranger, Syndication Agent, Administrative Agent, Lender Counterparty and a Lender, regarding its intent to sell the Collateral (defined therein), meaning generally, all of the interest of the Company in Subsidiary, which owns substantially all of the consolidated income producing assets of the Company, to the highest qualified bidder in public on June 10, 2008. A copy of the Notice of Foreclosure and Sale is attached to this report as Exhibit 10.79 and is incorporated herein by reference.

Additionally, on May 30, 2008, J. Aron & Company demanded that Mark S. Western pay the amounts owed by him under his Limited Guaranty. Also, on May 15, 2008, Tri Star Capital Ventures Limited demanded that the directors of the Company pay $8,635,521.09 under their guarantees of unsecured indebtedness of the Company alleged to be in default.

Item 9.01 Financial Statements and Exhibits.

(a) Financial Statements of Business Acquired .

None.

(b) Pro Forma Financial Information .

None.

(c) Shell Company Transactions .

None

(d) Exhibits .  

Exhibit 10.78	Notice of Acceleration and Demand, dated May 29, 2008, from J. Aron & Company, as Lead Arranger, Syndication Agent, Administrative Agent, Lender Counterparty and a Lender, to the Company, Subsidiary and Mark S. Western. (filed herewith)
Exhibit 10.79	Notice of Foreclosure Sale, dated May 30, 2008, from J. Aron & Company, as Lead Arranger, Syndication Agent, Administrative Agent, Lender Counterparty and a Lender, to the Company, Subsidiary and Mark S. Western. (filed herewith)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	TEKOIL & GAS CORPORATION
Date: June 4, 2008	/s/ Gerald Goodman
	Gerald Goodman Chief  Financial Officer

EX-10.79

EXHIBIT 10.78

EX-10.79

EXHIBIT 10.79

J. ARON & COMPANY

May 30, 2008

TekOil and Gas Gulf Coast, LLC	Via Telecopy and Certified Mail No.7160 3901 9842 8489 8854
25050 I-45 North, Suite 525	Return Receipt Requested
The Woodlands, Texas 77380
Attn: Mr. Mark Western
TekOil & Gas Corporation	Via Telecopy and Certified Mail No. 7160 3901 9842 8489 8861
25050 I-45 North, Suite 525	Return Receipt Requested
The Woodlands, Texas 77380
Attn: Mr. Mark Western
Mr. Mark Western	Via Telecopy and Certified Mail No. 7160 3901 9842 8489 8878
5036 Dr. Phillips Blvd, #232	Return Receipt Requested
Orlando, Florida 32819

Re: NOTICE OF FORECLOSURE SALE (this “Foreclosure Notice”) in connection with the following documents:

(a)	Credit and Guaranty Agreement dated as of May 11, 2007 (as amended, the “Credit Agreement”), executed by TekOil and Gas Gulf Coast, LLC, a Delaware limited company (“Borrower”), TekOil & Gas Corporation, a Delaware corporation (“Parent”), the lenders party to the Credit Agreement (“Lenders”), J. Aron & Company, as Lead Arranger and as Syndication Agent, and J. Aron & Company, as Administrative Agent for such Lenders (“Administrative Agent”). Capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Credit Agreement.
(b)	Note dated as of May 11, 2007, executed by Borrower payable to the order of Administrative Agent, in the principal amount of $50,000,000;
(c)	Pledge Agreement dated as of May 11, 2007 executed between Parent and Administrative Agent; and
(d)	Limited Guaranty dated October 24, 2007, (the “Limited Guaranty”) executed by Mark S. Western (“Western”) in favor of Administrative Agent for the benefit of the Lenders.

Borrower, Parent and Western:

Administrative Agent has notified Borrower, Parent, and Western of the existence of certain Events of Default under the Credit Agreement, which Events of Default are continuing. Additionally, by correspondence dated May 29, 2008, you were each informed that - among other things - (A) all Obligations, including the unpaid principal amount of and accrued interest on the Loans (collectively, the "Past Due Sums"), were then (and remain) immediately due and payable, and (B) Administrative Agent has been instructed by Lenders to enforce any and all Liens and security interests created pursuant to the Security Documents. Accordingly, this letter will serve as notice to you of the following:

May 30, 2008

Page 2

1.Payment of the Past Due Sums has not been made and the Past Due Sums remain unpaid and immediately due and payable. There are currently no modification, renewal, extension, or settlement agreements between Borrower, Parent or Western and Administrative Agent with regard to the Past Due Sums, and all proposals made in that regard for any of the foregoing are hereby rejected.

2.Enclosed is a notification being sent to you and the persons copied by this letter of the intended disposition of the Collateral (hereafter defined). In addition, you are hereby notified as follows:

To:TekOil & Gas Corporation

    From:J. Aron & Company, as Administrative Agent, 1000 Louisiana, Suite 550, Houston, Texas 77002, Attn. John Howie, Phone 713-658-2682.

