Elixir Energy Ltd (ASX:EXR) has received an advanced finding that the Daydream-2 appraisal well planned for later this year at the 100%-owned Grandis Gas Project in Queensland is eligible for R&D tax credits.
The finding was made by the Australian Government’s Department of Industry, Science and Resources, and it confirmed that activities associated with the Daydream-2 well will qualify as eligible R&D activities for the purpose of the R&D tax incentive.
Expenditure to be refundable
Subject to other eligibility requirements, eligible expenditure associated with these R&D activities may be claimed as a refundable R&D offset equal to 43.5% of the expenditure on eligible R&D activities.
The finding reflects the innovative technologies developed over the last decade to enhance stimulation techniques since BG Group (now Shell (LON:RDSa)) drilled in the Taroom Trough.
It’s sufficiently strong to support non-recourse project financing of a significant majority of the amount to be claimed – needless to say, the company is evaluating potential providers of such finance.
Technical presentation
Also in news for Elixir, the company is presenting a peer-reviewed technical paper at the industry-leading APPEA (Australian Petroleum Production and Exploration Association) Conference, entitled 'The Permian Gas Potential of the Taroom Trough, Queensland - New ideas to unlock a multi-TCF play'.
This will be delivered later today by Elixir’s chief geoscientist Greg Channon.
Elixir’s managing director Neil Young, said: “Our technical team and supporting professional advisers have done a fantastic job on procuring this R&D Finding.
“This reflects the innovative thinking that we believe can crack the code to release the enormous gas in place known to be in the Taroom Trough.
“The paper delivered today at the APPEA Conference is yet another demonstration of this technical excellence.
“Having the government fund nearly half of Daydream-2 is a superb outcome for Elixir shareholders – and demonstrates that the Australian Government strongly recognises the long-term criticality of new East Coast gas supplies.”