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     Daybreak Oil and Gas, Inc.

    DAYBREAK OIL AND GAS, INC.

    1414 S. FRIENDSWOOD DRIVE, SUITE 212

    FRIENDSWOOD, TX  77546

    OFFICE: (281) 996-4176

August 17, 2023

Via Edgar

United States Securities and Exchange Commission

Division of Corporation Finance

Office of Energy & Transportation

100 F Street, N.E.

Washington, D.C. 20549-7010

Attention:	     Robert Babula

Staff Accountant

Re:	 Daybreak Oil and Gas, Inc.

Form 10-K for the Fiscal Year
ended February 28, 2022 Filed June 15, 2022

Form 10-Q for the Fiscal Quarter
ended November 30, 2022 Filed January 17, 2023

File No. 000-50107

Dear Mr. Babula:

We are responding to comments
received from the staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”) by letter dated
August 4, 2023 (the “Comment Letter”), which was received by Daybreak Oil and Gas, Inc. (“Daybreak”, the “Company”,
“we”, “us” or “our”) regarding the filings listed above. Each comment is included below and is numbered
to correspond to the numbered paragraph in the Comment Letter. The Company’s responses immediately follow each comment.

Form 10-Q for the Fiscal Quarter ended November
30, 2022

Note 5 - Acquisition, page 9

 1. We understand from your response to prior comment 3 that you believe the
Reabold acquisition did not qualify as a business acquisition based on the guidance in FASB ASC 805-10-55-5A, and that you plan to revise
your accounting and disclosures to reflect the transaction as an asset acquisition rather than a business acquisition.

However, given your valuation of
the consideration and the value ascribed to the property, it appears the value of the property would represent about 68% of the fair value
of the gross assets acquired, based on the purchase price allocation shown in the Form 8-K/A that you filed on July 11, 2023, and in the
Form 10-Q that you filed on July 26, 2022.

Please explain to us how you concluded
that such value would be properly regarded as substantially all of the fair value of the gross assets acquired, if this is your view.
Based on the information that you have disclosed, it appears that you should continue your analysis of the criteria in FASB ASC 805-10-55-3A
through 9 in determining whether the transaction should be reported as a business acquisition or an asset acquisition.

Please provide us with a complete
analysis of this guidance, describe to us all facets of the operations acquired (e.g. tell us if you acquired an assemble workforce or
interests in leases along with the producing oil and gas properties), and explain how you ensured that all assets and liabilities were
identified in accounting for the transaction.

If you have properly concluded
that the transaction does not qualify as a business acquisition, tell us how you propose to allocate the cost of the acquisition based
on the guidance in FASB ASC 805-50-30-3, and report the correction of the error pursuant to FASB ASC 250-10-50-7. Please submit the associated
disclosures that you expect to include in your annual report, including disclosures that would address the correction of errors in all
three interim periods, and the Form 8-K/A referenced above.

Also address the implications for
your assessment of the effectiveness of your disclosure controls and procedures, and internal control over financial reporting. Please
comply with your periodic report filing obligations under Rules 13a-1 and 13a-13 of Regulation 13A.

Response:

In preparing a response to the above comment
we reviewed our initial analysis of FASB ASC 805-10-55-3A through 805-10-55-5A. We then continued further examination of the guidance
in FASB ASC 805-10-55-5B through 9 to determine whether the acquisition of Reabold California, LLC (“Reabold”) should be reported
as a business acquisition or an asset acquisition.

Upon completing a full analysis of FASB
ASC 805-10-55-3A through 805-10-55-9, we realized that we had erred in our previous analysis of the transaction by not completing the
full analysis of 805-10-55-3A through 805-10-55-9. If we had completed the full analysis we would have reached the conclusion that the
transaction should be reported as a business acquisition instead of an asset acquisition.

The guidance in ASC 805-10-55-3A, as restated
here in abbreviated form, defines a business as an integrated set of activities that is capable of being conducted or managed for the
purpose of providing a return in the form of economic benefits to the owners. Under this definition, the acquisition meets the requirement
to be considered a business acquisition rather than an asset acquisition.

The table below detail the analysis of
ASC 805-10-55-4 in regards to inputs and processes applied to those inputs for the creation of outputs.

    Item
    Definition
    Analysis

    Input
    Any economic resource that creates or has the ability to contribute to the creation of outputs when one or more processes are applied to it
    O&G leases and producing O&G wells

    Process
    Any system, standard protocol or convention that when applied to an input creates the ability to contribute to the creation of outputs
    Operation of producing O&G wells

    Output
    The result of inputs and processes applied to the inputs that provide goods and revenue
    Produced O&G hydrocarbons from the wells and sold to buyers

The acquisition meets the qualification
provided for by ASC 805-10-55-5, in that the integrated set of activities and assets, using inputs (O&G hydrocarbons) and processes
(production) applied to the inputs together significantly contribute to the ability to create output (revenue).

