Saba Energy signs farm-in agreement, arranges financing

Executive Summary

• Saba Energy Ltd. entered a heads‑of‑agreement to farm‑in to two offshore Philippine petroleum service contracts, acquiring operator status and majority participating interests.
• The company will raise approximately US$7–7.5 million through a convertible debenture private placement to fund the transaction and related costs.
• The farm‑in is subject to standard due‑diligence, regulatory approvals, and completion of definitive agreements; no reverse takeover or fundamental acquisition is anticipated.

Key Details

• Farm‑in – Petroleum Service Contract No. 54 (SC54)
• Area: 550 km²; water depth 50–110 m.
• Saba to acquire a 60 % participating interest and act as operator.
• Existing partners: Nido (27.5 %) and TGI World (12.5 %).

• Historical wells:

  • Nido 1‑X1 (1979) – tested at 1,500 bopd (requires completion).
  • Yakal‑1 (2009) – initial production 3,000 bopd (requires completion).
  • Tindalo‑1 (2009) – produced 19,000 bopd; 270,000 bbl before shut‑in for water encroachment.

• Farm‑in – Cadlao Development and Production Service Contract (DPPSC)

• Area: 914 km²; water depth 93 m.
• Saba to acquire a 52.727 % participating interest and act as operator.
• Existing partners: Philippine National Oil Company (20 %) and five minority partners (27.273 %).

• Historical production: Amco discovery wells (1979) produced 11.1 mmboe from 1982‑1992; internal estimate of an additional ~6.8 mmboe recoverable.

• Terms & Conditions

• Subject to standard due‑diligence, customary representations, warranties, and closing conditions.
• Requires approval by the Philippines Department of Energy for Cadlao DPPSC.
• Saba must raise US$7 million by 15 April 2026.
• Execution of a definitive farm‑out agreement required.

• May require TSX Venture Exchange approval.

• Financing Plan

• Private placement of convertible debentures targeting US$7.5 million.
• Term: 3 years; interest rate 12 % per annum, payable quarterly.

• Conversion price: US$0.35 per share; automatic conversion if share price exceeds US$0.65 for ten consecutive business days.

• Strategic Outlook

• The transaction expands Saba’s offshore portfolio and secures operator status on two significant Philippine contracts.
• No reverse takeover or fundamental acquisition is anticipated in connection with this financing and farm‑in.