Exhibit 10.3



October 8th, 1998                                           Randeep S. Grewal
                                                               Chairman & CEO


Mr. Ilyas Chaudhary
Chairman of the Board
Saba Petroleum Company
3201 Airpark Drive Suite 201
Santa Maria CA 93455

Re: Preferred Series A Stock

Dear Ilyas,


In view of our various  discussions  relating to Horizontal  Ventures Inc (HVNV)
acquiring the referenced stock from Rose Glen, we hereby confirm the following:

1.   Following  the  acquisition  of the 7000  shares.  or greater,  of Series A
     Preferred  Stock by HVNV from Rose Glen,  HVNV will convert all of the Saba
     Preferred  Series A Stock acquired by it, into common Saba stock at a price
     of $2.50 per share.  The total value of the conversion will be equal to the
     price HVNV pays Rose Glen inclusive of all accrued  interest and dividends.
     Such conversion will take place on or before December 30th 1998.

2. Upon  conversion,  Saba will  provide one seat on the Board in a Board not to
exceed five.

3.   At  conversion,  HVNV will waive all defaults in existence  that would have
     been acquired by it.  Additionally HVNV waives any future defaults that may
     result from any action or inaction from HVNV

4.   Counsel to HVNV will file any required  Proxy and  Registration  Statement.
     Saba will  diligently  provide all required  assistance  documents and make
     available counsel as required.

We look forward to a long -term partnership with all the fellow shareholders and
yourself.


Best Regards,

/s/ Randeep Grewal

                          ON BEHALF OF SABA PETROLEUM COMPANY
                             ACCEPTED AND AGREED TO
                        On this 8th day of October, 1998

                          By: /s/ Ilyas Chaudhary
                                Chairman and CEO