-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, GnBStOoNrkQnrNSs62WeV67MCarT2FxKg+A31aiioLQFavcIUvACGLDuhMt482h9 r7BFpUIgf8HNomBfo7cZ7g== 0000312340-98-000005.txt : 19980401 0000312340-98-000005.hdr.sgml : 19980401 ACCESSION NUMBER: 0000312340-98-000005 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19980330 ITEM INFORMATION: FILED AS OF DATE: 19980331 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: SABA PETROLEUM CO CENTRAL INDEX KEY: 0000312340 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 470617589 STATE OF INCORPORATION: CO FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-13880 FILM NUMBER: 98580192 BUSINESS ADDRESS: STREET 1: 3201 AIRPARK DR STREET 2: STE 201 CITY: SANTA MARIA STATE: CA ZIP: 93455 BUSINESS PHONE: 8053478700 MAIL ADDRESS: STREET 1: 3201 AIRPARK DR STREET 2: STE 201 CITY: SANTA MARIA STATE: CA ZIP: 93455 FORMER COMPANY: FORMER CONFORMED NAME: BORDEAUX PETROLEUM CO DATE OF NAME CHANGE: 19910924 FORMER COMPANY: FORMER CONFORMED NAME: BORDEAUX TRADING CO DATE OF NAME CHANGE: 19800716 8-K 1 FORM 8-K CURRENT REPORT SECURITIES AND EXCHANGE COMMISSION Washington D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report: (Date of earliest event reported) March 18, 1998 SABA PETROLEUM COMPANY (Exact name of registrant as specified in charter) Delaware 1-12322 47-0617589 ======================================================== (State or (Commission (IRS Employer other File Number) Identification No.) jurisdiction of incorporation) 3201 Airpark Drive Suite 201, Santa Maria, CA 93455 (Address of principal executiove offices) (Zip Code) Registrant's telephone number, including area code: (805) 347-8700 (Former name or former address, if changed since last report) Not Applicable Item 1 Changes in Control of Registrant Not Applicable Item 2 Acquisition or Disposition of Assets Not Applicable Item 3 Bankruptcy or Receivership Not Applicable Item 4 Changes in Registrant's Certifying Accountant Not Applicable Item 5 Other Material Events Proposed Combination With Omimex Recourses, Inc. On March 18, 1998, the Company entered into a preliminary agreement with Omimex Resources, Inc., a privately held Fort Worth, Texas oil and gas company ("Omimex"), which operates a substantial portion of Company's producing properties, to enter into a business combination ("Agreement"). At the date of this report, all of the details of the business combination have not been fully negotiated. However, the principle features of the combination would be that all of the assets of the Company, save its California operations, would be combined with the assets of Omimex, with the Company being the surviving corporation. Since entering into the Agreement, Omimex has indicated an interest that the Company include its Indonesian operations in the proposed combination, and this inclusion is under negotiations. The economic terms of the transaction would be to issue common shares to the shareholders of Omimex on a basis proportionate to the respective net asset values of the two companies, determined by replacing the account for properties on the respective balance sheets by the present worth, calculated at a ten percent discount, of the proved reserves of the apposite company and adjusting that number by other assets and liabilities. Credit would also be given for oil and gas properties deemed to have exploration or development potential. Should definitive agreements be obtained and the combination consummated, it is expected that the Company will issue a number of shares to the holders of Omimex stock such that such holders will own in excess of fifty but less than sixty percent of the outstanding stock of the Company. Management of Omimex would become management of the Company, which would be headquartered in Fort Worth, Texas. The Company's California operations would be held by Saba Petroleum, Inc., an existing subsidiary, the shares of which would be distributed proportionately to the Company's shareholders immediately prior to the consummation of the business combination. Structuring of the transaction is in the preliminary stage and far from fully negotiated. Consummation of the transaction would require shareholder approval, various governmental approvals and agreement on various matters which are yet unresolved. Closing of the transaction is expected to take approximately three months. Except for historical information contained herein, the statements in this report are forward-looking statements that are made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties which may cause the Company's actual results in future periods to differ materially from forecasted results. These risks and uncertainties include, among other things, definitive agreements mutually agreed upon and executed by the Company and Omimex by April 15, 1998; issuance of respective fairness opinions to the Company and to Omimex from advisors of their choice that the transaction is fair to each other; divestiture by the Company of all of its California and Indonesian assets and receipt by the Company of an opinion of counsel of the Company's choice that such divestiture will not be treated as a dividend taxable upon receipt to the shareholders of the Company; receipt by the Company