FORBEARANCE AGREEMENT

         THIS AGREEMENT is made and entered into this 19th day of April 1999, by
and between  BANK ONE,  TEXAS,  N.A.  ("Bank  One") and SABA  PETROLEUM  COMPANY
("Saba"),  on behalf of itself and certain of its  Subsidiaries and GREKA ENERGY
CORPORATION ("GREKA").

                                               R E C I T A T I O N S :

         A. Saba and Bank One are  parties to that  certain  First  Amended  and
Restated Loan  Agreement  dated as of September 23, 1996, as heretofore  amended
(the "Loan Agreement").

         B. Events of Default and Unmatured  Events of Default have occurred and
are continuing under the Loan Agreement.

         C. Bank One has notified  Saba of such Events of Default and  Unmatured
Events of  Default,  and has  notified  Saba that Bank One has  accelerated  and
declared  immediately due and payable the outstanding  principal  balance of the
Loans, plus all accrued, unpaid interest thereon.

         D. Bank One has also sent written notice to each of Saba's Subsidiaries
that are Guarantors (other than Sabacol Corporation  ("Sabacol")) demanding that
each  such  Guarantor  repay  the  Loan,  in  accordance  with the  terms of its
Guaranty.

         E.  Bank  One has  filed a Proof of  Claim  in the  Sabacol  Bankruptcy
asserting its right to receive payment on the Loan from Sabacol  pursuant to the
terms of Sabacol's Guaranty.

         F. GREKA has notified Bank One of the pendency of certain  transactions
involving Saba and/or certain of its  Subsidiaries,  and has requested that Bank
One forebear from exercising its remedies under the Loan Agreement, at law or in
equity  (collectively,  the "Remedies") in order to afford GREKA the opportunity
to close certain of such pending  transactions and make certain partial payments
to Bank One to be credited to the Loan, and Bank One is willing to agree to such
forbearance on the terms set forth herein:

         NOW,  THEREFORE,  for and in  consideration  of the  premises,  for the
mutual  benefits  to be  derived  herefrom,  and for  other  good  and  valuable
consideration,  the adequacy of which is hereby  acknowledged by each party, the
parties hereto agree as follows:

         1. The terms "Bank of New York  Transaction,"  "EnerVest  Transaction,"
"Motion to Sell," "Omimex Transaction,"  "Sabacol Bankruptcy," "SETI Properties"
and  "Transactions"  shall have the  meanings  set forth on Exhibit  "A" to this
Agreement.  All other  capitalized  terms used in this Agreement,  without being
defined herein, shall have the meanings set forth in the Loan Agreement.

                                       1
<PAGE>


         2. Saba and GREKA  hereby  represent  and  warrant to Bank One that the
matters stated in the Compliance  Certificate dated March 11, 1999, delivered by
Saba to Bank One,  and the matters  stated in the letter  dated March 11,  1999,
from Mr. Randeep S. Grewal on behalf of Saba to Mr. Randy Durant of Bank One and
in the  enclosures  referred to in that letter,  were true and correct as of the
date  thereof  and  continue  to be  true  and  correct  as of the  date of this
Agreement.

         3. Bank One hereby  agrees that it shall  forebear from the exercise of
its  Remedies  through  and  including  May  30,  1999,  subject  to each of the
following conditions being timely met:

                  a.  Prior to the  hearing  on the  Motion  to  Sell,  which is
         currently  scheduled  to be heard on April 23,  1999,  Bank One and the
         parties to the Omimex  Transaction shall have entered into an agreement
         in substantially  the same form as that attached hereto as Exhibit "B,"
         and incorporated herein.

                  b. On or before April 30,  1999,  an order shall be entered by
         the court in which the Sabacol  Bankruptcy  is pending,  following  its
         hearing on the Motion,  approving the closing of the Omimex Transaction
         on or before May 30, 1999.

                  c. The Bank of New York  Transaction  shall close on or before
         April 30, 1999, and  contemporaneously  with such closing, the cash sum
         of $7,000,000.00 will be wire transferred  directly to Bank One, Texas,
         N.A., Dallas, Texas 201, A.B.A. Number 111000614,  BENF-Commercial Loan
         Serving Center- South Region,  for credit to Account Number 1065151010,
         Borrower:  Saba Petroleum Company,  Obligor No. 7417315869,  Obligation
         No. 91, Attn: Special Servicing, Commercial Loan Servicing Center-South
         Region, to be applied against the outstanding balance of the Loan.

