Key Highlights

  • Eastern Gas Corporation (ASX:EGA) shares were down 12.50% at $0.14 during the 22 October 2026 session, against a 0.44% fall in the S&P/ASX 200.
  • In an announcement dated 25 September 2026, the company signed a non-binding term sheet with RiverFort for an R&D Loan Facility of up to A$10 million.
  • The proposed facility carries 9% fixed interest, first-ranking security over R&D rebate receivables and an initial drawdown of up to A$1.5 million.

Eastern Gas Corporation Limited (ASX:EGA) shares were down 12.50% at $0.14 during the Trading session on 22 October 2026, at the time of the data. By comparison, the S&P/ASX 200 stood at 8,792.20, down 0.44%, and the All Ordinaries stood at 8,916.20, down 0.45%. Eastern Gas is an Australian Natural Gas exploration and development company with tenements in Queensland's Surat Basin and the Cooper Basin. Its latest update, dated 25 September 2026, reported a signed indicative term sheet for a proposed Research and Development loan facility of up to A$10 million.

About the Company

Eastern Gas Corporation Limited is listed on the ASX under the code EGA and describes itself as an Australian natural gas exploration and development company focused on supplying energy to east coast domestic markets. Its address is 119 Willoughby Road, Crows Nest, New South Wales, and its Managing Director is David Spring.

Business Overview

Eastern Gas holds an east coast natural gas portfolio that features two tenements in Queensland, one in the Surat Basin, targeting the Walloon coal seam gas fairway, and one in the Cooper Basin. The company describes both as highly prospective.

The company intends to claim research and development tax incentive refunds for its eligible activities and has received advice on its eligibility.

Proposed R&D Loan Facility

In its announcement dated 25 September 2026, the company said it signed an indicative term sheet with RiverFort Global Capital Ltd, which manages the investors proposing to provide the funding. The facility of up to A$10 million would give access to funds ahead of receiving 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 made by mutual agreement up to the A$10 million limit. Each drawdown would have a 12-month term, with repayment intended from the relevant refund within five working days of receipt and in any event by the Maturity date.

The term sheet is non-binding, apart from specified provisions covering due diligence, law and jurisdiction, confidentiality, no shopping and legal status. The facility remains subject to definitive documentation.

Interest, Fees and Options

Commercial terms include fixed interest of 9% and an implementation fee of 5% of each drawdown, deducted from proceeds. The company would also pay non-refundable Due Diligence and legal fees of A$10,000 and A$12,500, excluding VAT, and an introducer fee of 2% of each drawdown to Spark Plus. Security would be a first-ranking interest over the company's R&D rebate receivables.

For each drawdown, the company would issue unlisted Options to the investor. 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, so it cannot presently be determined. The options would be exercisable at a 40% premium to that price and expire on 30 September 2029, with the first Tranche targeted around 15 December 2026 if the facility proceeds. No options have been issued.

Related Sector Context

Gas exploration and development companies typically need external funding while projects progress toward commercialisation, and some use government research and development incentives to support working capital.

Small-cap energy companies can move independently of the broader market. During the 22 October 2026 session the S&P/ASX 200 was down 0.44% and the All Ordinaries was down 0.45%, compared with the 12.50% fall in Eastern Gas shares at the time of the data.

Risks to Weigh In

The company stated that the term sheet is non-binding and that the outcome of negotiations, the terms of definitive documentation and whether it is executed are uncertain. Drawdowns would depend on satisfying conditions and mutual agreement.

Any R&D tax incentive refund depends on the company meeting eligibility requirements, registering its activities and assessment by the relevant authorities, and the timing and amount are uncertain. Each drawdown would be repayable by its maturity date regardless of the refund timing. Issuing options would use Placement capacity under Listing Rule 7.1 or require Shareholder approval. Other disclosed risks include Commodity prices, drilling and production outcomes, resource estimation, regulatory changes and project timing.

Catalysts on Watch

The company said it will make a further disclosure when definitive documentation is entered into. The review of its R&D tax incentive position would precede any initial drawdown of up to A$1.5 million.

If the facility proceeds, the first tranche of options is targeted to be issued on or around 15 December 2026.

Putting It Together

Eastern Gas shares were down 12.50% at $0.14 during the 22 October 2026 session. The company's most recent update, dated 25 September 2026, covers a non-binding term sheet that predates the session and is not presented as an explanation for the move. Its outcome depends on definitive documentation.