Upland’s bilateral deal with Lost Soldier: what was actually announced
Upland Resources (LSE: UPL) has signed a Strategic Partnership and Framework Agreement with Lost Soldier Oil and Gas II Master Series LLC, a US operator advancing the Wild Mustang Federal Unit in Wyoming. The agreement covers a two-way investment, intended farm-in arrangements on Upland’s Southeast Asian assets, and broader technical and operational cooperation.
The company describes this as a significant milestone that strengthens both financial and technical firepower as Upland progresses its projects in Southeast Asia.
Deal structure: £3.3 million into Upland and ~$USD 4.3 million into Lost Soldier
The partnership is anchored by a ~ $USD 8.6 million bilateral investment split two ways:
- Lost Soldier subscribing into Upland: £3.3 million of new ordinary shares at 3.3 pence per share (100,000,000 new shares). These shares are subject to a 12‑month lock-up.
- Upland subscribing into Lost Soldier: approximately $USD 4.3 million in a private placement, providing direct participation in the Wild Mustang Federal Unit via a newly established US corporation.
The RNS states the bilateral investments and the related subscription and option issuance are binding.
| Key number | Detail |
|---|---|
| Total bilateral investment | ~ $USD 8.6 million |
| Lost Soldier’s Upland subscription | £3.3 million at 3.3 pence (100,000,000 shares), 12‑month lock-up |
| Upland’s Lost Soldier investment | ~ $USD 4.3 million private placement |
| Option grant (proposed) | 100,000,000 options at 5 pence to Marc A. Bruner; vest if 10‑day VWAP ≥ 5 pence for 10 trading days |
What Upland gets: royalties, cash flow access and a seat at the table
Through its investment into Lost Soldier, Upland secures economic interests and optionality around Wild Mustang:
- Quarterly cash flow from future production sales.
- Lifetime overriding royalty interests across 24,000 acres within the US Federal Unit, plus additional Lost Soldier acreage, irrespective of ownership changes. An overriding royalty is a slice of production revenue paid before operating costs – it’s not a working interest and is typically less volatile than equity barrels.
- Tax deductions at the level of the newly formed US corporation on future revenue.
- Convertible equity position if Lost Soldier later goes public via acquisition, IPO or merger.
- Future well participation rights on an asset with an expected project lifespan of over 30 years.
Upland also gains technical collaboration across subsurface, drilling and midstream, drawing on Lost Soldier’s operating capability and pipeline infrastructure.
What Lost Soldier gets: strategic capital and a route into Southeast Asia
Lost Soldier becomes a new cornerstone investor in Upland, with a 12‑month lock-up signalling intent. After reviewing Upland’s targeted Southeast Asian assets, Lost Soldier has indicated an intention to participate via farm-in agreements (subject to board approval, due diligence and regulatory sign-off). A farm-in typically means a partner funds work to earn an equity stake.
Key elements flagged:
- Option to farm-in for Lost Soldier of up to 20% project-level equity and up to 10% for Marc A. Bruner personally, subject to applicable approvals.
- Midstream support through Lost Soldier’s Wild Mustang Midstream subsidiary for hydrocarbon distribution and sales.
- Technical Oversight Committee to coordinate planning, optimisation and governance.
Wild Mustang Federal Unit: scale, timeline and why it matters
Lost Soldier’s flagship project is the Wild Mustang Federal Unit in Wyoming, described as an estimated 6 Tcf natural gas discovery and one of the largest unconventional finds in the western USA in 40 years, supported by Green Mountain #4 well logs and 200 miles of 2D seismic.
- Acreage footprint: 56 leases / 24,000 acres within the Federal Unit, plus approaching 15,000 acres outside the Unit, and a 250,000‑acre Area of Mutual Interest.
- Subsurface indicators: Two wells drilled to date – Found Soldier #1 and Green Mountain #4 – confirming 3,400 ft of stacked pay across five zones, with a further 4,000 ft of potential pay identified.
- Development plan: Additional wells scheduled to commence in 2026, installation of a 5.3‑mile pipeline, and expected first gas in Q4 2026.
- In‑house capability: Drilling subsidiary (with an active contract with Enbridge Inc.) and a pipeline subsidiary.
For Upland investors, that timetable anchors expectations for when “near-term” cash flows could realistically begin to ramp.
Equity, options and lock-up: what it means for UPL shareholders
Upland is issuing 100,000,000 new shares at 3.3 pence to Lost Soldier, locked up for 12 months. The percentage dilution is not disclosed because the current total share count is not stated in the RNS.
Separately, Upland intends to grant Marc A. Bruner 100,000,000 options at 5 pence. These only vest if the 10‑day volume weighted average price (VWAP) is at or above 5 pence for 10 trading days. VWAP is simply the average share price over a period, weighted by traded volumes – a common “performance” hurdle. If exercised, these options would add further shares in future; again, the precise dilution is not disclosed here.
Governance, process and compliance points worth noting
- The investments and the option issuance contemplated are described as binding.
- The Lost Soldier private placement is being conducted under SEC Rule 506(c) and is supported by accredited and high‑net‑worth investors.
- Upland will set up a dedicated US corporation to hold the relevant units and handle regulatory and tax requirements.
- Next steps include issuing subscription agreements, completing a Project Participation Agreement, updating the Technical Oversight Committee, and making PDMR filings with the FCA.
My take: why this could be a step-change for Upland
On the positive side, this is more than a cheque. Upland gets exposure to a large US gas project through royalties and a potential equity kicker, plus a credible operating partner that can help prosecute high‑pressure gas and unconventional targets across Southeast Asia. The 12‑month lock‑up on Lost Soldier’s new shares is shareholder‑friendly. The alignment message is reinforced by the performance‑linked option grant.
There are caveats. The RNS does not disclose the net cash effect for Upland, the expected magnitude of royalties, or the percentage dilution from the new shares and potential options. “Near‑term” cash flow depends on Wild Mustang’s execution timeline, with first gas expected in Q4 2026. Farm‑ins to Upland’s assets are expressed as intentions and remain subject to board, due diligence and regulatory approvals. Commodity prices, US and Southeast Asian regulatory processes, and project delivery risks all still apply.
Overall, though, the structure offers clearer pathways to revenue than a simple equity raise would: quarterly production revenue, lifetime overriding royalties across 24,000 acres, and rights to join future wells on an asset guided for a 30‑year life. If Lost Soldier executes its 2026 plan, Upland could gain a diversified income stream alongside its core Southeast Asian ambitions.
Key unknowns and what I’ll watch next
- Completion mechanics: Closing of both subscriptions and the Project Participation Agreement.
- Share count and dilution: Updated total issued shares post-placing, and any timetable for listing the new options.
- Royalty economics: Specific royalty rates, any associated deductions, and guidance on expected cash flow once Wild Mustang is onstream.
- Farm-in terms: Precise earn‑in structure, carry, work commitments and regulatory approvals for Upland’s Southeast Asian assets.
- US vehicle setup: Details of the new US corporation and tax treatment on distributions.
- Wild Mustang milestones: 2026 drilling start, 5.3‑mile pipeline installation, and confirmation of first gas in Q4 2026.
Bottom line
This agreement pairs funding with operational heft. If the execution matches the ambition, Upland could transition from pure explorer to a company with enduring royalty income and project participation rights in a 6 Tcf US gas play, while bringing an experienced partner into Southeast Asia. The building blocks are here; the next few RNS updates should fill in the economics and the timeline.
