Pilot Energy - WA-481-P Joint Venture Assigned $65 Million PRRT Credit
Pilot Energy (ASX:PGY) has confirmed that the WA-481-P Joint Venture has been transferred A$65 million in Petroleum Resource Rent Tax (PRRT) credits, representing the undeducted exploration expenditure costs during the initial term. The transfer reduces Pilot's potential PRRT liability by more than $75 million for future discoveries.
- Transfer of $65 million PRRT credits to WA-481-P joint venture
- Reduces PRRT liability on future developments by > $75 million \
- Preliminary seismic interpretation confirms numerous inboard leads, on trend with Cliff Head oil field
Pilot Energy Ltd (the Company, ASX:PGY) is pleased to announce that it has received a transfer of Petroleum Resource Rent Tax (PRRT) credits, as the final step in completion of the acquisition of exploration permit WA-481-P.
The undeducted exploration expenditure of $65,518,292 represents the previous titleholder’s net exploration cost during the primary term, including three exploration wells in the outboard area. Pilot Energy will now assign 40% of this sum to joint venture partner, Key Petroleum Limited (ASX: KEY).
The effect of the PRRT credit is to greatly increase the value of any commercial discovery, due to the fact that the undeducted expenditure is uplifted on an annual basis and available as a deduction against assessable petroleum sales income for PRRT.
With PRRT levied at a rate of 40%, the PRRT liability associated with development of future discoveries in WA-481-P will be reduced by more than $75 million, significantly enhancing the value of the permit and its prospects.
Pilot Energy is currently finalising its preliminary interpretation of the available 2D and 3D seismic data, and has mapped numerous leads along an inboard oil & gas play, on trend with the Cliff Head oil field (see figure).
The Company will provide a prospectivity summary, and its internal estimate of prospective resources, by year-end.