**Exhibit
      10.37**


**CONSULTING
      SERVICES AGREEMENT**





**This
      Consulting Services Agreement** (“Agreement”) is made as of the 1st
      day of March, 2007 to the 28th day of February, 2008, by and between Daybreak
      Oil and Gas, Inc., (“Daybreak”), a Washington corporation, and Michael J.
      Hooper, an individual.





**Whereas**,
      Daybreak desires to be assured of the association and services of the Consultant
      in order to avail itself of the Consultant’s experience, skills, abilities,
      knowledge and background as an Accounting and Accounting Systems Analyst,
      and





**Whereas**,
      Daybreak wishes to engage Consultant to provide advisory and other services
      for
      Daybreak and Consultant wishes to accept such engagement, all on the terms
      and
      conditions set forth herein.





**Whereas**,
      the Board of Directors of the Company considers it to be in the best interests
      of the Company to enter into this Agreement with the Consultant and this
      Agreement has been duly approved by the Board of Directors of the
      Company;





**Now
      therefore**, in consideration of the mutual promises herein and other
      good and valuable consideration, the receipt and sufficiency of which is hereby
      acknowledged, the parties hereto agree as follows:





**1.**           **Engagement.**  Daybreak
      hereby engages the Consultant on a non-exclusive basis, and the Consultant
      hereby accepts the engagement, to become a consultant to Daybreak and to render
      such advice, consultation, information, and services to the directors and
      officers of Daybreak regarding accounting system design, accounting input and
      organization, management reports, internal control procedures and related
      matters.





The
      Consultant will report to the person or positions designated by the Company
      to
      whom the Consultant will be reporting and will discharge such duties and
      responsibilities as are assigned to the Consultant from time to
      time.





The
      Consultant warrants that he is duly qualified to perform the duties hereunder
      and further covenants that in performing his duties hereunder, he will not
      engage in any activity that is in violation of applicable security laws or
      subject the Corporation to liability thereunder.





It
      shall
      be expressly understood that the Consultant shall have no power to bind the
      Company to any contract or obligation or to transact any business in the
      Company’s name or on behalf of the Company in any manner.





2.           **Term.**  The
      term of this Agreement shall commence on March 1, 2007 and continue in effect
      until February 29, 2008.  Notwithstanding the foregoing, this
      Agreement may be terminated prior to the end of the term by either Daybreak
      or
      Consultant, for any reason or for no reason, upon thirty (30) days written
      notice to the other party.  In the event of termination, Consultant
      shall be entitled to all fees and other consideration contained in this
      Agreement earned and accrued to the effective date of termination.





CONSULTING
          SERVICES AGREEMENT
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3.           **Compensation.**





(a)           Monetary.  In
      exchange for his commitment to provide services to Daybreak under Section One
      above, Daybreak agrees to pay Consultant an hourly rate in the amount of Forty
      Dollars ($40.00) per hour plus out of pocket expenses incurred or advanced
      on
      behalf of the Company.





The
      Consultant shall submit invoices to the Corporation for each month or portion
      thereof for which services are provided during the period covered by the invoice
      and also including any proper claim for travel expenses.  Each invoice
      shall indicate the period covered, the month or portion of a month worked,
      the
      rate and the total charge for consulting services.





The
      Company agrees to pay the invoice within a reasonable period of time following
      its examination and review by the Treasurer or Chief Financial
      Officer.





The
      Company will reimburse the Consultant, at actual cost, for out-of-pocket
      expenses incurred in accordance with the Corporation’s standard practice for the
      reimbursement of reasonable travel expenses incurred by its contractors or
      its
      own personnel.  The Corporation will also reimburse the Consultant for
      any reasonable long distance telephone, fax or photocopying charges incurred
      by
      the Consultant.  Expenses claimed must be supported by the applicable
      receipts.





4.           **Independent
      Contractor Status**.  In the performance of the work
      contemplated in this Agreement, Consultant is an independent contractor with
      the
      authority to control and direct the performance of the details of the work,
      Daybreak being interested only in the results obtained.  Consultant is
      not an agent or employee of Daybreak for any purpose, and the employees of
      Consultant are not entitled to any of the benefits that Daybreak provides for
      its employees.  Consultant shall be responsible for payment of all
      taxes, including federal, state, and local taxes arising out of its activities
      under this Agreement, including, but not limited to, income tax, social security
      tax, and unemployment insurance tax that might be due.  It is
      understood that Daybreak does not agree to use Consultant
      exclusively.  Nothing in this Agreement shall constitute or be
      construed as a creation of a partnership or joint venture between Consultant
      and
      Daybreak, or their successors or assigns.  The parties acknowledge and
      agree that Consultant, its principals, associates and employees, are not engaged
      in the practice of law nor are they engaged in providing legal advice or counsel
      in connection with their representation of Daybreak.  The parties
      further acknowledge and agree that any association or referral with or to any
      law firm by or with Consultant shall not be considered or construed to be the
      practice of law by Consultant in connection with such association or
      referral.





5.           **Confidential
      Information**.  In the course of providing services for
      Daybreak, each of Daybreak and Consultant may learn or discover information
      that
      is identified by the other as non-public, proprietary
      information.  Each of Daybreak and Consultant agrees that, during the
      term of engagement and for a period of twenty-four (24) months thereafter,
      it
      will not, directly or indirectly, disclose or use any such information of the
      other party (“Confidential Information”) without the consent of such
      party.  Confidential Information shall not include: information
      which is currently in the public domain or hereafter enters the public domain
      without the fault or


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            SERVICES AGREEMENT
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involvement
      of the receiving party; information known to the receiving party prior to its
      disclosure by other party and information disclosed to a receiving party from
      a
      source (other than the other party) having a lawful right to make such
      disclosure to the receiving party, or information required to be disclosed
      under
      any court order or governmental directive. The terms of this Agreement shall
      be
      treated as Confidential Information by both parties.





