NON-STATUTORY STOCK OPTION AGREEMENT
This OPTION AGREEMENT (this "Agreement") is made as of the 18th day of June, 1997, by and between
SOUTH TEXAS DRILLING & EXPLORATION, INC., a Texas corporation, with its principal place of
business in San Antonio, Bexar County, Texas (hereinafter called the "Company"), and SAN PATRICIO
CORPORATION, a Texas corporation, with its principal place of business in Corpus Christi, Nueces County,
Texas (hereinafter called "SP").
WHEREAS, incident to the transactions contemplated by the Asset Purchase Agreement dated May 23, 1997,
by and between the Company, SP and Richard Phillips ('Phillips"), the Company desires to afford SP an
opportunity to purchase shares of the $0.10 par value common stock of the Company (hereinafter called the
NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth, the parties hereto agree as
1. Corporate Authority. This Agreement is made pursuant to and in accordance with the terms and provisions of
a resolution adopted by the Board of Directors of the Company on April 25, 1997.
2. Grant of Option. The Company hereby irrevocably grants to SP the right and option to purchase all or any
part of an aggregate of 150,000 shares of the Stock on the terms and conditions hereinafter set forth (hereinafter
referred to individually as an "Option" and collectively as the "Options").
3. Purchase Price. The purchase price of the shares of the Stock covered by the Options shall be $1.50 per
share (subject to adjustment as provided in Section 11).
4. Time Option is Exercisable. SP shall have the right to purchase all or a portion of the Stock subject to the
Option at such times, and from time to time, until June 18, 2002, at which time the Options shall terminate. There
is no obligation on SP to purchase any of the Stock subject to the Options.
5. Exercise of Options. SP may exercise an Option by giving written notice to the Company specifying the
number of full shares to be purchased an