REG - Zenith Energy Ltd - Exclusivity Agreements to acquire Daybreak O & G

Zenith EnergyAnnouncement

Today 07:00

For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20260603:nRSC7611Ga&default-theme=true

RNS Number : 7611G  Zenith Energy Ltd  03 June 2026

June 3, 2026

 

ZENITH ENERGY LTD.

 

("Zenith" or the "Company")

 

Exclusivity Agreements to acquire controlling interest in Daybreak Oil and
Gas, Inc.

 

Zenith (LSE: ZEN; OSE: ZENA; XSAT: ZENA SDR), the listed international energy
production and development company, is pleased to announce that it has signed
exclusivity agreements in connection with the potential acquisition of a
combined shareholding of approximately 82% in Daybreak Oil and Gas, Inc.
("Daybreak").

 

The proposed acquisition reflects Zenith's strategy of maximising the value of
Leopard Energy Inc. (OTC: LEEN), its publicly traded US subsidiary in which
Zenith currently holds approximately 99.87% of the total voting rights. Any
shareholdings successfully acquired may ultimately be held through Leopard
Energy or another designated subsidiary within the Zenith group, reflecting
the Company's focus on building a larger portfolio of revenue-generating US
energy assets in a favourable oil price environment.

 

Exclusivity Agreements with Reabold Resources Plc and Portillion Capital
Limited

 

Zenith has entered into confidentiality and exclusivity agreements with
Reabold Resources Plc ("Reabold") and Portillion Capital Limited
("Portillion") in relation to the potential acquisition of their respective
shareholdings in Daybreak, representing a combined interest of approximately
82% of Daybreak's issued share capital, comprising approximately 42% and 40%,
respectively.

 

Under the terms of these agreements, Zenith has been granted a 90-day
exclusivity period to conduct customary due diligence and negotiate the
proposed transactions. During this period, both Portillion and Reabold have
undertaken not to solicit, initiate, continue, or enter into any competing
discussions or transactions in respect of their interests in Daybreak.

The exclusivity agreements are non-binding in respect of the proposed
acquisitions and there can be no certainty that any transaction will
ultimately be completed. Completion of any acquisition remains subject to the
satisfactory completion of due diligence, the negotiation and execution of
definitive transaction documentation, and the satisfaction of any other
conditions that may be agreed between the parties.

The agreements permit the Company to engage in discussions with other Daybreak
shareholders regarding the potential acquisition of additional shares. Should
both proposed acquisitions be successfully completed, Zenith (through its
designated subsidiaries) would acquire a controlling interest of approximately
82% in Daybreak.

About Daybreak Oil and Gas, Inc.

 

Daybreak is an independent, OTC-traded crude oil and natural gas company
engaged in the exploration, development and production of onshore crude oil
and natural gas assets, primarily in California, United States. Daybreak holds
working interests in producing crude oil wells and development acreage in Kern
County, California. In May 2022, Daybreak acquired Reabold California, LLC, an
independent crude oil and natural gas company with operations in Central
California, including producing and development assets located in Contra Costa
and Monterey Counties.

 

Based on management representations and information obtained during the
Company's preliminary due diligence review, current production is estimated to
be approximately 130 barrels of oil per day, reflecting a prolonged period of
limited drilling and development activity. The existing asset base offers
significant potential for production growth through a targeted redevelopment
and drilling programme.

 

The Board notes that recent legislative changes in California, including the
implementation of Senate Bill 237, may create a more supportive permitting
framework for oil and gas development activities in Kern County, where
Daybreak's principal producing assets are located. The Company believes these
developments could enhance the potential for future drilling and redevelopment
programmes across Daybreak's asset base.

 

The approximately 42% shareholding currently held by Reabold originated from
Daybreak's acquisition of Reabold California in 2022 in a transaction valued
at approximately US$5.3 million. The approximately 40% interest held by
Portillion and associated parties originated from a financing completed in
connection with that acquisition, pursuant to which Daybreak raised
approximately US$2.5 million of new equity capital. Accordingly, the interests
subject to the exclusivity agreements originated from transactions
representing an aggregate value of approximately US$7.8 million.

