Strike Energy Declared The Results Of FY16 R&D Internal Review By Innovation And Science Australia

  • Mar 27, 2019 AEDT
  • Team Kalkine
Strike Energy Declared The Results Of FY16 R&D Internal Review By Innovation And Science Australia

On 27 March 2019, Strike Energy Limited (ASX: STX), an oil and gas exploration company from the energy sector, announced the outcome of internal review done by Innovation and Science Australia (ISA), of the FY2016 Research and Development (R&D) registration finding under section 30D of the Industry Research and Development Act (IRDA) 1986.

Based on the findings, ISA has confirmed its original decision to deny the FY16 R&D registration, as per which the company received an amount worth $6,333,638, in the form of R&D tax incentive during that period.

STX has a time frame of up to 22 April this year to appeal the decision taken. The company will now be liaising with the Australian Taxation Office, for a piece of advice related to the potential tax implications, resulting from this adverse finding.

However, as per the Chairman of Strike Energy Limited, Mr John Poynton AO, STX is confident about its FY16 R&D claim to be eligible. The company is investigating and considering all paths available to it to defend, the R&D nature of its claim.

Further, the company has received validation from the third party regarding its cutting-edge research, from the deep coal research team, that belongs to one of the leading universities of Australia. Also, the company is engaged in developing the world’s first technology, that has potential to extract what has, to date, been stranded deep coal seam gas, which provides a real solution to Australia’s east coast gas shortage.

On 8 March 2019, S&P Dow Jones announced the changes in the S&P/ASX indices, that was effective from 18 March 2019. At the quarterly rebalance, STX was added in the S&P/ASX 300 index.

In its half-yearly results of FY2019 for the period ended 31 December 2018, the company reported a fall in the revenue from $0.771 million in 1HFY2018 to $0.581 million in 1HFY2019. The loss incurred during the period was of $0.826 million. The balance sheet of the company shows that there was an increase in the net asset base, as a result of an increase in the total asset of the company. The increase in the total asset was driven by increased cash and cash equivalent during the period, followed by the increase in the total non-current assets. The period reported an increase in the accumulated losses, as a result of the operating loss during the period. The total shareholders’ equity was worth $88.927 million.

During the period, the company used net cash of $0.763 million in its operating activities. Around $6.473 million was used in the investing activities of the company, where the cash outflow was majorly driven by the payment made for the exploration, evaluation expenditure and oil and gas production assets, followed by the acquisition costs. During the period, Strike Energy, generated revenue from the issue of equity instruments. By the end of the 1HFY2019, the company had net cash and cash equivalent worth $11.518 million.

In the previous six months, the stock has generated a negative return of 50%. By the end of the trading period, on 27 March 2019, the price of the stock was A$0.065, down by 7.143% as compared to its previous trading day’s closing price. The company has a market capitalization of A$95.49 million and approximately 1.36 billion outstanding shares.


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