Key Highlights

  • Eastern Gas (ASX:EGA) shares were up 11.11% at $0.15 at 12:04 pm on 23 October 2026, while the S&P/ASX 200 was down 0.35%.
  • An indicative term sheet dated 25 September 2026 covers a proposed R&D loan facility of up to A$10 million with RiverFort Global Capital.
  • The proposed facility carries fixed interest of 9%, a 5% implementation fee and unlisted options, and remains non-binding.

Shares in Eastern Gas Corporation Limited (ASX:EGA) were up 11.11% at $0.15 during the trading session on 23 October 2026, as at 12:04 pm, while the S&P/ASX 200 stood at 8,762.60, down 0.35% (30.60 points). Eastern Gas is an Australian natural gas exploration and development company with tenements in Queensland's Surat Basin and Cooper Basin. Its latest update is an announcement dated 25 September 2026 on an indicative term sheet for a proposed research and development (R&D) loan facility.

Term Sheet for a Proposed A$10 Million R&D Loan Facility

In its announcement dated 25 September 2026, Eastern Gas said it had signed an indicative term sheet with RiverFort Global Capital Ltd, which manages the investor or investors proposing to provide the funding. The facility would be for up to A$10 million and is intended to give access to funding ahead of R&D tax incentive refunds, supporting working capital.

The term sheet contemplates a three-year availability period, with an initial drawdown of up to A$1.5 million at commencement, subject to a review of the company's R&D tax incentive position. Further drawdowns would be subject to mutual agreement up to the A$10 million limit. The term sheet is non-binding apart from specified provisions covering due diligence, law and jurisdiction, confidentiality, no shopping and legal status.

Repayment, Interest and Fees

According to the 25 September 2026 announcement, each drawdown would have a 12-month term. Repayment is intended to come from the relevant R&D tax incentive refund within five working days of its receipt, but each drawdown would be repayable in full at maturity regardless of the refund timing.

The proposed terms include fixed interest of 9% and a 5% implementation fee deducted from each drawdown. Non-refundable due diligence and legal fees of A$10,000 and A$12,500 would be payable after signing, along with a 2% introducer fee on each drawdown. Security would be a first-ranking interest over the company's R&D rebate receivables.

Option Issue and Right of First Refusal

The announcement dated 25 September 2026 states that unlisted options would be issued to the investor with each drawdown. The number would equal 30% of the drawdown amount divided by a reference price based on the average of five daily volume-weighted average prices before the drawdown. Options would be exercisable at a 40% premium to that price and expire on 30 September 2029, with the first tranche targeted for issue on or around 15 December 2026 if the facility proceeds.

The investor would also hold a right of first refusal for six months on certain structured finance, bridge lending, R&D and equity-linked debt or prepayment transactions.

About the Company and Business Overview

Eastern Gas Corporation Limited (ASX:EGA) is an Australian natural gas exploration and development company, with its office at 119 Willoughby Road, Crows Nest, New South Wales. It is focused on supplying energy to east coast domestic markets.

Its portfolio comprises two tenements: one in the Walloon coal seam gas fairway of the Surat Basin and one in the Cooper Basin, both in Queensland. The company states that it is working to progress its gas resources toward commercialisation to support Australia's energy security.

Related Sector Context

Eastern Gas operates in the energy sector, specifically natural gas exploration and development. Companies at this stage generally fund activities through capital raisings, debt facilities or government incentives such as the R&D tax incentive, rather than operating revenue. The company's own description refers to a natural gas shortage and energy security concerns in its markets.

At 12:04 pm on 23 October 2026, the S&P/ASX 200 stood at 8,762.60, down 0.35%, while Eastern Gas shares were up 11.11% at $0.15.

Risks to Weigh In

The company states that the term sheet is non-binding and that the facility depends on definitive documentation and agreement on drawdowns. Its forward-looking statements list the outcome of negotiations with RiverFort, the terms of any documentation, satisfaction of drawdown conditions and the company's ability to repay any drawdown by maturity as risks.

Entitlement to an R&D tax incentive refund depends on eligibility, registration of activities and assessment by the authorities. Each drawdown would be repayable by its maturity date irrespective of refund timing. The options would be issued within placement capacity under Listing Rule 7.1, and otherwise would require shareholder approval.

Catalysts on Watch

The company said it will make a further disclosure when definitive documentation is entered into. Other stated milestones include the review of its R&D tax incentive position ahead of any initial drawdown and the targeted first option issue on or around 15 December 2026, if the facility proceeds.

Where Things Stand

Eastern Gas shares were up 11.11% at $0.15 at 12:04 pm on 23 October 2026. The most recent update, dated 25 September 2026, describes a non-binding term sheet for a facility of up to A$10 million that remains subject to definitive documentation.