and Omimex of an opinion from their respective counsel that the transaction will be treated as a reorganization under section 368(a) of the Internal Revenue Code and that neither corporation nor its shareholders shall recognize income as a consequence thereof; approval of the transaction by the shareholders of the Company; approval for listing on the American Stock Exchange, upon official notice of issuance, of the shares of stock to be issued to the shareholders of Omimex in the transaction; and receipt of all material governmental approvals requisite to the consummation of the transaction. The terms and conditions of the Agreement are set forth in Exhibit 10.1 to this report and reference is hereby made to such exhibit for the complete terms and conditions of the Agreement; the statements in this report are qualified in their entirety by reference to such exhibit. Item 6 Resignation of Registrant's Directors Not Applicable Item 7 Financial Statements and Exhibits 10.1 Preliminary Agreement To Enter Into A Business Combination dated March 18, 1998 by and among the Company and Omimex Resources, Inc. 10.2 Press Release announcing the Proposed Combination between the Company and Omimex Resources, Inc. dated March 18, 1998 Item 8 Change in Fiscal Year Not Applicable Item 9 Sales of Equity Securities Pursuant to Regulation S Not Applicable SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. SABA PETROLEUM COMPANY Date: March 30, 1998 By:/s/ Ilyas Chaudhary Chief Executive Officer Date: March 30, 1998 By: /s/Walton C. Vance Chief Financial Officer EX-10.1 2 PRELIMINARY AGREEMENT EXHIBIT 10.1 CONFIDENTIAL-MASTER COPY March 18, 1998 Omimex Resources, Inc. 5608 Melby Fort Worth, Texas 70107 Attention: Mr. Naresh K. Vashisht President and Chief Executive Officer Gentlemen and Ladies: This letter, when accepted by Omimex Resources, Inc., a Delaware corporation, ("Omimex") in the manner provided below, will establish the basic terms for business combination between Omimex and Saba Petroleum Company, a Delaware corporation, ("Saba") . Subject to the conditions to the obligations of each party, the preparation and execution of mutually acceptable agreements and the approval of our respective Boards of Directors and the shareholders of Saba, our agreement, is as follows: 1. Each party shall use commercially reasonable efforts to forthwith prepare or cause to be prepared a mutually acceptable set of definitive acquisition agreements, which when executed and performed shall cause Omimex to be merged with and into Saba, solely in exchange for shares of the common stock, $0.001 par value, of Saba (the "Stock"). The number of shares of the Stock which will be issued will be determined by application of the formula specified in paragraph 3 of this agreement (the "Transaction"). On consummation of the transaction, the name of the surviving corporation shall be changed to Omimex Resources, Inc. and the name "Saba" and all derivations thereof, shall be owned by and remain with Saba Petroleum, Inc. ("SPI"). 2. The form of the Transaction shall be determined by the parties with the objective of effecting the Transaction at the earliest practicable date and reducing the number of regulatory and administrative filings required to effect the Transaction. To the extent practicable, shareholder approval of the Transaction shall be sought by Saba at its Annual Meeting, which is to be held about the end of May 1998. Prior to the time that Saba is required to file its preliminary proxy materials with the Securities and Exchange Commission (the "Commission"), Omimex shall endeavor to seek the approval of its shareholders to the Transaction, to the end that such approval shall be disclosed in the definitive proxy material of Saba. 3. The Transaction shall be effected in such manner that the division of shares among the existing shareholders of Saba and the existing shareholders of Omimex after giving effect to the Transaction, shall be based upon the Net Asset Values of the respective companies as at the close of business on December 31, 1997, adjusted as provided in paragraph 6 of this agreement. The parties shall cause the Net Asset Values of each of the companies to be determined according to the formula contained in this agreement. In the Transaction, Saba shall issue that number of shares of Stock to the shareholders of Omimex such that, on a primary basis, the shareholders of Saba shall retain that proportion of shares issued and outstanding at the consummation of the Transaction as the Net Asset Value of Saba bears to the combined Net Asset Values of Omimex and Saba, after making the adjustment provided for in paragraph 6. Net Asset Value means the excess of the value of assets over the value of liabilities as shown on the Consolidated Balance Sheet of the apposite company at December 31, 1997, with the following adjustments: a.) The account for Oil and Gas Properties shall be eliminated and replaced by a dollar figure representing the sum of the following; i ) the present worth, calculated at a ten percent discount in accordance with the requirements of the Commission of the proved reserves of the company, ii) the present worth, calculated at a ten percent discount in accordance with the standards