Saba Energy Enters Into Farm-In for Offshore Assets in the Republic of the Philippines

Executive Summary

• Saba Energy Ltd. entered into a Heads of Agreement to farm‑in to two offshore Philippines Petroleum Service Contracts, acquiring a 60% interest in PSC 54 and a 52.727% interest in the Cadlao DPPSC, and will act as operator on both.
• The transaction is conditioned on Saba raising USD 7 million by April 15 2026 and completing a definitive farm‑out agreement; it also requires regulatory approvals (Philippine Department of Energy and TSX Venture Exchange).
• Saba plans to fund the farm‑in through a private placement of a 3‑year convertible debenture for USD 7.5 million at 12% annual interest, convertible at US$0.35 per share (accelerated conversion if the share price exceeds US$0.65 for ten consecutive business days).

Key Details

• Contract Areas
• PSC 54: 550 km², water depths 50‑110 m; partners – Nido (27.5%) and TGI World (12.5%).
• Cadlao DPPSC: 914 km², water depth 93 m; partners – PNOC (20%) and five minority partners (27.273%).
• Participating Interests
• Saba will hold 60% in PSC 54 and 52.727% in Cadlao DPPSC.
• Saba will be the operator of both contracts.
• Historical Production Highlights
• PSC 54: 1‑X1 discovery (1979) tested at 1,500 bopd; Yakal‑1 (2009) tested at 3,000 bopd; Tindalo‑1 (2009) initial production 19,000 bopd, produced 270,000 bbl before shut‑in.
• Cadlao DPPSC: Amco discovery wells (1979) produced 11.1 MMBOE (1982‑1992); internal estimate of additional 6.8 MMBOE recoverable.
• Financial Commitment
• Saba to pay its proportionate share of well and completion costs for both contracts.
• Required raise of USD 7 million by 15 April 2026 to satisfy farm‑in conditions.
• Financing Structure
• Private placement of a convertible debenture: USD 7.5 million gross proceeds, 3‑year term, 12% interest payable quarterly.
• Conversion price: US$0.35 per share; acceleration clause if market price > US$0.65 for ten consecutive business days.
• Subject to TSXV approval.
• Regulatory & Closing Conditions
• Standard due diligence, representations, warranties, and closing conditions.
• Approval/ward grant from the Philippines Department of Energy for Cadlao DPPSC.
• Signing of definitive farm‑out agreement.
• Potential TSX Venture Exchange approval if required.

Notable Quotes

• “The Company does not anticipate an RTO or fundamental acquisition with this financing and acquisition.” – Mohammad Fazil, President, CEO & Director, Saba Energy Ltd.