SAH Sahara Energy Ltd

Sahara Energy Ltd. ("Sahara" or the "Company") (TSX VENTURE:SAH) (PINK
SHEETS:SAHRF) is pleased to announce that it has entered into a Memorandum of
Understanding (the "MOU") with King World International Holdings Limited
("King"). The MOU provides for a proposal to be made and accepted by creditors
of Sahara (the "Creditors Proposal"), a 6 for 1 consolidation of the common
shares (the "Common Shares") of Sahara (the "Share Consolidation") and an equity
private placement of up to 58,000,000 Common Shares on a post-consolidation
basis (the "New Shares") at a price of $0.05 per Common Share for gross proceeds
to the Company of up to $2.9 million (the "Private Placement"). Pursuant to the
MOU King will, subject to certain conditions, subscribe for 48,000,000 of the
New Shares to be issued pursuant to the Private Placement, representing $2.4
million of the potential gross proceeds to the Company. Pursuant to the MOU,
King will also advance, subject to certain conditions, an aggregate of $100,000
in the form of promissory notes secured by a first-ranking priority over the
assets of Sahara (the "Debt Financing" and, together with the Share
Consolidation and the Private Placement, the "Transactions").


The MOU will be superseded by a definitive agreement (the "Definitive
Agreement") in respect of the Transactions, which the parties anticipate will be
entered to on or about June 30, 2010.


Debt Financing

Upon granting of an order by the Court of Queen's Bench of Alberta providing
that funds advanced by King pursuant to the Debt Financing shall be entitled to
a first-ranking priority over all of the assets of the Company, King has agreed
to advance to Sahara an initial tranche of $50,000 (the "Initial Tranche").


Upon satisfactory completion of due diligence by King and its advisors on the
Company, King has agreed to advance a further and final $50,000 in connection
with the Debt Financing. King's due diligence is to be completed by no later
than June 30, 2010.


Share Consolidation

Sahara has undertaken in the MOU to propose the Share Consolidation to the
holders of the Common Shares (the "Sahara Shareholders") by way of a special
meeting to be held on an as yet determined future date (the "Special Meeting").
The Share Consolidation, if approved, will result in one (1) New Share being
issued for every six (6) Common Shares outstanding immediately prior thereto.


Further details with respect to the Share Consolidation and the Special Meeting
will be provided in subsequent press releases of the Company.


Creditors Proposal

Sahara has made the Creditors Proposal to its existing creditors on the
following basis:




--  Each unsecured creditor of Sahara will receive a cash payment of $0.15
    for each $1.00 owed by Sahara to such creditor; and 
--  Each secured creditor will receive a cash payment of $0.15 plus 17 New
    Shares for each $1.00 owed by Sahara to such creditor. 



If accepted by the creditors, payment pursuant to the Creditors Proposal will be
made within 60 days following the closing of the Private Placement.


Assuming acceptance of the Creditors Proposal, the Company expects to pay
approximately $542,280 and to issue 8,933,390 New Shares in settlement of the
claims of its secured and unsecured creditors. As the proving of claims has not
been finalized, these numbers may increase or decrease.


Private Placement

The New Shares issued pursuant to the private placement will be restricted from
trading for four months following the closing date, and New Shares purchased by
King will be subject to any applicable escrow periods imposed pursuant to the
policies of the TSX Venture Exchange ("TSXV") or applicable securities laws. Net
proceeds of the Private Placement will be used to fund the Creditors Proposal,
development drilling and workovers, land and seismic acquisition and for working
capital purposes.


Salman Partners Inc. is acting as financial advisor to Sahara in respect of the
Transactions, including the Private Placement and will receive a fee payable in
cash in the amount of 10% of the gross proceeds raised pursuant to the Private
Placement and warrants ("Brokers Warrants") entitling the holder to acquire a
number of shares equal to 10% of the shares issued pursuant to the Private
Placement. The Brokers Warrants will be exercisable for a period of 12 months
from the date of closing of the Private Placement at an exercise price of $0.05
per Broker Warrant.


A finder's fee of 5 million warrants (the "Finder Warrants") will, subject to
the requisite TSXV approvals, be issued to an arm's length party in connection
with the Private Placement. The Finder Warrants are exercisable for a period of
12 months from the date of closing of the Private Placement at an exercise price
of $0.05 per Finder Warrant.