Administrative Agent will sell the Collateral referenced on the attached Exhibit A, to the highest qualified bidder in public as follows:

    Day and Date:Tuesday , June 10, 2008

    Time:11:00 a.m., Houston, Texas time

    Place:Offices of Haynes and Boone, LLP, 1221 McKinney, Suite 2100, Houston, TX 77010

You are entitled to an accounting of the unpaid indebtedness secured by the property that Administrative Agent intends to sell. You may request an accounting by calling Administrative Agent at 713-658-2682.

If any party who receives this letter is a debtor in a bankruptcy proceeding subject to the provisions of the United States Bankruptcy Code (Title 11 of the United States Code, the “Code”), then this letter is merely intended to be written notice that formal demand has been made in compliance with the Transaction Documents and applicable law. In such event, this letter is neither an act to collect, assess, or recover a claim against such party, nor is this letter intended to violate any provisions of the Code. All claims that Administrative Agent and each Lender assert against such party will be properly asserted in compliance with the Code and such party’s respective bankruptcy proceedings.

Under no circumstances or contingencies shall the interest accrued, charged, or collected under, or in connection with, the Credit Agreement and the other Transaction Documents exceed the maximum amount of interest permitted by applicable law. In addition, all of Administrative Agent’s and each Lenders’ claims, demands, and accruals regarding the Obligations, whenever made, whether for principal, interest, or otherwise, are intended to comply in all respects, both independently and collectively, with all applicable usury laws and are accordingly limited so that applicable usury laws are not violated.

Nothing contained in this letter is intended to waive any Default or Event of Default, or waive any rights, remedies, or recourses available to Administrative Agent or any Lender, nor be an election of remedies resulting from any default with respect to the Credit Agreement and the other Transaction Documents. This Foreclosure Notice is delivered to Borrower, Parent and Western on behalf of the Administrative Agent and the Lenders and is not intended and shall not be construed to be delivered for the benefit of any third party. You may contact Administrative Agent at 1000 Louisiana, Suite 550, Houston, Texas 77002, Attention: John Howie (713) 658-2682, regarding any questions that you may have, including the outstanding balance of the Past Due Sums as of any particular date.

May 30, 2008

Page 2

Sincerely,

J. ARON & COMPANY,

as Lead Arranger, Syndication Agent,

Administrative Agent, Lender Counterparty and a Lender

By:	/s/ Susan Rudov
	Authorized Signatory

cc:	John Howie,J. Aron & Company
	Charlie Beckham, Haynes and Boone, LLP
	Baker & Hostettler LLP
	SunTrust Center
	200 S. Orange Ave, Suite 2300
	Orlando, FL 32802
	Attention: Ken Wright
	Telecopier: 407 841-0168
	Neligan Foley LLP
	325 North St. Paul, Suite 3600
	Dallas, Texas 75201
	Attention: Nick Foley
	Telecopier: 214 840 5301

EXHIBIT A

TO

NOTICE OF FORECLOSURE SALE

The Collateral subject to this Foreclosure Notice is, based on pledge documentation executed by TekOil & Gas Corporation (“Pledgor”), composed of all of Pledgor's right, title and interest in, to and under the following, in each case whether now owned or existing or hereafter acquired or arising and wherever located (all of which being hereinafter collectively referred to as the "Collateral"):

(a)Pledged Membership Interests; and

(b) all Proceeds, products, accessions, and profits of or in respect of any of the foregoing.

"Pledged Membership Interests" shall mean all membership interest in TekOil and Gas Gulf Coast, LLC, whether now outstanding or issued hereafter including as listed below and the certificates, if any, representing such membership interests and any interest of Pledgor on the books and records of such limited liability company or on the books and records of any securities intermediary pertaining to such interest and all dividends, distributions, cash, warrants, rights, options, instruments, securities and other property or proceeds from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of such membership interests.

Pledgor	Limited Liability Company	Certificated (Y/N)	Certificate No. (if any)	% of Outstanding Membership Interests of the Limited Liability Company
Tekoil & Gas Corporation	Tekoil and Gas Gulf Coast, LLC	N	N/A	75%

"Proceeds" shall mean: (i) all "proceeds" as defined in Article 9 of the UCC, (ii) payments or distributions made with respect to any Pledged Membership Interest and (iii) whatever is receivable or received when Collateral or proceeds are sold, exchanged, collected or otherwise disposed of, whether such disposition is voluntary or involuntary.

"UCC" shall mean the Uniform Commercial Code as in effect from time to time in the State of New York or, when the context implies, the Uniform Commercial Code as in effect from time to time in any other applicable jurisdiction.