of the American Society of Petroleum Engineers ("SPE") of the probable reserves of the company, multipled by twenty-five percent (25%), iii) the present worth, calculated at a ten percent discount in accordance with the standards of the SPE of the possible reserves of the company, multiplied by ten percent (10%), and (iv) 200 % of the Booked Cost of exploratory oil and gas prospects; b.) The account for Land shall be eliminated and replaced by the fair market value of all real estate owned by the company. The fair market value shall be determined by an appraiser selected by mutual agreement of the parties, having knowledge of the values of land in the locale in which such land is situate and who on a regular basis provides appraisal services for that type of land to banks and other financial institutions in the locale; to the extent that oil and gas producing properties are owned in fee by a company, the fair market value of the land shall be determined in such manner as to reflect the fact that its use is limited by the oil and gas operations during the period in which the Engineers have determined that the wells on such land may be economically produced; c.) Any good will appearing on the balance sheet shall be eliminated; d.) The account for accumulated depreciation, depletion and amortization shall be eliminated; and e.) The accounts for Commitments and Contingencies and Stockholders Equity shall be eliminated, but if the amounts shown thereon at March 31, 1998 are materially greater than the amounts shown as at September 30, 1997 there shall be an appropriate adjustment to the Net Asset Values to reflect the increase; f.) In the case of Saba, the asset accounts, to the extent not adjusted in accordance with other provisions of this section, shall be adjusted by eliminating therefrom the carrying cost of the assets which are to be distributed to its shareholders in accordance with paragraph 4. b.)of this agreement and the liabilities shall be reduced by those assumed by SPI in accordance with such paragraph. In determining future net revenues for each of the companies, the engineers evaluations prepared for the respective companies by Netherland, Sewell & Company (with respect to all properties save Canada) and Sproule & Associates and Ryder-Scott & Company (collectively, the "Engineers") as at January 1, 1998 shall be employed. It is recognized that the companies have interests in common properties and that the valuations of such properties should be proportionate to the interests of the companies therein, save with respect where Omimex is the operator of one or more of such properties, in which case a reasonable proportionate increase in the present worth of such property will exist to reflect the value of the operator's position. For purposes of this paragraph 3, Booked Cost shall mean the sum of all payments made to third parties to secure, maintain or preserve a property interest, including bonuses, geological and geophysical expense, accumulated rentals and the cost of purchasing seismic and other geophysical and geochemical data respecting the property, and shall include an allocation of general and administrative expenses and the salaries and fringe benefits of employees of the apposite company. In the case of the Aughton Prospect, such costs shall also include drilling, testing and completion costs, unless at the date of the Closing the apposite prospect shall have had a dry test well drilled by Saba on such prospect, in which case all costs relating to such prospect shall be eliminated. 4. The definitive agreements shall contain warranties and representations and conditions to closing all of which are customary for transactions of the nature of the Transaction. In addition, the closing of the Transaction shall be conditioned upon: a) Issuance of a fairness opinion to the Board of Directors of Saba to the effect that the Transaction is fair from a financial point of view to Saba and its shareholders, that, in the opinion of the investment banking firm rendering such opinion (which shall be a firm of Saba's choice) the consummation of the Transaction will not cause an adjustment to the conversion or exercise prices, respectively, of Saba's 6% Senior Subordinated Debentures or the Warrants issued in connection with the issuance of such Debentures or in the conversion price of Saba's 9% Convertible Subordinated Debentures; b) The divestiture, in the form of a divisive reorganization or such other mechanism as shall be mutually acceptable to the parties which shall accomplish the same purpose without adverse tax consequences to either party or its shareholders, by Saba of all of its California and Indonesian assets, including the Behemoth Prospect and the well drilling thereon, the Cat Canyon oil field and all of the stock of Santa Maria Refining Company, subject to the following: i) debt associated with such assets owned to BankOne Texas, amounting to approximately $5.9 million (with the exact amount to be verified prior to closing), and ii) all other liabilities, matured or contingent, directly related to such assets; the same to occur simultaneously with the Transaction, and the receipt by Saba of an opinion of counsel of Saba's choice, in form and substance