Replies to post #4298 on Daybreak Oil and Gas Inc (DBRM)

[alsobirdman]

I have not dug out the filings yet to refresh my memory which I will do, but as you recall, App is paying a premium in order to borrow money from Daybreak for the drilling. Daybreak borrows from Max, lends it to App and pockets a profit from that deal. When Daybreak renegotiated the loan terms back in August, there was no reduction in the amount App is paying us. That means a couple things; we are making more money on the interest from App, and it also may increase the likelihood that App can't make the payments.

As Mavy says, I'm not sure if taking over 100% would make JW happy or not. On the surface it seems like a good thing, but only if cost of production is significantly lower than the price they are getting.

Interesting times for sure. I'm betting on JW. He's a sharp oil man and knows what he is doing.

[maverick one]

I agree and remember you bringing that up regards to possible thoughts Max has or had with App.

Weren't they behind schedule for KY wells online?

That's what I always thought as well the 75% and 25% ratio seemed pretty steep to borrow money. I looked at it almost like a hard money VC injection of liquidity for a high return.

But, that business module might not be looking so good now that oils dropped steeply off it's high.

JW when I first read that deal with APP- I immediately realized that he had the upper hand if they failed to fulfill their agreement. If that were to happen would JW have the desire, experience and know how to develop that lease as 100% owner with these low and gas prices?

[maverick one]

Well it was telling App agreed to a 12% interest and 25% split from the getgo. All DBRM is doing is borrowing money and then loaning it back out making a profit along the way.

The Wild West is the Western style of banking here in the US where banks want immediate returns and payment then jumping out.

I prefer, practice and implement the merchant banking model where merchant banks take a long term partnership approach which London has long practiced for centuries.

The following 4 quarters of filings will be telling.

They have a good deal going out here in CA with low cost wells that are productive. I would like to see more focus as a company on our Kern lease with more barrels produced and reserves added. In particular the Glide-Kendall prospect which as we know could be the largest pool on the lease yet to be explored and determined.

At around a dime it's back down which has been a long time coming. IMHO the penny stock promotions is JW's way of creating some liquidity or some buzz in some way. When you own a shell companies use shares for finance or to hedge them for capital and sometimes the companies priority isn't a higher PPS. I just however have the vision that this is how this story goes here it's going to take more time for this storyline to be developed more. It's like your reading a good book and your in the middle of it chapter by chapter. You can't just say ok I figured it out-because you haven't. It's a story that will unfold and IMO we'll see potential acquisitions later on perhaps years down the road here and there. The Kern will be explored bit by bit over time it's like the book I just mentioned above.

Dilution has been pretty low so that's really not an issue here JW's pretty good about that since his background is being a bean counter mixed with O&G.

If JW continues to use penny stock marketing it is what it is nothing any common shareholder can do about it whether if anyone has an opinion on it or not. I guess just ride along with it sell some shares if that's what people wish to do when he hires them make a few bucks. For myself-I'll continue to hold regardless. I don't wish to set them free to MM's and other investors for strategic reasons.

The Kern is this companies bread and butter like to see them get back to being busy in it. Time will tell.

I respect and appreciate your back and forths fox. Have a good day wherever you are.

Mav