                  d. On or before May 14, 1999, Sabacol shall have duly executed
         and delivered to Bank One a recordable  Mortgage or Deed of Trust,  and
         corresponding  Financing  Statement  ("Security  Instruments")  in form
         acceptable to Bank One, pursuant to which the properties to be assigned
         to Sabacol or its affiliates in connection with the Omimex  Transaction
         shall be  subjected  to liens and  security  interests in favor of Bank
         One,  securing all of the Obligations  under the Loan  Agreement.  Such
         Security  Instruments  shall  be held by Bank  One,  and  shall  not be
         recorded,  unless  and until  Bank One gives its  consent  to the final
         Closing of the Omimex  Transaction  (as such term is defined in Section
         9.1 of the Asset  Purchase  Agreement  attached  as Exhibit  "B" to the
         Motion to Sell),  and  contemporaneously  executes  and delivers to the
         Omimex  Group a release of the liens  that have been  granted by Omimex
         Resources,  Inc.  in favor of Bank One with  respect to the  properties
         being conveyed from the Omimex Group to Sabacol  pursuant to the Omimex
         Transaction.

                  e. The EnerVest  Transaction  shall close on or before May 29,
         1999,  and   contemporaneously   with  such  closing  of  the  EnerVest
         Transaction,  the cash sum of $10,000,000.00  shall be wire transferred
         to Bank One in accordance with the wire transfer instructions set forth
         in paragraph 3c., to be applied to the outstanding balance of the Loan.


                                       2
<PAGE>


                  f. Each of the Transactions  shall be closed  substantially in
         accordance with the terms of the  documentation  made available to Bank
         One as of the date of this Agreement, as described in the definition of
         each such Transaction on Exhibit "A" attached hereto.

                  g. Neither Saba nor any of the Guarantors, subsequent to April
         13, 1999, shall have caused or permitted any act or event to occur that
         gives  rise to a new Event of  Default  or  Unmatured  Event of Default
         under  the Loan  Agreement,  which did not  already  exist on April 13,
         1999.

         4. Upon the  failure  of any of the  foregoing  conditions,  Bank One's
agreement  to  forebear  from the pursuit of its  Remedies  shall  thereupon  be
terminated,  and Bank One thereafter  shall be free to pursue any and all of its
Remedies; provided, however, that no such termination of Bank One's agreement to
forbear from the exercise of its Remedies shall be  retroactive  with respect to
any of the  Transactions  closed  with  Bank  One's  consent  prior  to any such
termination.

         5. To the extent that all of the conditions set forth in paragraphs 3a.
through g. have been  satisfied,  if any Event of Default or Unmatured  Event of
Default  exists and is  continuing  subsequent  to May 30, 1999,  Bank One shall
thereafter be free to pursue any and all of its Remedies.

         6. Time is of the essence in the satisfaction in each of the conditions
set forth in  paragraph  3 of this  Agreement,  and no such  condition  shall be
deemed to have been satisfied unless it is fully and completely satisfied by the
time stated in paragraph 3 hereof.

         7.  Nothing  in this  Agreement  is  intended  to  amend  nor  shall be
construed to amend the Loan  Agreement or any of the Loan  Documents,  except as
expressly set forth herein.

         8. This  Agreement may be executed in multiple  counterparts,  and each
party agrees that the  counterpart  signature page executed on its behalf may be
collated with the  counterpart  signature  pages executed on behalf of the other
parties hereto to form a fully executed agreement. The parties hereto agree that
delivery of executed  counterparts  of this instrument may be made by facsimile,
and each  party  hereto  agrees to be bound by an  executed  counterpart  hereof
bearing the facsimile signature of such party's representative.

         Executed as of the date first set forth above.

BANK ONE, TEXAS, N.A.                           SABA PETROLEUM COMPANY

By: / s / Randall B. Durant                     By:   / s / Randeep S. Grewal
    ---------------------------------           -----------------------------
    Randall B. Durant, Vice President                 Randeep S. Grewal
                                                      CEO

                                                GREKA ENERGY CORPORATION

                                                 By:   / s / Randeep S. Grewal
                                                 -----------------------------
                                                       Randeep S. Grewal
                                                       CEO

                                       3

<PAGE>

                                   EXHIBIT "A"


         "Bank of New York  Transaction"  means that certain Loan Transaction as
described  in  Letter of Intent  dated  March 9,  1999,  between  BNY  Financial
Corporation, Santa Maria Refining Company and Saba.