6.           **Summons/Subpoenas**.  In
      the event that Consultant or any party acting on behalf of Consultant
      (Consultant and any such person being a “Subpoenaed Party”) receives a subpoena
      or summons requesting that the Subpoenaed Party produce documents or records
      containing Confidential Information of Daybreak or otherwise pertaining to
      the
      services rendered hereunder or testify concerning such Confidential Information
      of Daybreak or services, the Subpoenaed Party will immediately notify
      Daybreak.  Daybreak may, within the time permitted for the Subpoenaed
      Party to respond to any such requests, initiate such legal action seeking a
      protective order or other relief as Daybreak deems appropriate to protect
      information from disclosure.  If Daybreak takes no action within the
      time permitted for the Subpoenaed Party to respond or if Daybreak’s actions do
      not result in a judicial order preventing the Subpoenaed Party from supplying
      or
      disclosing the requested information or testifying, the Subpoenaed Party may
      comply with the request.  Daybreak agrees to reimburse and pay the
      Subpoenaed Party for all costs and expenses incurred by the Subpoenaed Party
      (or
      such person) in connection with any such summons or subpoenas concerning
      Daybreak, including reasonable attorney’s fees and time spent by the Subpoenaed
      Party ‘s personnel, billed at their regular rates.





7.           **Indemnification**.  Each
      party agrees to indemnify and hold the other party, its officers and employees,
      harmless against any and all claims, lawsuits, judgments, costs, liens, losses,
      expenses, fees (including reasonable attorney’s fees and costs of defense),
      proceedings, actions, demands, causes of action, liability and suits of any
      kind
      and nature, including but not limited to, personal injury (including death),
      property damage, or other harm for which recovery damages is sought that may
      arise out of or be occasioned or caused by each party’s negligent act, error or
      omission or the negligent act, error or omission of any agent, officer,
      director, representative, employee, consultant or subconsultant of each party
      and their respective officers, agents, employees, directors and representatives
      while in the exercise of performance of the rights or duties under this
      Agreement.





8.           **General**.





(a)           This
      Agreement shall be interpreted and construed in accordance with the laws of
      the
      State of Washington without giving effect to principles of conflict of
      law.  Any action arising in connection with this Agreement must be
      brought in Spokane County Superior Court, Spokane, Washington.  By
      this Agreement, the parties confer jurisdiction over the subject matter of
      and
      parties to this Agreement.  The party who prevails in any such action
      will be entitled to an award of the reasonable costs and attorneys’ fees
      incurred in the action.





(b)           The
      terms and conditions set forth in this Agreement are intended by Daybreak and
      Consultant to constitute the final and complete statement of their agreement,
      and all prior proposals, communications, negotiations, understandings, and
      representations relating to the subject matter of this Agreement, whether verbal
      or written, are hereby superseded.  No modification or amendment of
      this Agreement shall be effected unless the same is in writing and signed by
      both parties.


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            SERVICES AGREEMENT
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(c)           Any
      notice required or desired to be given under this Agreement shall be given
      in
      writing and sent by certified mail, return receipt requested, addressed as
      follows:





i.           To
      Daybreak:





Daybreak
      Oil and Gas, Inc.


Thomas
      C.
      Kilbourne


1012
      Washington Mutual Financial Center


601
      West
      Main Avenue


Spokane,
      Washington 99201





ii.           To
      Michael J. Hooper:





Michael
      J. Hooper


601
      W.
      Main Avenue   Suite 1017


Spokane,
      WA 99201





Notice
      shall be effective upon receipt.





(d) Consultant
      consents in advance to Daybreak’s right to assign this Agreement to any
      successor in interest that expressly assumes Daybreak’s obligations hereunder in
      writing.  Consultant may not assign its rights and obligations under
      this Agreement.





(e) Each
      of the
      sections contained herein shall be and remain separate from, independent of,
      and
      severable from all and any other sections herein except as otherwise indicated
      by the context of this Agreement.  Any decision or declaration that
      one or more of the sections or subsections are null and void shall have no
      effect on the remaining sections or subsections of this Agreement.





(f) Upon
      any
      termination of employment, Consultant shall within ten (10) business days,
      deliver or cause to be delivered to the Company all books, documents, effects,
      monies received in trust, or other property belonging to the Company or its
      subsidiaries for which the Company or its subsidiaries are liable to others,
      which are in possession, charge, control, or custody of the
      Consultant.





(g) This
      Agreement shall inure to the benefit of and be binding upon the Consultant
      and
      its heirs, executors, legal personal representatives, and administrators, and
      upon the Company.




(h) This
      Agreement may be executed in one or more counterparts, each of which shall
      be
      deemed an original and together shall constitute a single
      agreement.  Facsimile signatures shall be good and sufficient evidence
      of signature for all purposes of this Agreement.


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            SERVICES AGREEMENT
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(i) The
      waiver by
      any party hereto of a breach of any provision of this Agreement shall
      not
      operate or be construed as a waiver of any subsequent breach of the same or
      of
      any other provisions of this Agreement





IN
      WITNESS WHEREOF, the parties have executed this Agreement as of the 28th day
      of
      February, 2007.








**COMPANY:**


Daybreak
      Oil and Gas, Inc.








By:/s/ Thomas C.
      Kilbourne


Thomas
      C. Kilbourne, Treasurer








**CONSULTANT:**


Michael
      J. Hooper








By:/s/ Michael J.
      Hooper


Michael
      J. Hooper


















CONSULTING
      SERVICES AGREEMENT


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