Empire Receives $15.6 million R&D Tax Offset
Sydney, Oct 24, 2023 AEST (ABN Newswire) - Empire Energy Group Ltd (ASX:EEG) (EEGUF:OTCMKTS) announces $15.6 million R&D Tax Offset received in cash.
- Current cash balance is now $29.3 million
- Empire anticipates that it is fully funded to progress to EP187 Carpentaria Pilot Project ("Pilot Project") Final Investment Decision ("FID")
Comments from Managing Director Alex Underwood:
"The Empire team is pleased to have received this R&D tax offset as it positions us to focus on completing the Pilot Project FID process.
We are making material progress on the Pilot Project, advancing:
(i) Field Development Planning, including identifying locations for and the design of development wells and surface facilities;
(ii) Pipeline access negotiations;
(iii) A formal gas sales marketing process;
(iv) Regulatory and indigenous approvals; and
(v) Planning for project financing.
Empire's focus is on funding the Pilot Project in a manner that minimizes dilution of shareholder's interests in the Company. To that end, Empire is discussing potential debt options with lenders and has commenced discussions with parties interested in acquiring a direct working interest in the project in exchange for funding development activities.
We look forward to updating shareholders as these value accretive initiatives progress."
Research and Development Tax Offset
The R&D Tax Incentive scheme is designed to encourage companies to undertake R&D activities and pioneer innovation in Australia. The scheme entitles companies with an aggregate global turnover of less than $20 million to access a refundable tax offset of 43.5% of eligible expenditure on eligible R&D activities.
Empire's eligible activities for the year ended 31 December 2022 encompassed research and development related to:
(i) the fracture stimulation and flow testing of Carpentaria-2H; and
(ii) the drilling and fracture stimulation of Carpentaria-3H.
Empire has received an R&D Tax Offset for FY22 of $15.6 million in cash following finalisation of its 2022 Australian tax return.
Proceeds from the R&D Tax Offset will be applied to:
(i) repayment of all or part of the Facility A (Revolving Credit Facility) with Macquarie Bank;
(ii) advancement of the Pilot Project FID process;
(iii) purchase of long lead items in relation to the Pilot Project; and
(iv) additional working capital.
Deloitte Tax Services advised Empire in relation to the preparation of the Research & Development Tax Incentive application.
About Empire Energy Group Ltd
Empire Energy (ASX:EEG) (OTCMKTS:EEGUF) is a Sydney based Australian oil and gas company holding 100%-owned and operated assets with unconventional targets in the Northern Territory Beetaloo Sub-basin and central trough of the McArthur Basin.
Empire is an active Beetaloo Sub-basin operator, focused on maturing its assets to production. Following the successful appraisal drilling and flow testing of the Carpentaria-2H and 3H wells in Empire's EP187, Empire is targeting first gas flow in H1 2025 at its Carpentaria Pilot Project. The Pilot has a targeted sales gas rate of up to 25 TJ per day utilising the existing McArthur River Pipeline.