8-K: Tamboran Acquires Falcon, Forges Beetaloo Basin Leader

Tamboran Resources Corporation will acquire Falcon Oil & Gas Ltd.'s subsidiaries for US$23.7 million cash and 6.54 million Tamboran shares, consolidating its position in the Beetaloo Basin.

Summary

• Tamboran Resources Corporation (Tamboran) will acquire all equity interests of Falcon Oil & Gas Ltd.'s (Falcon) subsidiaries.
• The consideration for the acquisition includes 6,537,503 shares of Tamboran common stock and US$23,663,080 in cash.
• Falcon shareholders are expected to own approximately 26.8% of the pro forma combined business, with Tamboran stockholders owning the remaining 73.2%.
• The transaction values Falcon's subsidiaries at C$239 million (US$172 million).
• The implied offer price for Falcon shares is C$0.2154 per share, representing a 19.7% premium to Falcon's closing price on the TSX on September 29, 2025, and a 53.2% premium to its 90-day volume-weighted average price.
• Existing Falcon options will be cancelled, and certain Falcon directors and officers will receive up to 369,084 Tamboran options with an exercise price of US$21.94 per share.
• The transaction is structured as a Plan of Arrangement under the Business Corporations Act (British Columbia) and is expected to close in the first quarter of 2026.

Sentiment

Score: 8

Explanation: The filing presents a highly strategic and financially accretive acquisition for Tamboran, consolidating its position as a leader in the Beetaloo Basin. The premiums offered to Falcon shareholders are substantial, and the implied acreage value for the acquired assets is favorable to Tamboran. While there are standard M&A risks and potential for delays, the overall tone and stated benefits are strongly positive for the combined entity's future prospects.

Positives

• Creates a leading Beetaloo Basin player with approximately 2.9 million net prospective acres, a 52% increase for Tamboran.
• Strengthens Tamboran's working interest in the Phase 2 Development Area to 80.62% (pre-farmout), enhancing its position for future farmout processes.
• Consolidates Tamboran's ownership across over 90% of the Beetaloo depocenter.
• The acquisition is accretive to Tamboran stockholders, with Falcon's implied acreage value of US$169 per acre reflecting a 4% discount to Tamboran's current implied acreage value of US$176 per acre.
• The pro forma combined entity will have a market capitalization exceeding US$500 million.
• Removes uncertainty regarding Falcon's participation in the Phase 2 Development Area farmout.
• The combined entity is expected to benefit from a reduced royalty burden.

Negatives

• Existing Tamboran stockholders will experience dilution, with Falcon shareholders owning approximately 26.8% of the pro forma business.
• Potential termination fees of US$3.75 million for Tamboran and US$1.62 million for Falcon under specified circumstances.
• Tamboran may terminate the agreement if Falcon's undisclosed liabilities exceed US$3 million.

Risks

• Tamboran stockholders may not approve the issuance of new shares.
• Falcon shareholders may not approve the transaction.
• Conditions to closing may not be satisfied, potentially delaying or preventing the transaction.
• Legal proceedings may be instituted against Tamboran or Falcon, questioning the transaction's validity or seeking damages/injunctions.
• Reputational risks and potential adverse reactions from employees or business partners could arise from the announcement or completion of the transaction.
• Diversion of management time on transaction-related issues could impact ongoing operations.
• Dilution of existing Tamboran common stock due to the issuance of new shares.
• Uncertainty regarding the ultimate timing, outcome, and results of integrating Tamboran and Falcon's operations.
• Changes in capital markets and the combined company's ability to finance operations as expected.
• Regulatory approvals for the transaction may not be obtained or may be delayed.
• Effects of commodity prices and general risks associated with oil and gas activities.
• Operating costs and business disruption may be greater than expected following the announcement or consummation of the transaction.
• Dissent rights exercised by more than 5% of Falcon common shares could prevent the closing of the transaction.
• Failure to obtain Falcon Australia's minority shareholder approval by December 30, 2025, would automatically terminate the agreement.

Future Outlook

The transaction is expected to strengthen Tamboran's ownership in the Phase 2 Development Area, facilitating a larger farmout position to a new partner and creating further alignment with Daly Waters Energy, LP. The combined company anticipates enhanced future financial performance, improved financial position, and significant growth opportunities from its expanded and consolidated Beetaloo Basin acreage.

Management Comments

• Richard Stoneburner (Tamboran Chairman and Interim CEO): "The transaction between Tamboran and Falcon is a logical consolidation of two of the Beetaloo Basins most active companies. The transaction will also strengthen Tamboran’s acreage position across the majority of the Beetaloo depocenter... Strategically, we believe this transaction will strengthen our ownership over the Phase 2 Development Area, where we are currently undertaking a farmout process with RBC Capital Markets. This will allow us to sell down a larger position to a new partner while maintaining a material working interest over acreage."
• Philip O'Quigley (Falcon Oil & Gas Ltd. CEO): "This transaction brings Falcon’s shareholders interests in the Beetaloo directly to the centre of operations and provides our shareholders with greater exposure to all activities carried out by Tamboran. Upon closing of the transaction, Falcon shareholders will benefit from the increased exposure to the critically important pilot development currently underway in the Beetaloo. In addition, this transaction will remove any uncertainty around Falcon’s participation in the farmout of the Phase 2 Development Area, as previously announced by Tamboran."