         "EnerVest Transaction" means that certain Purchase and Sale Transaction
pursuant  to which the SETI  Properties  will be sold to EnerVest  Energy,  L.P.
pursuant to the form Purchase and Sale Agreement transmitted to counsel for Bank
One by e-mail on April 14, 1999, at e-mail address "mlgrove@porterhedges.com."

         "Motion to Sell" means that certain Motion for Order Authorizing Debtor
and  Debtor-in-Possession  to Sell all of its Real and Personal  Property Assets
pursuant to an Asset Purchase  Agreement with the Omimex Group Free and Clear of
all Liens and  Encumbrances  and upon  Consummation of the Sale, to Dismiss this
Bankruptcy  Case  and Set  Bar  Date  filed  by  Sabacol,  Inc.  in the  Sabacol
Bankruptcy.

         "Omimex  Transaction"  means that certain  Transaction as identified in
the  [Motion to Sell] filed on behalf of Sabacol in the  Sabacol  Bankruptcy  on
March 29, 1999.

         "Sabacol Bankruptcy" means that certain voluntary Chapter 11 proceeding
styled In re Sabacol,  Inc. initiated by Sabacol,  Inc. pursuant to its Petition
filed on or about  December 11, 1998 in the United States  Bankruptcy  Court for
the Central  District of  California,  Santa  Barbara  Division,  as Case No. ND
98-15855RR.

         "SETI Properties" means the Oil and Gas Properties owned by Saba Energy
of Texas, Inc., expressly excluding any and all of such properties (if any) that
were previously owned by other Subsidiaries of Saba and are subject to a lien or
security interest in favor of Bank One.

         "Transactions"  means  the  Omimex  Transaction,  the  Bank of New York
Transaction and the EnerVest Transaction.

                                       4



                               FIRST AMENDMENT TO
                              FORBEARANCE AGREEMENT

         THIS FIRST AMENDMENT  ("Amendment")  is made and entered into this 30th
day of April,  1999, by and between BANK ONE, TEXAS,  N.A. ("Bank One") and SABA
PETROLEUM COMPANY ("Saba"),  on behalf of itself and certain of its Subsidiaries
and GREKA ENERGY  CORPORATION  ("GREKA")  who are  sometimes  referred to herein
colelctively as the Parties.

                             R E C I T A T I O N S :

         A.       The  Parties  entered  into that certain Forbearance Agreement
                  dated April 19, 1999 ("Agreement);

         B.       The Parties desire to amend the Agreement; and

         C.       All capitalized  terms used in this  Amendment,  without being
                  defined  herein,  shall  have the  meanings  set  forth in the
                  Agreement.

         NOW,  THEREFORE,  for and in  consideration  of the  premises,  for the
mutual  benefits  to be  derived  herefrom,  and for  other  good  and  valuable
consideration,  the adequacy of which is hereby  acknowledged by each party, the
parties hereto agree as follows:

         1.       Bank One' agreement that it shall forbear from the exercise of
                  its Remedies through and including May 30, 1999 as provided in
                  Section 3 of the Agreement shall be extended to June 11, 1999.

         2.       The amount of the cash sum that will be contemporaneously wire
                  transferred  directly to Bank One upon closing the Bank of New
                  York  Transaction as provided in Section 3(c) of the Agreement
                  shall be reduced from $7,000,000.00 to $6,000,000.00

         3.       The closing  date of May 29, 1999 as provided in Section  3(e)
                  of  the  Agreement  for  the  EnerVest  Transaction  shall  be
                  extended to June 11, 1999.

         4.       The  date  of May 30, 1999  as  provided  in  Section 5 of the
                  Agreement shall be amended to June 11, 1999.

         5.       All  other  terms  and  conditions  of  the  Agreement  remain
                  unchanged and in full force and effect.

Executed as of the date first set forth above.

BANK ONE, TEXAS, N.A.                       SABA PETROLEUM COMPANY

By: / s / Randall B. Durant                 By:   / s / Randeep S. Grewal
    ---------------------------------             -------------------------
    Randall B. Durant, Vice President             Randeep S. Grewal
                                                  Chairman, CEO & President

                                            GREKA ENERGY CORPORATION

                                            By:   / s / Randeep S. Grewal
                                                  -------------------------
                                                  Randeep S. Grewal
                                                  Chairman, CEO & President

                                       5
<PAGE>


                   AMENDED AND RESTATED FORBEARANCE AGREEMENT


         THIS AGREEMENT (the "Agreement") is made and entered into this 15th day
of July 1999, by and between BANK ONE, TEXAS,  N.A. ("Bank One"), SABA PETROLEUM
COMPANY ("Saba"), on behalf of itself and certain of its Subsidiaries, and GREKA
ENERGY CORPORATION ("GREKA").


