Saba Energy Enters Into Settlement Agreement for its Oil and Gas Assets in British Columbia

Saba Energy Enters Into Settlement Agreement for its Oil and Gas Assets in British Columbia

(TheNewswire)

 

Calgary, Alberta – TheNewswire - June 29, 2026 – Saba Energy Ltd. (“Saba” or the “Company”) (TSXV: SABA) announces entering into a settlement agreement dated June 10, 2026 (the “Settlement Agreement”) with the Court-appointed Receiver and Manager (the “Receiver”) of Blue Sky Resources Ltd. (“BSR”) regarding the British Columbia oil and natural gas assets (“BC Assets”) that Saba purchased in 2024 and 2025, from BSR, a related party of the Company. BSR is owned directly or indirectly by the significant shareholder and control person of Saba. BSR was petitioned into receivership on March 23, 2026 (the “Receivership Proceedings”). At the time of the Receivership Proceedings, BSR owed Saba approximately $2.8 million in connection with revenue from the BC Assets which was payable to Saba.

 

By way of background, Saba acquired the BC Assets pursuant to number of agreements as follows:

 

• an agreement between BSR and Saba made effective January 1, 2024 (the "2024 PSA"), whereby BSR agreed to sell to Saba 50% of the BSR's interest in certain petroleum and natural gas assets in British Columbia (the "First Licensed Assets") and 100% of the shares of Blue Sky Paus Ltd., for consideration in the form of Saba common shares valued at CAD $27,500,000 representing approximately 85% of the then-issued share capital of Saba (the "Saba Common Shares");  

 

• an agreement between BSR and Saba dated June 25, 2025, and made effective as of August 15, 2025 (the "2025 PSA"), whereby BSR agreed to sell to Saba 100% of BSR’s assets known as the Taber properties, 100% of BSR’s assets known as the Columbia properties, the remaining 50% of the BSR’s Alberta heavy oil and natural gas assets known as the Cold Lake properties which were not then owned by Saba (the "Cold Lake Assets") and the remaining 50% of BSR's British Columbia assets (the "Second Licensed Assets"), for an original purchase price of CAD $21,000,000 payable in cash;  

 

• an amending agreement dated effective July 14, 2025 (the "First Amendment"), the purchase price under the 2025 PSA was reduced from CAD $21,000,000 to CAD $13,000,000, and the scope of the Second Licensed Assets was redefined to: (i) include the remaining 50% of BSR's British Columbia assets not then owned by Saba; (ii) the remaining 50% of BSR’s interest the Cold Lake Assets which were not then owned by Saba; and (iii) to exclude 100% of BSR’s assets known as the Taber properties and 100% of BSR’s assets known as the Columbia properties which were originally included;  

 

• a second amending agreement dated effective October 7, 2025 (the "Second Amendment"), the payment terms under the 2025 PSA were further amended such that the purchase price of CAD $13,000,000 would be satisfied over time from production revenue generated by the Second Licensed Assets, with no obligation on Saba to make cash payments at closing (the 2024 PSA, the 2025 PSA, together with the First Amendment and the Second Amendment, collectively, the "Transactions").  

 

The Transactions were approved by shareholders in accordance with Multilateral Instrument 61-101 – Protection of Minority Securityholders in Special Transactions at meetings held on April 29, 2024, August 22, 2025, and accepted by the TSX Venture Exchange. By virtue of the Receivership Proceedings, a dispute arose over the ownership of the BC Assets which were originally owned and operated by BSR.

 

Following extensive negotiations, Saba entered into settlement agreements whereby the following will occur on an effective date (the “Effective Date”), conditional upon a number of factors, including approval of the Court, completion or waiver of certain conditions (the “Settlement Conditions”). In the event that the Settlement Conditions are not met on or before July 16, 2026, upon notice to Saba from the Receiver, the Settlement Agreement shall terminate and be of no further force or effect.  

 

Also, in connection with the transaction the principals of BSR agreed to return 50,353,694 Saba Common Shares issued in May 2024, as partial consideration for the acquisition of the BC Assets. The returned shares represent 85% of the shares issued by Saba as consideration for the BC Assets. The shares will be returned to treasury for cancellation. Saba’s significant shareholder will receive no collateral benefits in connection with the Settlement Agreement. Due to the Receivership Proceedings, Saba will not receive any of the $2.8 million owed to it by BSR.

