|                                  |                                              | 
|--------------------------------- | -------------------------------------------- | 
|Exhibit
 10.24                    |                                             
|                                  |                                             
|Recording
 Requested By And       |                                             
|When
 Recorded Return To:         |                                             
|                                  |                                             
|O & G Energy Partners, LLC        |                                             
|3660 Stoneridge Road, Suite A-101 |                                             
|Austin, TX 78746                  |                                             
|                                  |                                             
|DOCUMENTARY
 TRANSFER TAX $______ |                                             
|                                  |                                              | 
|o                                 | Computed on
 full value of property conveyed | 
|o                                 | or computed
 on full value less liens and    | 
|                                  | encumbrances
 remaining at time of sale      | 

|   |  |                                        
|-- |  | ---------------------------------------
|By |  |                                        
|   |  |                                        
|   |  |                                        
|   |  |                                        
|   |  | SPACE
 ABOVE THIS LINE FOR RECORDER USE

PARTIAL RELEASE OF PRODUCTION PAYMENT

|                     |   |                                 
|-------------------- | - | --------------------------------
|STATE OF
 CALIFORNIA | § |                                 
|                     | § | KNOW ALL MEN
 BY THESE PRESENTS:
|COUNTY OF KERN       | § |                                 

This
Partial Release of Production Payment makes reference to that certain Exchange
Option Agreement dated May 1, 2009, between O & G Energy Partners, LLC (O
& G), and San Joaquin Investments, Inc. (San Joaquin), as buyers, and
Daybreak Oil and Gas, Inc. (Daybreak), as Seller, concerning the acquisition
of certain interest of Seller by Buyers in the East Slopes Project, San Joaquin
Basin, Kern County, California (the Exchange Option).

Pursuant to
the terms of the Exchange Option, O & G and San Joaquin executed and
delivered to Daybreak that certain Assignment of Production Payment, in which
each became obligated to pay Daybreak a portion of the net profits attributable
to the oil and gas interests assigned to O & G and San Joaquin pursuant to
the Exchange Option until the total sum of $700,000 had been paid; and

WHEREAS,
under the Assignment of Production Payment, (the Assignment), O & G
Energy Partners, LLC was severely and not jointly liable for 50% of the production
payment amount payable pursuant thereto; and

WHEREAS, O
& G, has assigned a portion of its interest in the oil and gas properties
which were the subject of the Exchange Option West Coast Partners, LLC (West
Coast), which has become obligated for a portion of the net profits payable by
O & G to Daybreak under the Assignment; and

WHEREAS, O
& G, West Coast and Daybreak have reached an agreement by which the
production payment obligation of O & G (and, consequently, West Coast) to
Daybreak will be discharged in cash;

NOW,
THEREFOR, for a valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, DAYBREAK OIL AND
GAS, INC., does hereby RELEASE, REMISE and SURRENDER unto O & G ENERGY PARTNERS, LLC and WEST COAST PARTNERS, LLC, whose address is
3660 Stoneridge Road, Suite A-101, Austin, Texas 78746, their successors and

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assigns all obligations originally accruing to O & G under the
terms of the Assignment, and declare all such obligations satisfied and
discharged.

This is a
partial release, only, and shall not affect or impair the obligations s or
responsibilities of San Joaquin Investments, Inc., under the terms of the
Assignment.

IN WITNESS
WHEREOF, this Partial Release of Production Payment is EXECUTED this 25th
day of September, 2009.

| |                            |                                  
| | -------------------------- | ---------------------------------
| | BUYER:                    
| |                            |                                  
| | DAYBREAK OIL AND GAS, INC.
| |                            |                                  
| | By:                        | /s/JAMES F.
 WESTMORELAND        
| |                            |                                  
| |                            | James F.
 Westmoreland, President

STATE OF TEXAS

COUNTY OF
GALVESTON

On this 25th
day of September 2009, before me, Jessica C Gafford, a notary Public,
personally appeared James Westmoreland, President of DAYBREAK OIL AND GAS, INC., a Washington corporation, who
proved to me on the basis of satisfactory evidence to be the person who
executed the within instrument as president on behalf of the corporation
therein and acknowledged to me that such corporation executed the same.

WITNESS
my hand and official seal.

| |                                  
| | ---------------------------------
| | /s/Jessica
 Colleen Gafford      
| |                                  
| | Notary
 Public, State of Texas   
| | My
 Commission expires: 10/ 31/11

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