                             R E C I T A T I O N S :

         A. Saba and Bank One are  parties to that  certain  First  Amended  and
Restated Loan  Agreement  dated as of September 23, 1996, as heretofore  amended
(the "Loan Agreement").

         B. Events of Default and Unmatured  Events of Default have occurred and
are continuing under the Loan Agreement.

         C. Bank One has notified  Saba of such Events of Default and  Unmatured
Events of  Default,  and has  notified  Saba that Bank One has  accelerated  and
declared  immediately due and payable the outstanding  principal  balance of the
Loans, plus all accrued, unpaid interest thereon.

         D. Bank One has also sent written notice to each of Saba's Subsidiaries
that are Guarantors (other than Sabacol Corporation  ("Sabacol")) demanding that
each  such  Guarantor  repay  the  Loan,  in  accordance  with the  terms of its
Guaranty.

         E. Bank One,  Saba and GREKA  have  heretofore  executed  that  certain
Forbearance  Agreement  dated  April 19,  1999,  as amended  by First  Amendment
thereto  dated  April  30,  1999   (collectively,   the  "Original   Forbearance
Agreement").

         F.  Certain of the events on which Bank One had based its  agreement to
forbear from the pursuit of its remedies under the Loan Agreement,  as set forth
in the Original Forbearance Agreement, have not occurred, but GREKA has notified
Bank One of the pendency of certain pending  transactions  involving Saba and/or
certain  of its  Subsidiaries,  and has  requested  that  Bank One  continue  to
forebear from  exercising  its remedies under the Loan  Agreement,  at law or in
equity  (collectively,  the "Remedies") in order to afford GREKA the opportunity
to close such pending  transactions  and make certain payments to Bank One to be
credited  to the  Loan,  and Bank  One is  willing  to  agree to such  continued
forbearance on the terms set forth herein:


                                       7

<PAGE>

         NOW,  THEREFORE,  for and in  consideration  of the  premises,  for the
mutual  benefits  to be  derived  herefrom,  and for  other  good  and  valuable
consideration,  the adequacy of which is hereby  acknowledged by each party, the
parties hereto agree as follows:

         1. All capitalized terms used in this Agreement,  without being defined
herein,  shall  have  the  meanings  set  forth in the  Loan  Agreement,  unless
otherwise provided herein.

         2. Saba and GREKA hereby represent and warrant to Bank One; and Randeep
S. Grewal, after having first been duly sworn, hereby recertifies to Bank One to
the best of his knowledge in his capacity as an officer of Saba and GREKA;  that
the matters he certified  in the  Compliance  Certificate  dated March 11, 1999,
delivered by Saba to Bank One, and the matters  stated in the letter dated March
11, 1999,  from Mr. Grewal on behalf of Saba to Mr. Randy Durant of Bank One and
in the  enclosures  referred to in that letter,  were true and correct as of the
date  thereof  and  continue  to be  true  and  correct  as of the  date of this
Agreement,  except for such  changes or  additions  as are noted on Exhibit  "A"
attached hereto.

         3. As a material part of the consideration for this Agreement, Saba and
GREKA hereby  specifically  represent  and warrant to Bank One that Saba and its
Subsidiaries  are in compliance  with the covenants set forth in sections  6.03,
6.06,  6.09,  6.10,  6.11  and  6.12 of the  Loan  Agreement;  and  Saba and its
Subsidiaries shall, and GREKA shall cause Saba and its Subsidiaries to, continue
to comply with all such sections of the Loan Agreement. The specific enumeration
in this section of certain representations, warranties and covenants in the Loan
Agreement  with  which  Saba and its  Subsidiaries  are in  compliance  and will
continue to comply is not intended,  and shall be construed in any way, to amend
any other  representation,  warranty or covenant in the Loan  Agreement or other
Loan  Documents,  or  constitute  a  waiver  by  the  Bank  of  Saba's  and  its
Subsidiaries' compliance therewith.