satisfactory to Saba, to the effect that such divestiture will not be treated as a dividend taxable upon receipt to the shareholders of Saba; c) The receipt by each of the parties of an opinion from their respective counsel in form and substance satisfactory to such party, to the effect that the Transaction will be treated as a reorganization under section 368(a) of the Internal Revenue Code and that neither corporation nor its shareholders shall recognize income as a consequence thereof; d) The approval of the Transaction by the shareholders of Saba; e) The approval for listing on the American Stock Exchange, upon official notice of issuance, of the shares of Stock to be issued to the shareholders of Omimex in the Transaction; f) The receipt of all material governmental approvals requisite to the consummation of the Transaction, including the expiration of the waiting period under the Hart-Scott-Rodino Anti-trust Improvements Act; g) The agreement shall include a warranty and representation from Saba to the effect that it is then in material compliance with the public reporting requirements under the Securities Exchange Act of 1934, as amended; and h) Issuance of fairness opinion to Omimex from advisors of its choice that the transaction is fair to Omimex and satisfaction of Omimex, by way of the fairness opinion described above that the distribution of the assets pursuant to paragraph 5 below, will not materially and adversely affect the ability of the merged company to support its debt. 5. The Transaction shall be structured in such a manner as to avoid the recognition of income or loss to any party or its shareholders and to create operational efficiencies for each of the parties. To such end, at the consummation of the transaction, all of the California and Indonesian assets of Saba shall be transferred, subject to liabilities, to SPI. and the shares of such corporation distributed to the shareholders of Saba as at the record date selected by Saba or, if counsel advises that the same cannot be accomplished without incurring adverse tax consequences, the Transaction shall be modified in such manner as shall be mutually acceptable to both parties and which shall achieve the same objective without incurring adverse tax consequences. In structuring the transaction, recognition shall be given to the fact that Omimex, as a business matter, has chosen not to operate in the State of California or the Republic of Indonesia and that the reason for the requirement of the distribution of the stock of SPI to shareholders of Saba is Omimex's refusal to consummate the transaction if California and Indonesian operations are included. Omimex presently holds an interest in the California properties listed on Exhibit A to this agreement which it shall dispose of prior to the consummation of the Transaction. 6. The effective date of the Transaction shall be March 31, 1998 or such other date as the parties shall mutually agree. The Net Asset Values of the companies shall be adjusted to the effective date. Such adjustment shall be made in accordance with customary practices, except that the Net Asset Values of oil and gas properties shall be adjusted by reducing the volumes of oil and gas produced to such date multiplied by the assumed price employed by the Engineers in their respective reserve studies. Saba presently has outstanding its Series A Convertible Preferred Stock (the "Preferred Stock"), which is convertible and redeemable at 115% of stated value, which is $10 million. An adjustment to Saba's Net Asset Value to reflect the existence of the Preferred Stock in the amount of $11.5 million shall be made to treat the Preferred Stock as if it were debt.. At closing, there shall be a further adjustment to Saba's Net Asset Value to reflect any conversions of the Preferred Stock by crediting Saba's Net Asset Value with 115% of the stated value of any Preferred Stock then converted. A similar adjustment shall be made to reflect the conversion of any of Saba's 9% Convertible Subordinated Debentures. In addition, Saba's Net Asset Value shall be increased to reflect its acquisition subsequent to December 31, 1997 of additional interests in its Potash Dome and Manila Village properties. Each party shall bear its own legal and accounting costs in respect of the Transaction and the Net Assets Values of each shall be adjusted based upon reasonable estimates thereof. The costs of CIBC-Oppenheimer, which has been retained by Saba, shall be charged against the Net Asset Values of Saba to the extent that such charges are for brokerage or financial advisory services; the costs of such firm in respect of rendering a fairness opinion shall be borne by the merged company and shall not result in an adjustment of Net Asset Values. 