CONVERTIBLE LOAN NOTES FACILITY

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NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA OR JAPAN
This announcement is not an offer for sale, or a solicitation of an offer to acquire, securities in any jurisdiction, including in or into the United States, Canada, Australia, or Japan. Neither this announcement nor any part of it shall form the basis of or be relied on in connection with or act as an inducement to enter into any contract or commitment whatsoever.

Upland Resources Limited (LSE: UPL), the oil and gas company actively building a portfolio of attractive upstream assets, is pleased to announce that it has received (and accepted) commitments, directly and without an intermediary, from private and institutional investors (the “Facility Providers”) to subscribe for £3.5 million principal of unsecured, interest-free convertible loan notes (the “Loan Notes”).

The Loan Notes provide Upland with the ability to draw down appropriate sums at short notice, at times of the Company’s choosing and with a near-zero execution cost, hence reducing dilution for existing shareholders. This will be a useful facility over the coming weeks and months as the Company expects to become increasingly active, principally through its participation in the drilling of the Wick well in Q3 this year; which although fully funded from existing cash resources allows flexibility towards over runs.

Terms of the Convertible Loan Notes Facility

  • The Facility Providers comprise Tune Assets Limited, Norza Zakaria (Chairman of the Company) and clients of Optiva Securities (corporate brokers to Upland).
  • The £3.5 million principal of Loan Notes have been constituted and created pursuant to a loan note instrument dated 7 March 2018 executed by the Company.
  • The commitments by the Facility Providers to subscribe for the Loan Notes (the “Convertible Loan Notes Facility”) may be called upon by Upland at time(s) and amounts of its choosing, within the size and timeframe of the Convertible Loan Notes Facility.
  • Upland may also terminate any commitments under the Convertible Loan Notes Facility and make repayments of any amounts drawn down by the Company by way of subscription for Loan Notes, at any time(s) of its choosing, without penalty.
  • No fees are payable to any agents or third parties in relation to the Convertible Loan Notes Facility – and no interest is payable by the Company on any of the Loan Notes on draw down of funds by the Company from the Facility Providers. Instead, a 3% commitment fee is to be paid by Upland to the Facility Providers as a result of acceptance by the Company of thecommitted funds and will be payable again on each anniversary of that acceptance date (to the extent that the commitments or, following draw down, the Loan Notes remain outstanding at such anniversary date).
  • The initial commitment fee, any commitment fee payable on an anniversary and any of the Loan Notes (issued following any draw down by the Company of the Facility Providers’ commitments) may – at the Company’s sole option – be satisfied by the issue of new shares of no par value in Upland (“Upland shares”), cash or any combination of the two. For this purpose, Upland shares will be valued at a 10% discount to the volume weighted average price of the shares over the five days’ trading immediately prior to the relevant date. The Company has elected to satisfy the aggregate initial commitment fee of £105,000 as to £40,000 in Upland shares and as to £65,000 in cash.
  • Upland shares issued in repayment of the Loan Notes are subject to a six-month lock in period, during which time they may not be sold or traded.
  • The final repayment date for any Loan Notes issued to the Facility Providers (following any draw down by the Company of their commitments) is 30th June 2020.

Steve Staley, Upland Resources Limited CEO, said:

“The Convertible Loan Notes Facility provides Upland with added funding flexibility at low cost and minimal dilution to existing shareholders. This flexibility allows Upland to pick the right time to draw funds and in amounts that can be matched to needs. The Board believes that this Facility compares very favourably with other arrangements currently available in the market that seek to provide the same flexibility. It also serves to underline the commitment of our cornerstone shareholders to the Company.”

This announcement contains inside information for the purposes of Article 7 of the Regulation (EU) No 596/2014 on market abuse

Upland Resources Limitedwww.upland.energy
Steve Staley, CEOTel: 07704 974784
[email protected]
Optiva Securities Limited
Jeremy King (Corporate Finance)Tel: 020 3137 1904
[email protected]
Christian Dennis (Corporate Broker)Tel: 020 3137 1903
[email protected]
FTI Consulting
Ben Brewerton/Molly StewartTel: +44 (0) 20 3727 1708
[email protected]
Flowcomms Ltd
Sasha SethiTel: +44 (0)7891 677441
[email protected]