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Merger of energy firms nears



Energy companies Saba Petroleum and Omimex Resources Inc. are closer to
merging and creating a $65 million operation, company officials confirmed

Saba executives currently are considering the deal and joining the oil
operation, from debt restructuring to field operations worldwide, said Ilyas
Chaudhary, president and chief executive officer of the Santa Maria-based

Meanwhile, Saba failed to make a mandatory $9 million payment to a lender
last week. Company and lending officials are discussing an extension, possibly
rescheduling payment until after the proposed merger.``We are pleased with
the negotiations so far with Omimex and are confident that the current
negotiations with our primary lender for extension shall be resolved
satisfactorily,' Chaudhary said.

Saba and Omimex Resources began discussing a merger in mid-March. The
deal does not include Saba's assets in California.

The announcement failed to impress investors Monday, as Saba stock,
symbol SAB, dropped 1/16 points, closing at 3 7/16 points on the American
Stock Exchange.

The company's stock dropped below 4 points in late March, never recovering
the past five weeks. The decline follows Saba's financial report.

The company's revenue increased 8 percent to $36 million last year,
compared to $33.2 million in 1996, the company announced in late March.
But administrative and general expenses, along with dropping oil prices,
caused net income to fall 37 percent to $2.4 million last year, compared to
$3.8 million in 1996.
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