Elixir Energy Secures $10M Loan Backed by 48.5% R&D Tax Refund
Elixir Energy has locked in a $10 million debt facility secured against its FY26 R&D tax refund to fund the Lorelle-3 appraisal well activities in Queensland’s Taroom Trough. This financial move aims to bolster working capital during a busy operational period.
- Up to $10 million debt facility secured with Endpoints Capital
- Facility backed by AusIndustry Advance Finding covering 48.5% of R&D costs
- Access to 80% of estimated FY26 R&D tax refund in advance
- Loan carries 15.75% interest, repayable by February 2027 or upon refund receipt
- Funding supports drilling, analysis, and testing of Lorelle-3 well
Strategic Funding Secured for Lorelle-3 Appraisal
Elixir Energy Limited (ASX: EXR) has taken a decisive step to underpin its upcoming operational activities by securing a $10 million debt facility from Endpoints Capital. This facility is uniquely structured, being secured against the company’s anticipated Research and Development (R&D) tax refund for the 2026 financial year, specifically tied to the high-impact Lorelle-3 appraisal well project in Queensland’s Taroom Trough.
The Lorelle-3 well’s R&D program recently received an Advance Finding from AusIndustry, the Australian government’s body overseeing the R&D Tax Incentive. This approval entitles Elixir to a refund of up to 48.5% on eligible costs related to drilling, coring, logging, analysis, completion, and testing activities over a three-year period spanning FY26 to FY28.
Balancing Capital Needs Amid Operational Intensity
With significant expenditure on the Lorelle-3 well expected before 30 June 2026, the facility allows Elixir to access up to 80% of its estimated R&D tax refund in advance. This advance funding is critical for managing working capital during a period marked by multiple operational milestones, including the drilling and testing of Lorelle-3, the completion and testing of the Diona-1 well, and the Teelba 2D seismic campaign.
While the loan carries a relatively high interest rate of 15.75% plus a 1% drawdown fee, these costs are capitalised until repayment. The loan is secured solely against the R&D refund, with no equity dilution or warrants attached, and must be repaid by 28 February 2027 or upon receipt of the refund, whichever comes first.
Positioning Within a Resource-Rich Region
Elixir Energy holds the largest acreage in the Taroom Trough, a geologically promising area analogous to Canada’s Montney Formation. The region benefits from proximity to major gas infrastructure, including the Wallumbilla Gas Hub and LNG export facilities, positioning Elixir well within Queensland’s mature onshore gas industry.
Managing Director Stuart Nicholls emphasised that the AusIndustry Advance Finding and the debt facility provide the company with the financial flexibility needed to navigate a demanding operational phase without compromising its balance sheet strength.
As Elixir progresses its appraisal of approximately 2.8 trillion cubic feet of contingent gas resources, this funding arrangement underscores the company’s commitment to advancing its projects while managing financial risk prudently.
Bottom Line?
Elixir’s innovative funding approach offers a financial bridge through a critical operational phase, but the cost of capital and timing of refunds will be key to watch.
Questions in the middle?
- How will the high interest rate on the debt facility impact Elixir’s overall project economics?
- What are the timelines and expected outcomes for the Lorelle-3 appraisal well drilling and testing?
- Could Elixir pursue similar funding strategies for other projects in its portfolio?
