TIDMRBD
RNS Number : 7371P
Reabold Resources PLC
21 October 2021
21 October 2021
Reabold Resources plc
("Reabold" or the "Company")
Equity Exchange with Daybreak Oil and Gas
Creation of Enhanced California E&P Company
Reabold, the AIM investing company which focuses on investments
in upstream oil and gas projects , is pleased to announce the
signing of a conditional equity exchange agreement between Daybreak
Oil and Gas Inc. ("Daybreak"), a US OTC traded oil and gas operator
with assets in California (the "Equity Exchange Agreement") (the
"Transaction"). 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.
Transaction Rationale:
-- Creates a self-funded, OTC traded, Californian oil and gas
operator, with a strong balance sheet, in which Reabold will have a
major shareholding
-- Daybreak will utilise its existing in-state management team
and expertise to grow the portfolio through development of existing
licences as well as considering strategic acquisition
opportunities
o Daybreak's management team have 12 years' experience operating
in California
o Daybreak is led by James F. Westmoreland
-- With a clear focus in California, Daybreak can utilise significant market opportunities for consolidation in the state, creating further opportunities for synergistic growth
-- As a result of the transaction, Reabold's interests in
California will be exchanged for shares of an OTC traded entity,
creating flexibility and funding opportunities for the Daybreak
going forward
A further announcement will be made in due course.
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."
About Daybreak:
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.
For further information, contact:
Reabold Resources plc c/o Camarco
Sachin Oza +44 (0) 20 3757 4980
Stephen Williams
Strand Hanson Limited - Nominated & Financial
Adviser
James Spinney
Rory Murphy
James Dance +44 (0) 20 7409 3494
Stifel Nicolaus Europe Limited - Joint
Broker
Callum Stewart
Simon Mensley +44 (0) 20 7710 7600
Ashton Clanfield
Panmure Gordon - Joint Broker
Hugh Rich
Nick Lovering +44 (0) 207 886 2733
Camarco
James Crothers
Billy Clegg
Rebecca Waterworth +44 (0) 20 3757 4980
Notes to Editors
Reabold Resources plc is an investing company investing in the
exploration and production ("E&P") sector. The Company's
investing policy is to acquire direct and indirect interests in
exploration and producing projects and assets in the natural
resources sector, and consideration is currently given to
investment opportunities anywhere in the world.
As an investor in upstream oil & gas projects, Reabold aims
to create value from each project by investing in undervalued,
low-risk, near-term upstream oil & gas projects and by
identifying a clear exit plan prior to investment.
Reabold's long term strategy is to re-invest capital made
through its investments into larger projects in order to grow the
Company. Reabold aims to gain exposure to assets with limited
downside and high potential upside, capitalising on the value
created between the entry stage and exit point of its projects. The
Company invests in projects that have limited correlation to the
oil price.
Reabold has a highly-experienced management team, who possess
the necessary background, knowledge and contacts to carry out the
Company's strategy.
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