 

The Company believes that the non-core nature of these shareholdings for both
Reabold and Portillion may support a transaction on attractive commercial
terms. The historical acquisition values are provided solely for contextual
purposes and do not reflect, nor will they be used as a reference point in,
the current negotiations.

 

Strategy

 

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.

 

A controlling interest in Daybreak would provide Zenith with a low-cost,
high-optionality entry into the California onshore oil and gas sector,
comprising established infrastructure, existing cash flow and a substantial
inventory of undrilled development locations. Daybreak's current production
profile does not fully reflect the underlying potential of its asset base,
having experienced a prolonged period of limited drilling and development
activity due to capital constraints. Zenith's operational, financial and
capital markets expertise can be applied to support the redevelopment and
growth of these assets, with the objective of increasing production, growing
cash flow and supporting future value creation.

 

The transaction represents an attractive opportunity to acquire a controlling
interest in a publicly traded company with established producing assets
through the acquisition of significant shareholdings held by long-standing
investors for whom the investment is considered non-core.

 

 

Andrea Cattaneo, Chief Executive Officer, commented:

"We are pleased to have secured exclusivity over both Reabold's and
Portillion's shareholdings, which together represent an approximately 82%
controlling interest in Daybreak.

Daybreak represents an operated, revenue-generating onshore production base
with established infrastructure, existing production and substantial
development potential. We believe the asset base offers significant
opportunities for production growth through targeted redevelopment and
drilling activities, particularly against the backdrop of an improving
regulatory and permitting environment for oil and gas operations in
California.

The proposed acquisition is consistent with our strategy of supporting the
growth and value creation objectives of Leopard Energy, our publicly traded US
subsidiary. We believe Daybreak represents an attractive opportunity to expand
Leopard's portfolio of producing energy assets through the acquisition of an
established production base with existing cash flow, infrastructure and
development potential. Following a prolonged period of limited drilling and
development activity, we believe there is scope to increase production,
enhance cash flow and create value through active strategic management and
targeted capital investment. The acquisition would represent a further step in
our strategy of building Leopard into a diversified, revenue-generating
platform focused on onshore energy assets in the United States.

We look forward to progressing our due diligence and providing further updates
to the market in due course."

 

Further Information:

 Zenith Energy Ltd

Andrea Cattaneo, Chief Executive Officer  Tel: +1 (587) 315 1279

                                            E:       info@zenithenergy.ca (mailto:info@zenithenergy.ca)

 

Notes to Editors:

Zenith Energy Ltd. is a revenue generating, independent energy company with
energy production, exploration and development assets in North Africa, the US
and Europe. The Company is listed on the London Stock Exchange Main Market
(LSE: ZEN), the Euronext Growth of the Oslo Stock Exchange (OSE: ZENA) and
on the Spotlight Stock Market in Sweden (XSAT: ZENA SDR).

Zenith's strategic focus is on pursuing development opportunities through the
development of proven revenue generating energy production assets, as well as
low-risk exploration activities in assets with existing production.

For more information, please visit: www.zenithenergy.ca
(http://www.zenithenergy.ca)

Twitter: @zenithenergyltd

LinkedIn: https://bit.ly/3A5PRJb (https://bit.ly/3A5PRJb)

Market Abuse Regulation (MAR) Disclosure

The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse Regulations
(EU) No. 596/2014 as it forms part of UK domestic law by virtue of
the European Union (Withdrawal) Act 2018 ("MAR"). Upon the publication of
this announcement via a Regulatory Information Service ("RIS"), this inside
information is now considered to be in the public domain.

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  ACQFXLBBQQLFBBB



            Copyright 2019 Regulatory News Service, all rights reserved