Creation of enhanced California E&P company

LONDON, UK: Reabold Resources signed a conditional equity exchange agreement between Daybreak Oil and Gas Inc. a US OTC traded oil and gas operator with assets in California.

The transaction will result in Reabold becoming a major shareholder of Daybreak via the issuance of new Daybreak shares to Reabold, in exchange for Daybreak acquiring Reabold California LLC (Reabold California), Reabold’s subsidiary which holds, inter alia, Reabold’s licence interests in California.

As per the terms of the Equity Exchange Agreement, Reabold California will become a wholly-owned subsidiary of Daybreak, which, in exchange, will issue 160,964,489 Daybreak shares to Gaelic Resources Limited, a Company wholly-owned by Reabold.

Per the conditions of the Equity Exchange Agreement, prior to completion of the Transaction, Daybreak is required to raise a minimum of US$2.5 million via an equity raise; the proceeds of which will be used to grow production across Daybreak’s enhanced portfolio. In addition, Daybreak will be required to complete a conversion of certain of its debt into equity. Reabold will hold up to 46.5 per cent of the Daybreak’s share capital as enlarged by the completion of the Transaction. The longstop date in the Equity Exchange Agreement is 14 February 2022.

Sachin Oza, co-CEO of Reabold, commented: “This transaction creates liquidity for Reabold and forms a new, cash flow producing business with the skills and capability to capitalise on growth opportunities from its existing portfolio, and attractive acquisitions presented by the market dynamics in California.”

“Our Californian portfolio has been a significant deliverer for Reabold, with 5 discoveries over 5 wells since we began our drilling program. With a dedicated management team with significant in-state expertise now at the helm, we look forward to the next phase of its development as a large shareholder.”

Daybreak Oil and Gas, Inc. is an independent oil and natural gas company currently engaged in the exploration, development and production of onshore oil and natural gas in the United States.  It is headquartered in Spokane, Washington with an operations office in Friendswood, Texas.  Daybreak owns a 3-D seismic survey that encompasses 20,000 acres over 32 square miles with approximately 6,500 acres under lease in the San Joaquin Valley of California and operates production from 20 oil wells in our East Slopes project area in Kern County, California.

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