UPDATE ON ASSET SALE AND R&D CLAIM

• Company evaluating offer to sell HDNG Pilot Plant, but decided not to proceed
• R&D claim with ATO delayed due to request for further information
• Company working with ATO to expedite review and release R&D grant monies

State Gas Ltd (ASX: GAS) has provided an update on a proposed material asset sale involving its High Density Natural Gas (HDNG) Pilot Plant, as well as the status of its R&D incentive claims related to the plant. The company had been evaluating a formal, unsolicited offer to acquire the Pilot Plant and simultaneously enter into a long-term gas supply agreement. However, after careful evaluation, the Directors have decided not to proceed with the transaction at this time as the parties were unable to finalise definitive terms. Regarding the R&D grant claim, the company had anticipated that the Australian Taxation Office (ATO) would have completed its review by 31 March 2026. However, the ATO has advised that they are seeking further information to support the company's claim, which largely relates to costs associated with the development of the HDNG Pilot Plant. State Gas is continuing to work with the ATO to expedite the completion of its review and release the R&D grant monies to which the company and its R&D Tax Advisors believe it is entitled. The company is not aware of any reason why the suspension of its securities should not be lifted.