Paragraphs ASC 805-10-55-5A through
805-10-55-5C provide a screen to determine if the acquisition would not be considered a business. If the screen is not met further assessment
is necessary to determine when an acquisition is considered to be a business. In reviewing ASC 805-10-55-5A through 805-10-55-5C, we determined
the following:

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 · ASC 805-10-55-5A (Single or similar asset threshold test) the acquisition
is a similar type of assets without considering goodwill.

 · ASC 805-10-55-5B (Single identifiable asset) the acquisition of multiple
wells would still count as a single identifiable asset acquisition.

 · ASC 805-10-55-5C (Similar assets) the acquisition is of a similar type
of tangible assets having the same type of risk characteristics.

ASC 805-10-55-5D is not applicable because
the acquisition does have outputs. The output is the actual production of the O&G hydrocarbons.

In ASC 805-10-55-5E (b) Daybreak was able
to maintain the existing contracts that provided access to an organized workforce that had the necessary skills, knowledge and experience
to perform the acquired process (O&G production). The organized workforce acquired does perform a substantive process through its’
historical and institutional knowledge. Having to replace that workforce would have resulted in a significant cost and effort to Daybreak
and additionally could have resulted in a loss of production due to potential mismanagement of the producing O&G wells.

In the guidance provided by ASC 805-10-55-5F,
none of the suggested examples of contractual arrangements that provide for the continuation of revenues were applicable.

ASC 805-10-55-6 points out that established
businesses may often have many different types of inputs, processes and outputs. However, in the case of this acquisition, there is only
one input, process and output; that being the production of O&G hydrocarbons resulting in revenue. This fact does not disqualify the
acquisition from being considered a business acquisition.

ASC 805-10-55-7 was superseded by Accounting
Standards Update No. 20147-01 issued in January of 2017.

The guidance in ASC 805-10-55-8 states
that a determination needs to be made if the integrated set is capable of being conducted and managed as a business by a market participant.
The answer to this guidance is an affirmative yes. The acquired assets (O&G wells) are capable of being conducted and managed as a
business by a market participant as shown by the acquisition of the corporate structure, the existing inputs and processes and the historical
production and revenue i.e. outputs.

The guidance in ASC 805-10-55-9 states
that when evaluating whether a set meets the criteria of ASC 805-10-55-5D through 805-210-555E, the presence of more than an insignificant
amount of goodwill may be an indicator that the acquired process is substantive and, therefore, the acquired set is a business. In this
specific acquisition the goodwill represented approximately 28% of the purchase price as reported on Form 10-Q for the fiscal quarter
ended November 30, 2022, which is not an insignificant percentage of the purchase price leading to the conclusion that the acquisition
was a business acquisition.

Following the above guidance and validating
the conclusion that the acquisition was a business acquisition then leads to our response below to the Staff’s comment number 3
from their June 6, 2023 comment letter in regards to the composition of goodwill following the guidance of FASB ASC 805-30-50-1(a).

The guidance in FASB ASC 805-30-50-1(a)
has as an objective that the acquirer of a business shall disclose a qualitative description of the factors that make up the goodwill
recognized such as expected synergies from combining operation of the acquire and the acquirer or other intangible assets.

Goodwill can be defined as the portion
of the purchase price that is higher than the sum of the net fair value of the assets purchased and the liabilities assumed. Synergies
in an acquisition can be found in cost savings, revenue enhancements, operational improvements or financial benefits. These synergies
can be grouped into two main types of synergies: operating synergies and financial synergies. Not all synergies have a monetary value.

    3

From the acquisition we have identified
operational synergies in our workforce through a reduction in accounting and administrative costs, field operating costs and collaboration
of field personnel to improve field and well management. Additionally, vendor and customer relationships in the acquired company were
maintained and enhanced, allowing for further operational savings. Maintaining the corporate operating structure of the acquired company
created additional synergy in the acquisition.

Closing Comments

We agree with the purpose and scope of the staff
reviewing our Annual Form 10-K and Quarterly 10-Q filings to aid public companies in ensuring that all information investors require to
make an informed investment decision is disclosed.

We acknowledge that:

 · the Company is responsible for the adequacy and accuracy of the disclosure in the filing;

 · staff comments or changes to disclosure in response to staff comments do not foreclose the Commission
from taking any action with respect to the filing; and

 · the Company may not assert staff comments as a defense in any proceeding initiated by the Commission
or any person under the federal securities laws of the United States.

We are currently working on completing our Annual
Report on Form 10-K for the fiscal year ended February 28, 2023. We will ensure that the above comments are incorporated as appropriate
into these filings.

We believe the foregoing is responsive to your
comments. If you should have any questions or further comments, please call me at (281) 996-4176.

Sincerely,

/s/ JAMES F. WESTMORELAND

James F. Westmoreland

President and Chief Executive Officer

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