Eastern Gas Corporation Limited (ASX:EGA) announced on 25 September 2026 that it has signed an indicative term sheet with RiverFort Global Capital Ltd for a proposed Research and Development (R&D) Loan Facility of up to A$10 million. The proposed facility is designed to provide the company with access to funding ahead of receiving eligible R&D tax incentive refunds and support its Working Capital requirements as it continues progressing its Natural Gas exploration and development activities.

The proposed arrangement includes an initial drawdown of up to A$1.5 million, subject to review of Eastern Gas’ R&D tax incentive position and relevant approvals. The facility remains subject to definitive documentation and mutual agreement on future drawdowns.

Proposed Funding Facility Creates Additional Working Capital Flexibility

The indicative term sheet provides for a proposed three-year availability period, during which Eastern Gas may access funding through agreed drawdowns.

Each drawdown would have a 12-month term, with repayment intended to occur from the proceeds of the relevant R&D tax incentive refund within five working days of receipt. However, each drawdown would remain repayable by its Maturity date regardless of the timing of any R&D refund.

The proposed facility is structured around Eastern Gas’ R&D rebate receivables, with the company granting a first-ranking security interest over those receivables.

The commercial terms include a fixed Interest Rate of 9%, a 5% implementation fee deducted from each drawdown, Due Diligence and legal fees, an introducer fee payable to Spark Plus, and unlisted options issued to the investor in connection with each drawdown.

The proposed funding structure is intended to provide Eastern Gas with an additional financing option while it continues advancing its exploration portfolio.

R&D Tax Incentive Forms Basis of Proposed Financing Structure

Eastern Gas stated that it intends to claim R&D tax incentive refunds for eligible activities and has received advice regarding its potential eligibility.

The company noted that any R&D tax incentive refund remains subject to meeting applicable eligibility requirements, registering relevant R&D activities and assessment by the appropriate authorities. The timing and amount of any refund remain uncertain, although such refunds are generally received within six weeks of tax return lodgement.

The proposed loan facility is therefore linked to future R&D rebate receivables rather than being a traditional project finance arrangement.

If finalised, the facility would provide Eastern Gas with access to funds before receiving potential R&D-related payments.

Project Venus Remains a Key Development Focus

The proposed financing arrangement comes as Eastern Gas continues progressing its natural gas exploration and development portfolio.

The company’s portfolio includes two prospective tenements in Queensland’s Surat Basin and Cooper Basin. Eastern Gas has been focused on advancing its gas resources towards potential commercialisation.

A key recent operational milestone was completion of drilling operations at the Venus-2H horizontal appraisal well at the company’s 100%-owned Project Venus in Queensland’s Surat Basin.

The Venus-2H well successfully intersected the Venus-1 vertical wellbore and encountered approximately 445 metres of interpreted net Macalister Lower coal within the production wellbore. The company planned dewatering and flow testing to assess water production, reservoir response, gas breakthrough and future flow performance.

The results from these appraisal activities are expected to contribute to understanding the development potential of the Venus project.

Funding Supports Broader Gas Exploration Objectives

Eastern Gas is focused on developing natural gas opportunities aimed at supplying east coast domestic markets.

The company’s portfolio includes Assets within Queensland’s Surat Basin Walloon CSG fairway and the Cooper Basin.

The proposed R&D loan facility provides a potential mechanism for supporting ongoing corporate and technical activities while the company continues evaluating its resource opportunities.

The facility could provide additional flexibility as Eastern Gas progresses exploration, appraisal and development workstreams.

Proposed Facility Remains Subject to Completion Conditions

While the indicative term sheet establishes a potential funding pathway, the arrangement is not yet finalised.

The company stated that the term sheet is non-binding except for specific provisions relating to due diligence, confidentiality, legal matters, Jurisdiction and related arrangements. Definitive documentation must still be negotiated and executed before the facility can proceed.

The initial drawdown also remains subject to review of Eastern Gas’ R&D tax incentive position and approvals.

Risks and Uncertainty Factors

The proposed R&D loan facility remains subject to several uncertainties, including completion of definitive documentation, approval processes and agreement on future drawdowns.

The availability and timing of R&D tax incentive refunds may affect the repayment pathway associated with the proposed facility. Eastern Gas has noted that eligibility, registration and assessment requirements must be satisfied before any refund can be received.

The company’s broader gas development activities also remain subject to exploration, appraisal, funding, regulatory approval and operational risks.

Future production outcomes from projects such as Venus depend on successful testing, reservoir performance and potential commercial development decisions.

What to Watch Ahead

Investors may continue monitoring Eastern Gas’ progress across its funding and development activities.

Key areas of focus include:

  • Completion of definitive documentation for the proposed R&D loan facility.
  • Approval and timing of any initial drawdown.
  • Progress of Project Venus dewatering and flow testing activities.
  • Further updates from Surat Basin and Cooper Basin assets.
  • Development of potential commercialisation pathways for gas resources.

Eastern Gas’ latest update highlights a potential funding pathway designed to support working capital requirements while the company continues advancing its natural gas portfolio. The proposed facility remains subject to further documentation, approvals and completion processes.