Client Overview
Our client is an AIM listed transition energy focused business. Their Micro LNG project aims to bring much needed gas supply reducing reliance on LPG, and playing an important role in the transition to lower carbon energy sources. The company is focused on a number of oil & gas exploration opportunities, whilst being committed to the highest environmental and safety standards. With a heavy focus on ESG, the company undertakes significant scientific and technical activity related to exploration.
Problem Statement
The company employs a number of scientific and technical experts within their engineering teams. Their staff comprise specialists such as geologists, reservoir engineers and petrophysicists. With this pool of staff, they have been engaged in exploring a range of advanced technologies and published papers at external conferences outlining new approaches to oil & gas exploration.
Having historically not made any R&D Tax Credit claims, the company was unaware of the potential opportunities to secure government funding through the incentive scheme. Furthermore, due to complexities with join venture accounting, it was not clear at the outset if or how they could approach R&D claims.
ResearchQX presented an outline of the potential opportunity available along with several examples of qualifying technical work undertaken in the oil & gas sector. Following this, we were engaged to provide assistance in preparing R&D claims for the company for the first time.
Our Process
ResearchQX initiated the process of preparing R&D claims by engaging with the technical and finance teams of the company, liaising with the principal geologist, exploration manager and geoscientist. A detailed discussion of the BEIS guidelines on the meaning of R&D for tax purposes was conducted to ensure that the technologists developed a good understanding of the R&D eligibility criteria.
Following this, several technical meetings were held to understand the nature of work performed in areas such as seismic processing, modelling, simulation, and reservoir engineering. The detailed technical review unearthed a number of projects where the client team was advancing the technological knowhow of oil exploration. Several papers published at leading journals and external conferences were also reviewed.
Detailed technical descriptions were prepared by the ResearchQX team and complex topics relating to joint venture accounting were covered to ensure that only relevant costs were included in the R&D claim.
Following a thorough methodology, the report was submitted to HMRC and the claim was approved within a few weeks.
Key Metrics
Our client has derived a significant cash benefit from the R&D claim. At the same time, the company is also benefiting from an efficient process set up by the ResearchQX team which will make it easier to prepare claims year on year.
We were also retained by the client to advise on potential replacement of their ERP platform. This project shows the breadth of 360 degrees service offered by Invenics (now ResearchQX) at the time in connecting various phases in the innovation lifecycle.
