Daybreak O&G Discovers Oil at Ca. Prospect

Daybreak O&G announced a new oil discovery at its Ball Prospect in the East Slopes Project located in Kern County, California. The Ball #1-11 well was drilled to 2,500 feet and encountered 15 feet of oil pay in the Vedder sand at 2,350 feet. Production casing has been set and the well is being completed. The well will be produced into the Dyer Creek Production Facility, approximately one-half mile away, where an existing tank battery is already in place and is currently being refurbished. The Company expects to have the Ball #1-11 well on production within the next 30 days. Daybreak has a 41.67% working interest in the well. The drilling rig will be moved to the Dyer Creek Prospect, where the Dyer Creek #67X-11 well will be drilled, as soon as it has completed drilling operations at the Ball #1-11 well.

James F. Westmoreland, President and Chief Executive Officer, stated, "With the success of the Ball #1-11 well, Daybreak continues to execute its plan of developing its East Slopes Project and finding new oil reserves. With the use of our 3-D seismic, we have identified at least six more development locations at the Ball Prospect. There are existing production facilities on the lease that we will utilize after some repairs are completed and electrical lines are extended from the Bear Property. By having the production facility at Dyer Creek in place, it ensures that our overall cost in the project will be kept to a minimum."