The completion of the Private Placement, and in particular the proposed
subscription by King for 48,000,000 of the New Shares, will, if completed,
result in the creation of a new "Control Person" (as such term is defined in the
policies of the TSXV). The Change of Control will also be subject to the
approval of the Sahara Shareholders at the Special Meeting.


Upon completion of the Private Placement, and subject to approval of the TSXV,
the board of directors of Sahara will consist of five members, three of whom
will be appointed by Sahara which will result in a Change of Management (as such
term is defined in the policies of the TSXV). The Change of Management will also
be subject to the approval of the Sahara Shareholders at the Special Meeting.


Pro Forma Capitalization

Sahara currently has 38,036,302 Common Shares issued and outstanding. Following
the completion of the Share Consolidation and Creditors Proposal and assuming 58
million New Shares are issued pursuant to the Private Placement, Sahara will
have approximately 73.3 million New Shares outstanding.


King

King is a private Hong Kong investment holding company focused on developing
resource assets including minerals and oil & gas.


Corporate Strategy and Business Plan

Upon completion of the Transactions, Sahara plans to continue to be focused on
the accretive acquisition, exploration and development of oil and natural gas
assets in western Canada. Initially the Company will focus on workovers and
development drilling on its heavy oil assets at Lloydminster, Alberta.


Sahara has a solid asset base of undeveloped land and heavy oil wells exhibiting
long life and low decline rates. Sahara holds 2,931 acres of undeveloped land in
its core area of Lloydminster, and in Hayter, Bashaw and Sylvan Lake. Sahara has
identified three wells requiring low cost workovers which is expected to add 50
bbls/d of heavy crude oil. With seven locations identified, Sahara believes it
is poised for immediate growth in production.


Approvals

Completions of the Transactions are subject to a number of conditions, including
completion of satisfactory due diligence by King and the entering into of the
Definitive Agreement, and approvals, including, but not limited to, the approval
of the TSXV, Sahara Shareholders, creditors and relevant Chinese authorities.


Note Regarding Forward Looking Statements

This document contains forward-looking statements. More particularly, this
document contains statements concerning: the receipt of creditor approval of the
Creditor Proposal; the completion of the Transactions; the ownership of Sahara;
the use of proceeds from the Private Placement; the future strategy and focus
for the Company; future acquisitions and development and drilling projects; and
undeveloped land, reserves and production of Sahara.


The forward-looking statements are based on certain key expectations and
assumptions made by Sahara including expectations and assumptions concerning:
timing of receipt of required shareholder, creditor and regulatory approvals and
third party consents and the satisfaction of other conditions to the completion
of the Transactions; prevailing commodity prices and exchange rates, applicable
royalty rates and tax laws; future well production rates; reserve and resource
volumes; the performance of existing wells; the success obtained in drilling new
wells; the sufficiency of budgeted capital expenditures in carrying out planned
activities; and the availability and cost of financing, labour and services; and
future operating costs.


Although Sahara believes that the expectations and assumptions on which the
forward-looking statements are based are reasonable, undue reliance should not
be placed on the forward-looking statements because no assurance can be provided
that they will prove to be correct. Since forward- looking statements address
future events and conditions, by their very nature they involve inherent risks
and uncertainties. Actual results could differ materially from those currently
anticipated due to a number of factors and risks. These include, but are not
limited to, risks that required shareholder, creditor, regulatory and third
party approvals and consents are not obtained on terms satisfactory to the
parties within the timelines provided for in the MOU, the Definitive Agreement,
or at all, and risks that other conditions to the completion of the Transactions
are not satisfied on the timelines set forth in the MOU, the Definitive
Agreement or at all; the risks associated with the oil and gas industry in
general such as operational risks in development, exploration and production;
delays or changes in plans with respect to exploration or development projects
or capital expenditures; the uncertainty of reserve and resource estimates; the
uncertainty of estimates and projections relating to reserves, resources,
production, costs and expenses; health, safety and environmental risks;
commodity price, interest rate and exchange rate fluctuations; lack of marketing
and transportation; loss of markets; environmental risks; competition; ability
to access sufficient capital from internal and external sources; changes in
legislation, including but not limited to tax laws, royalties and environmental
regulations, and actual production may be greater or less than estimated.


The forward-looking statements contained in this press release are made as of
the date hereof and Sahara undertakes no obligation to update publicly or revise
any forward-looking statements or information, whether as a result of new
information, future events or otherwise, unless so required by applicable
securities laws.


In this press release bbls/d means barrels of oil per day.

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