7. Pending the Closing, each party shall conduct its business in the ordinary course and not make or commit to make any expenditures in excess of $50,000 in a single or related series of transactions without the consent of the other party, which consent will not be unreasonably withheld. The foregoing shall not prevent any party from fulfilling contractual obligations presently existing requiring the expenditure of sums in excess of such amounts. Pending the Closing, neither party will dispose of any material assets, declare, set aside or pay any dividends, enter into any partnerships, joint ventures or other arrangements not in the ordinary course of business. No party without the consent of the other shall issue or commit to issue any material amount of capital stock or securities convertible into capital stock, except that Saba shall be permitted to incur straight debt not in excess of $75 million, either publicly, institutionally or a combination on such terms as its Board of Directors may approve and may fulfill outstanding commitments. Any costs incurred in obtaining such debt shall be the responsibility of Saba, unless the Transaction is consummated, in which case the same shall be the obligation of the merged company. 8. Pending execution of definitive agreements, neither party will make any public announcement respecting the matters contained herein without the prior written consent of the other, save any announcement which, upon the written advice of counsel, is required of a party to comply with the requirements of federal securities laws or the regulations of a national securities exchange or market system. 9. This agreement and the definitive agreements shall be subject to the approval of the Boards of Directors of each of Saba and Omimex, which each party shall seek to obtain no later than March 17, 1998 and as soon as practicable after agreement has been reached on definitive agreements, respectively. Each of such agreements shall be governed by the laws of the State of California relating to contracts executed and to be performed within such state, except that with respect to matters relating to corporate governance, the laws of the respective state of incorporation shall apply. No action shall be maintained on or with respect to this letter in any court other than a federal or state court siting in the Southern District of California or the County of Santa Barbara, respectively, it being the agreement of the parties that such courts shall have exclusive jurisdiction over any disputes arising under or with respect to this letter. The parties agree to arbitrate any disputes arising hereunder in accordance with the rules of commercial arbitration of the American Arbitration Association, such arbitration shall be shared by the parties equally. An arbitral award shall be subject to judicial review and the arbitrator shall have no authority to award other than compensatory damages. The arbitrator shall have no authority to modify the terms of this agreement. 10. The definitive agreements shall provide a reasonable period of time for the parties and their respective consultants to conduct and satisfy itself with the results of a due diligence of the other, its assets and liabilities and to ensure that the warranties and representations made by such party shall be true as at the Closing. The Closing shall be held at the offices of Saba in Santa Maria, California or at such other place as shall be mutually agreeable. All warranties and representations shall expire on the Closing. 11. The definitive agreements shall further provide that the executive offices of the merged company upon consummation of the Transaction shall be located in Fort Worth, Texas, that Mr. Naresh K. Vashisht shall be the President and Chief Executive Officer, and that the members of the Board shall be five, two of which shall be nominated by the present shareholders of Saba and three of which shall be nominated by the present shareholders of Omimex. 12. If definitive agreements shall not have been agreed upon and executed by April 15, 1998, this agreement shall then terminate and neither party that has acted reasonably and in good faith in an effort to achieve a mutually agreeable set of definitive agreement consistent with the terms hereof shall have any liability or obligation to the other by reason of such failure to agree; provided that the Board of Saba in the exercise of its fiduciary duties may receive and consider offers, solicited and unsolicited, competitive with this agreement and may in the exercise of such duty accept one or more of such offers and discontinue efforts to reach a definitive agreement. 13. A party may terminate this agreement and any obligation to further negotiate or perform it obligations hereunder or under the definitive agreements, without incurring any liability to the other party should the number of shares of Stock to be issued to the shareholders of Omimex in the Transaction be less than fifty-five percent (55%) or more than sixty percent (60%) of the shares outstanding immediately after consummation of the Transaction. 