Upland Resources : Interim results for the six-month period from 1 July to 31 December 2020 – Upland Resources Limited

Jersey Company number: 129667

UPLAND RESOURCES LIMITED

Interim Report and Accounts

for the Six-Month Period from 1 July 2020 to 31 December 2020

UPLAND RESOURCES LIMITED
CONTENTS
Report of the Directors	1-5
Consolidated Statement of Comprehensive Income	6
Consolidated Statement of Financial Position	7
Consolidated Statement of Changes in Equity	8
Consolidated Statement of Cash Flows	9
Notes to the Interim Accounts	10-11

UPLAND RESOURCES LIMITED

REPORT OF THE DIRECTORS

FOR THE SIX-MONTH PERIOD ENDED 31 DECEMBER 2020

Upland Resources ("Upland" or the "Company" or the "Group") has made steady progress on licence activities in the second half of 2020.

On 14 July 2020, the Company announced a successful fund raise of £470,000 via a placing and subscription of ordinary shares. Associated warrants were also issued on a one for two ordinary share basis. These funds are being deployed to progress the technical studies in Tunisia and to develop the new licence opportunities to a negotiation stage.

In August 2020, the Company announced the execution of a Memorandum of Understanding with Viddacom (B) Sdn Bhd, a local Brunei oil services and logistics company. This agreement is consistent with a strategy to identify and evaluate new attractive opportunities offering significant potential for growth. Local partners are seen to be instrumental in the evaluation and closure of new licences and the Company continues to engage with other prospective companies in target regions.

Recent political developments have given cause for optimism in our pursuit of an exploration permit in Sarawak and together with positive findings from our initial geological studies have given encouragement to our selection of a possible licence. We now hope to be able to follow up with the relevant authorities.

On 10 September 2020, the Company announced that Mr Christopher Pitman relinquished his role as Chief Executive Officer to focus on sourcing and developing new business opportunities. Mr Pitman continues to serve as a director of the Company, with Mr Bolhassan Di assuming the role of interim Chief Executive Officer from that date.

The Company commissioned highly experienced external consultant GA.I.A. srl (GAIA Consulting) to undertake a detailed geological and geophysical study of the Saouaf Permit, Tunisia, in order to prepare a lead and prospect inventory and to assess the potential for de-risking through the application of seismic re-processing techniques using the existing data acquired by previous companies.

Following the appointment of GAIA Consulting, and as part of the approved Tunisian work programme within the Saouaf licence area, the Company's technical team have integrated geology, geophysics and geochemistry to complete a sound geological model of the subsurface of the Saouaf licence area. All the available vintage well and seismic data were ingested and loaded in state-of-the-art geoseismic interpretation software and a dedicated Geographic Information System (GIS).

Regional analyses of existing and new plays have been completed, identifying a promising sub-salt play, new for the Saouaf area but well proven in Algeria and Morocco. Comparisons were made with the giant gas field of Hassi R'Mel in Algeria (85 TCF of natural gas recoverable) and the recent gas discovery at Tendrara in North-Eastern Morocco (0.9 TCF recoverable + 8 TCF potential).

The sub-salt play is based on the presence within the Saouaf license area of an extensive Triassic salt formation acting as top seal and the presence of a light oil surface seep that indicates a mature, deep source rock active in the area, most likely the wide-spread and prolific Silurian "Hot Shale" formation.

The next phase will include reprocessing of existing ETAP seismic data in order to plan for the subsequent new data acquisition campaign. The technical work plan includes final selection of some 80-100 km of existing seismic lines for test reprocessing, which will now also specifically aim at improving the imaging of the deep "base of salt" reflector and at testing for the presence of any indirect indication of gas saturated porosity below the Triassic salt formation.

In the UK, the P2478 licence group comprised of Corallian Energy Limited (Operator), Upland Resources Limited and Baron Oil plc agreed an extension to the previously announced Work Sharing and Confidentiality Agreement with a large International E&P Company for the Inner Moray Firth licence from 30 September 2020 to 31 January 2021. This extension allowed additional time for the Interested Party to complete its regional studies and the P2478 Joint Venture Partners agreed to continue to cease marketing a joint farm-out until 31 January 2021.

Significant events since the end of the reporting period

On 20 January 2021, the Company announced that it had been informed by the Direction Générale des Hydrocarbures of the Ministry of Industry, Energy and Mines that the Saouaf Prospecting Permit duration will be extended for one year, expiring on 23 December 2022, following a request submitted by the Company in August 2020. It is expected that further formal notification of this approval will be conveyed within the Official Gazette of the Republic of Tunisia.

A 2021 work programme submitted to ETAP for approval includes the reprocessing of specific vintage seismic lines, the acquisition of a new 300 km 2D seismic survey and multidisciplinary geological and geochemical studies, aiming at de-risking the identified leads and prospects and increasing the Chance of Success.

On 15 February 2021, the Company announced that as a result of work done on the vintage exploration data, several leads had been identified, spread over a number of different exploration plays, namely the Eocene, Cretaceous, Jurassic and Pre-Salt plays. Studies are now ongoing to map and define a series of new prospects and leads.

The best-defined structure is a prospect named Pyrite, which is part of a large isolated carbonate platform developed at Lower Cretaceous-Jurassic level. This prospect is defined by thirteen seismic lines of good quality, most of which have been acquired in 2006 or in 2012 and subsequently reprocessed in 2013 by a previous operator. Pyrite is a large independent closure being part of a wide ring of carbonate build-ups of Early Cretaceous age (Ressas formation), which has been growing on top of a carbonate platform of Jurassic age (Nara formation). The top seal is represented by the shale-dominated Sidi Khalif and M'Cherga formations, which cap the carbonate build-up.

The Pyrite prospect is interpreted to contain between 0.7 and 1.6 TCF of recoverable gas (respectively Low=P90 and High=P10 of Prospective Resources), with a most likely value of 1.1 TCF (Best=P50), equivalent to approx. 183 MBoe.

Two other structures were also identified close to Pyrite, belonging to the same Jurassic-Lower Cretaceous carbonate play, named respectively Galena and Marcasite.

The interpretation work will continue, also on the base of additional vintage seismic data received from ETAP after the TCM/OCM held on 12 January 2021.

The assessment of the potential of all the leads identified within the licence area will continue including the promising structural closures at Sub-Salt level, where four structural highs have been identified so far. Their areal extensions of these features range from 61 km2 to 196 km2, with the largest one (Halite lead) being the best defined on the basis of the seismic interpretation and a prominent Bouguer gravity anomaly.

In February 2021, the P2478 Joint Venture Partners (Corallian Energy, Baron Oil and Upland Resources) announced that the Interested Party had completed its regional and technical studies and communicated its decision not to enter into any subsequent farm-in discussions with the licence group. The Joint Venture Partners are now considering their options with regard to undertaking re-processing of the existing 3D seismic data prior