 

The steps under the Settlement Agreement initially involve a reversion of Saba’s entire interest in and to the BC Assets. Upon the Effective Time, the BC Assets and associated interests shall be transferred on an "as is, where is" basis to, and vest in BSR absolutely, effective as of June 12, 2026 (the “Disposition”).

 

After the Effective Time, Saba shall have the right to elect to have the gas producing assets located in North East British Columbia, consisting of 58 natural gas wells and related interests (the “Laprise Assets”) transferred by BSR back to Saba on an "as is, where is" basis for nominal consideration. Saba will be required to provide written notice to BSR of its election within 30 days from the Effective Date (the "Election Notice"). However, if the required security deposit or other conditions required by the BC Energy Regulator or any other applicable government authority are not acceptable to Saba, in its sole discretion, Saba can reject the Laprise Assets. Saba only intends to proceed with the acquisition of the Laprise Assets if the conditions required by the BC Energy Regulator or any other applicable government authority are acceptable.

 

In addition, the Receiver has agreed to provide Saba with immediate access to the BSR accounting records in the Receiver’s possession in order for Saba to complete its audit. Saba has agreed to compensation the Receiver $20,000 to facilitate this access.  This will enable Saba to complete its audited financial statements for the year ended December 31, 2025, which were due to be filed April 30, 2026. Saba was unable to complete the audit as the Receiver refused to allow BSR, as operator, to provide Saba with the information necessary to complete its audit. Saba obtained a Management Cease Trade Order (“MCTO”) on May 1, 2026 due to the difficulty in obtaining the information. Saba intends to apply for an extension to the MCTO and expects to be in a position to file its audited financial statements by July 31, 2026.

 

The Receiver and Saba have agreed to cooperate and take all reasonably necessary steps to convey the BC Assets to BSR and to effect the transfer of any leases, rights, permits or approvals to give effect to this Settlement Agreement, including transfer of the Laprise Assets to Saba, as applicable.

 

Concurrently with the settlement and transfers, the recipients of the Saba Common Shares pursuant to the Transactions have agreed to tender an aggregate 50,353,694 of the shares received pursuant to the Transactions (85% of the aggregate Saba Common Shares received in the Transactions) back to the Saba for cancellation (the “Share Cancellation”).  Pursuant to TSXV Policy 5.3, consent to the Disposition has been received in writing from shareholders holding greater than 50% of the aggregate voting shares of Saba following the Share Cancellation.

 

About Saba Energy Ltd.

The Company is a publicly traded entity listed on the TSXV under the symbol “SABA” with oil and natural gas assets in Northeastern British Columbia and Alberta.

 

For Further Information

Saba Energy Ltd.

Mohammad Fazil

President, Chief Executive Officer, Corporate Secretary and Director

Email: mfazil@sabaenergy.ca

Phone Number: +1 (403) 613-7310

 

Cautionary Note Regarding Forward-Looking Statements

This press release contains statements that constitute “forward-looking statements” relating to the Settlement Agreement and the potential transfer of the Laprise Assets back to the Company. Such forward looking statements involve known and unknown risks, uncertainties and other factors that may cause the Company’s actual results, performance or achievements, or developments to differ materially from the anticipated results, performance or achievements expressed or implied by such forward-looking statements.

 

Although the Company believes, in light of the experience of its officers and directors, current conditions and expected future developments and other factors that have been considered appropriate that the expectations reflected in this forward-looking information are reasonable, undue reliance should not be placed on them because the Company can give no assurance that they will prove to be correct. When used in this press release, the words “estimate”, “project”, “belief”, “anticipate”, “intend”, “expect”, “plan”, “predict”, “may” or “should” and the negative of these words or such variations thereon or comparable terminology are intended to identify forward-looking statements and information. The forward-looking statements and information in this press release include: information relating to the Acquisition; and the exploration and development of the company’s assets. Such statements and information reflect the current view of the Company. By their nature, forward- looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements.

 

The forward-looking statements contained in this news release represent the expectations of the Company as of the date of this news release and, accordingly, are subject to change after such date. Readers should not place undue importance on forward-looking statements and should not rely upon this information as of any other date. The Company undertakes no obligation to update these forward-looking statements in the event that management’s beliefs, estimates or opinions, or other factors, should change.

 

THE TSXV HAS IN NO WAY PASSED UPON THE MERITS OF THE ACQUISITION AND HAS NEITHER APPROVED NOR DISAPPROVED THE CONTENTS OF THIS PRESS RELEASE.

 

NEITHER THE TSXV NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSXV) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS PRESS RELEASE.

  

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