         4. Bank One hereby  agrees that it shall  forebear from the exercise of
its Remedies  through and including  September 15, 1999,  subject to each of the
following conditions being timely met:

                  a. The  representations and warranties set forth in paragraphs
         2 and 3 hereof shall continue to be true and accurate at all times, and
         neither Saba nor any of the  Guarantors,  subsequent to April 13, 1999,
         shall  have  caused or  permitted  any act or event to occur that gives
         rise to a new Event of Default or  Unmatured  Event of Default that did
         not already exist on April 13, 1999.

                  b. On or before the  twenty-fifth  (25th) day of each calendar
         month,  Saba shall have paid to Bank One all accrued,  unpaid  interest
         then due on the Loans.

                  c. On or before July 15, 1999,  Saba shall have entered into a
         term sheet  with a  reputable  financial  institution  or other  lender
         acceptable  to Bank One,  in its  discretion,  pursuant  to which  such
         lender has stated its willingness to fund a loan or loans to Saba on or
         before  September 15, 1999,  all or part of the proceeds of which would
         be used  to pay  off in full  the  outstanding  principal  balance  and
         accrued,  unpaid  interest  owed by Saba to Bank  One  under  the  Loan
         Agreement and related Loan Documents.


                  d.  Contemporaneously  with its  execution of this  Agreement,
         Saba shall have  delivered to Bank One true and complete  copies of all
         documents executed by Saba,  Sabacol,  Inc., or any of their Affiliates
         relating  to the  "Omimex  Transaction,"  as  defined  in the  Original
         Forbearance Agreement;  and Bank One shall be satisfied that the Omimex
         Transaction  was closed  substantially  in accordance with the terms of
         the  documentation  made  available to Bank One in connection  with the
         Original Forbearance Agreement.

                                       8

<PAGE>

         5. Upon the  failure  of any of the  foregoing  conditions,  Bank One's
agreement  to  forebear  from the pursuit of its  Remedies  shall  thereupon  be
terminated,  and Bank One thereafter  shall be free to pursue any and all of its
Remedies; provided, however, that no such termination of Bank One's agreement to
forbear from the exercise of its remedies shall be  retroactive  with respect to
any transactions closed with Bank One's consent prior to such termination.

         6. If any Event of Default or Unmatured  Event of Default exists and is
continuing  subsequent to September 15, 1999, Bank One shall  thereafter be free
to pursue any and all of its Remedies.

         7. Time is of the essence in the satisfaction in each of the conditions
set forth in  paragraph  4 of this  Agreement,  and no such  condition  shall be
deemed to have been satisfied unless it is fully and completely satisfied by the
time stated in paragraph 4 hereof.

         8.  Nothing  in this  Agreement  is  intended  to  amend  nor  shall be
construed to amend the Loan  Agreement or any of the Loan  Documents,  except as
expressly set forth herein.

         9. This  Agreement may be executed in multiple  counterparts,  and each
party agrees that the  counterpart  signature page executed on its behalf may be
collated with the  counterpart  signature  pages executed on behalf of the other
parties hereto to form a fully executed agreement. The parties hereto agree that
delivery of executed  counterparts  of this instrument may be made by facsimile,
and each  party  hereto  agrees to be bound by an  executed  counterpart  hereof
bearing the facsimile signature of such party's representative.












                                       9
<PAGE>

         Executed as of the date first set forth above.

BANK ONE, TEXAS, N.A.                       SABA PETROLEUM COMPANY

By: / s / Randall B. Durant                 By:   / s / Randeep S. Grewal
    ---------------------------------             -------------------------
    Randall B. Durant, Vice President             Randeep S. Grewal
                                                  Chairman, CEO & President




                                            GREKA ENERGY CORPORATION

                                            By:   / s / Randeep S. Grewal
                                                  -------------------------
                                                  Randeep S. Grewal
                                                  Chairman, CEO & President


The undersigned,  Randeep S. Grewal,  in his capacity as an officer of GREKA and
Saba,  after  having first been duly sworn,  on oath  disposes and says that the
certification  given by him in paragraph 2 of the  foregoing  instrument is true
and correct to the best of his knowledge:


                                            / s / Randeep S. Grewal
                                            -----------------------
                                            Randeep S. Grewal

         Subscribed and sworn to before me, the  undersigned  Notary Public,  by
the said Randeep S. Grewal on this 16th day of July, 1999.


                                             / s /  Ann Miller
                                             -----------------------------------
                                             Notary Public in and for the  State
                                             of New York


[Affix Notarial Seal]

                                       10