Mr. Mohammad Fazil reports

SABA ENERGY ENTERS INTO FARM-IN FOR OFFSHORE ASSETS IN THE REPUBLIC OF THE PHILIPPINES

Saba Energy Ltd. has entered into a heads of agreement (HOA) dated Jan. 16, 2026, with Nido Petroleum Philippines Pty. Ltd., a non-arm's-length party, with the purpose of Saba to farm in to two offshore Philippine petroleum service contracts. Nido is owned 100 per cent by Chaudhary Family Trust, which is the controlling shareholder of Saba Energy. The contract areas are known as: (1) Philippine petroleum service contract No. 54 (SC54); and (2) Cadlao development and production petroleum service contract (DPPSC).

Petroleum service contract No. 54 farm-in key terms:

• 550-square-kilometre service contract area;
• Water depths of 50 to 110 metres;
• Saba will farm in for a 60-per-cent participating interest and will pay its proportionate share of well and completion costs;
• Other partners -- Nido, 27.5-per-cent interest; and TGI World, 12.5-per-cent interest;
• Saba will be the operator of SC54;
• Three discovery wells drilled -- Nido 1-X1 discovery in 1979 and tested at 1,500 barrels of oil per day (bopd); Yakal-1 discovery in 2009 and tested at 3,000 bopd initial production. Both 1X1 and Yakal-1 require completion;
• Tindalo-1 discovery in 2009 and had initial production of 19,000 bopd. The well produced 270,000 barrels of oil before it was shut in due to water encroachment.

Cadlao DPPSC farm-in key terms:

• 914-square-kilometre service contract area;
• Water depth of 93 metres;
• Saba will farm in for a 52.727-per-cent participating interest and will pay its proportionate share of well and completion costs;
• Other partners -- Philippine National Oil Company, 20-per-cent interest; and five minority partners, with 27.273-per-cent interest;
• Saba will be the operator of Cadlao;
• Amco discovery wells drilled in 1979 with production from 1982 to 1992. Total oil recovery of 11.1 approximately millions of barrels oil equivalent (mmboe). Remaining internal estimates of additional recovery is approximately 6.8 mmboe:
  • Boes (or mcfges or other applicable units of equivalency) may be misleading particularly if used in isolation. A boe conversion ratio of six thousand cubic feet (mcf) to one barrel (bbl) (or an mcfge conversion ratio of one barrel to six thousand cubic feet) is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

Terms and conditions

The farm-in is subject to:

• Standard due diligence procedures, as well as customary representations, warranties and closing conditions;
• Ward/grant of approval by the Department of Energy, Philippines, of the Cadlao DPPSC to the Saba and Nido;
• Saba raising $7-million (U.S.) by April 15, 2026;
• Signing of a definitive farmout agreement by the parties;
• Approval of the TSX Venture Exchange, if so required.

The company does not expect anticipate an RTO (reverse takeover) or fundamental acquisition with the financing and the acquisition.

Financing

The company plans to raise $7.5-million (U.S.) via a convertible debenture private placement, subject to TSX Venture Exchange approval. The debenture will be for a three-year term with interest of 12 per cent per annum, payable quarterly. The conversion price will be 35 U.S. cents, subject to acceleration if the company shares trade above 65 U.S. cents per share for 10 consecutive business days.

About Saba Energy Ltd.

The company is a publicly traded entity listed on the TSX-V under the symbol SABA with oil and assets in northeastern British Columbia and heavy oil assets in Alberta.

We seek Safe Harbor.