14. Notices. Any notices required or permitted to be given under the terms of this Agreement shall be sent by certified or registered mail (return receipt requested) or delivered personally or by courier (including a recognized overnight delivery service) or by facsimile and shall be effective twp days after being placed in the mail, if mailed by regular U.S. mail, or upon receipt, if delivered personally or by courier (including a recognized overnight delivery service) or by facsimile, in each case addressed to a party. The addresses for such communications shall be: If to Saba: Saba Petroleum Company 3201 Skyway Drive Santa Maria, California 93455 Attention: Chief Executive Officer Facsimile: (805) 347-1072 If to Omimex: Omimex Resources, Inc. 5608 Melby Fort Worth, Texas 70107 Attention: Chief Executive Officer Facsimile: (817) 735-8033 15.The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party. If the foregoing provides an accurate recapitulation of our understanding and a binding agreement on the part of Omimex, kindly so indicate by signing and returning on copy of this letter prior to March 16, 1998, after which this letter may no longer be accepted and will terminate if not theretofore accepted. Very truly yours, SABA PETROLEUM COMPANY By/s/ Ilyas Chaudhary, President ACCEPTED AND AGREED TO ON THIS DAY OF MARCH 1998 OMIMEX RESOURCES, INC. By/s/ Naresh Vashisht, President and Chief Executive Officer EX-10.2 3 PRESS RELEASE ANNOUNCING THE PROPOSED COMBINATION EXHIBIT 10.2 News Release For Immediate Release March 18, 1998 For more information, please contact: Irwin Kaufman (702) 242-8281 Proposed Combination With Omimex Resources, Inc. Santa Maria, California: Saba Petroleum Company (AMEX:SAB) and Omimex Resources, Inc., a privately held Fort Worth oil and gas company, jointly announced that they had entered into a preliminary agreement to combine the two companies. Saba's assets in California will be excluded from the combination and will be incorporated for the benefit of the existing Saba shareholders. Omimex and Saba own joint oil and gas interests in Colombia and Michigan with Omimex being operator of these interests. Omimex also owns oil and gas assets in the midcontinent and Rocky Mountain region of the U.S. and in Canada. In addition, it holds significant exploration acreage in Colombia. Saba also owns oil and gas assets in the midcontinent and Gulf Coast regions of the U.S. and in Canada. In addition, it holds significant exploration blocks in Indonesia and the United Kingdom. The division of shares in the combined company, which will operate under the name Omimex, will be based upon the respective net asset values of the companies. It is expected that the assets and revenues of the combined company will be approximately double that of Saba. It is intended that the combined company will be a publicly traded corporation. The Management of Omimex will assume management of the combined companies. Consummation of the transaction is subject to a number of conditions, including negotiation of definitive agreements, agreement on structure of the combination, approval of Saba's Board and shareholders, regulatory approvals, completion of due diligence and receipt of favorable legal opinions. Closing of the transaction is expected to take approximately three months. Ilyas Chaudhary, Chairman and Chief Executive Officer of Saba, stated that "The proposed combination with Omimex brings to the combined companies the considerable talents of both the Omimex staff and those of Saba's midcontinent operations group. In addition, it dramatically increases the size of both companies and proportionately reduces the debt burden on the combined companies. The exclusion of the California assets will permit the shareholders of Saba to capture the values inherent in this asset base in addition to owning shares in a company significantly larger than Saba. Saba's California staff will be able to focus its attention on our California based assets, while Omimex will be able to focus on our other assets." Naresh Vashisht, Chairman and Chief Executive Officer of Omimex, stated that he "is excited about the combination because the increase in size that will result from the combination of the two companies, will, in addition to providing for a timely development of the substantial non-producing reserves of the combined companies, and also permit Omimex to participate in the potentially large exploration prospects which exist in the two companies in Colombia, Indonesia, and the United Kingdom." Saba Petroleum Company is an independent energy company with oil and gas production and development activities in North America and Colombia. In the United States, the Company's primary areas of activity are California, Louisiana and New Mexico. The Company also has large land positions and exploration options on exploratory projects in the U.S.A., Indonesia and the United Kingdom. Safe Harbor for Forward Looking Statements Except for historical information contained herein, the statements in this Release are forward-looking statements that are made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties which may cause the Company's actual results in future periods to differ materially from forecasted results. These risks and uncertainties include, among other things, volatility of oil prices, product demand, market competition, risks inherent in the Company's international operations, imprecision of reserve estimates, the availability of additional oil and gas assets for acquisition on commercially reasonable terms, and the Company's ability to replace and exploit its existing oil and gas reserves. These and other risks are described in the Company's Annual Report on Form 10-KSB and in the Company's other filings with the Securities and Exchange Commission. -----END PRIVACY-ENHANCED MESSAGE-----