Daybreak Oil and Gas, Inc. reported that the company has secured financing through a loan commitment agreement with an unidentified lender. The funds will be used to advance selected oil and gas projects under development as well as other corporate purposes.
Daybreak Oil and Gas said that the loan is for $3.5 million and has a term of three years. The company is required to make monthly payments on the loan with interest calculated at a rate of 6% per year, and the full principal due at the end of the term.
Daybreak Oil and Gas is pledging the company’s leasehold located at the East Slopes Project in Kern County, California, as collateral for the loan. The company expects the loan to close before June 30, 2011.
Daybreak Oil and Gas issued 3.5 million restricted shares of the company’s stock to the lender as a requirement of the loan. The company will also assign 5% of the net profits of the East Slopes Project to the lender.
In fiscal 2012, Daybreak Oil and Gas will drill nine wells at the East Slopes Project, with the first well scheduled to spud in July 2011.
For more information on the company, go to www.daybreakoilandgas.com