Zenith Energy Enters Deal to Potentially Buy Majority Stake in Daybreak Oil and Gas

About this update from Zenith Energy Ltd.

By Dominic ChoppingZenith Energy has signed exclusivity agreements that could see it buy an 82% stake in Daybreak Oil and Gas, as the international energy production and development company seeks to build a larger portfolio of revenue-generating U.S. energy assets amid the favorable oil price environment.The company said Wednesday that it has entered into confidentiality and exclusivity agreements with Reabold Resources and Portillion Capital over the potential acquisition of their respective 42% and 40% shareholdings in Daybreak.Under the terms of the agreements, Zenith has been granted a 90-day exclusivity period to conduct due diligence and negotiate the proposed transactions.Zenith said that if successful, the acquired stake could be held through Leopard Energy or another subsidiary within the group."The proposed acquisitions are consistent with Zenith's strategy of growing through proven, revenue-generating energy production assets, complemented by low-risk exploration activities in assets with existing production," Zenith said.A controlling interest in Daybreak would give Zenith a low-cost entry into the California onshore oil and gas sector, comprising established infrastructure, existing cash flow and a substantial inventory of undrilled development locations, it added.Daybreak is an independent crude oil and natural-gas company engaged in the exploration, development and production of onshore crude oil and natural gas assets, primarily in California.Daybreak's current production is estimated to be approximately 130 barrels of oil per day, reflecting a prolonged period of limited drilling and development activity, but existing assets offer significant potential for production growth through a targeted redevelopment and drilling program, Zenith said.Write to Dominic Chopping at [email protected]

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