- $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 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:
- Field Development Planning, including identifying locations for and the design of development wells and surface facilities;
- Pipeline access negotiations;
- A formal gas sales marketing process;
- Regulatory and indigenous approvals; and
- 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:
- the fracture stimulation and flow testing of Carpentaria-2H; and
- 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:
- repayment of all or part of the Facility A (Revolving Credit Facility) with Macquarie Bank;
- advancement of the Pilot Project FID process;
- purchase of long lead items in relation to the Pilot Project; and
- additional working capital.
Deloitte Tax Services advised Empire in relation to the preparation of the Research & Development Tax Incentive application.
Source: Empire Energy