Industry Context

This acquisition represents a significant consolidation within the Beetaloo Basin, creating a dominant player with approximately 2.9 million net prospective acres. This move aligns with broader industry trends of strategic mergers and acquisitions aimed at achieving scale, operational efficiencies, and strengthening market positions in key resource plays. The focus on the Beetaloo Basin underscores its growing importance as an unconventional gas resource, with this transaction positioning the combined entity as a leader in its development.

Comparison to Industry Standards

• The pro forma business will hold approximately 2.9 million net prospective acres, representing a 52% increase to Tamboran's previous acreage, positioning it as a major player in the Beetaloo Basin.
• With over 40,000 gross drilling locations across the pro forma acreage, the combined entity demonstrates significant development potential.
• The pro forma market capitalization of over US$500 million would position the combined entity as the fifth largest listed-Australian E&P (A$ million), based on Bloomberg data as of September 29, 2025, adjusted for AEL's proposed share issue.
• The implied acreage value of US$169 per acre for Falcon's assets is at a 4% discount to Tamboran's current implied acreage value of US$176 per acre, suggesting a favorable acquisition price for Tamboran compared to its existing asset valuation.

Management Changes

Corporate Governance

Legal Proceedings

• The outcome of any legal proceedings that may be instituted against Tamboran or Falcon is a risk.
• Reputational risks and potential adverse reactions from or changes to relationships with employees or business partners, including those resulting from the announcement or completion of the transaction, are noted.
• Any legal proceedings commenced by any stockholder of Company or Parent arising out of or related to the Agreement or the Arrangement are a risk.
• Any proceeding commenced after the date of the Agreement under any Regulatory Law in relation to the Transactions and any remedy action is a risk.

Related Party Transactions

• The Support Agreements were entered into by directors and officers of Falcon (Support Parties) with Tamboran, committing them to vote in favor of the Arrangement.
• Tamboran will enter into consulting agreements with certain directors and officers of Falcon, pursuant to which Tamboran will issue them Tamboran options.

Stakeholder Impact

• **Falcon Shareholders**: Receive a significant premium (19.7% over closing price, 53.2% over 90-day VWAP) for their shares and will become shareholders in a larger, consolidated entity with increased exposure to Beetaloo Basin activities. They will experience dilution in the combined entity.
• **Tamboran Stockholders**: Will experience dilution due to the issuance of new shares (Falcon shareholders will own ~26.8% of the pro forma business) but benefit from an accretive acquisition, expanded acreage, strengthened working interest, and a larger market capitalization.
• **Employees (Falcon)**: Existing Falcon options will be cancelled, but certain directors and officers will receive new Tamboran options and enter into consulting agreements.
• **Management**: Tamboran's current Chairman and Interim CEO, Dick Stoneburner, will remain in his role, with no planned changes to Tamboran's board or management.
• **Regulatory Bodies**: The transaction requires various approvals from Canadian Securities Authorities, SEC, NYSE, the Supreme Court of British Columbia, and Hungarian and Australian regulatory bodies.
• **Business Partners**: The transaction aims to create further alignment with Daly Waters Energy, LP. Potential for adverse reactions from or changes to relationships with other business partners is noted as a risk.

Next Steps

• Company to apply to the Supreme Court of British Columbia for an Interim Order.
• Company to prepare and file the Company Circular with Canadian Securities Authorities and TSXV.
• Parent to prepare and file the Parent Proxy Statement with the SEC.
• Company to hold the Company Meeting for shareholder approval of the Arrangement Resolution.
• Parent to hold the Parent Meeting for stockholder approval of the Stock Issuance.
• Company to obtain Falcon Australia's minority shareholder approval by December 30, 2025.
• Company to submit the Arrangement to the Court for a Final Order.
• Tamboran to cause its common stock to be issued in the Arrangement to be authorized for listing on the NYSE.
• Company to cooperate with delisting its common shares from TSXV and AIM at the Effective Time.
• Parent and Company to cooperate in good faith to determine a plan for retiring intercompany balances.
• Parent and Company to cooperate in filing corporate documents for registration of the Falcon Hungary Interests acquisition.

Key Dates

Recommendation

The acquisition is strategically compelling, creating a dominant player in the Beetaloo Basin with a significant increase in net prospective acreage and drilling locations. The transaction is accretive to Tamboran stockholders, acquiring Falcon's assets at a discount to Tamboran's current implied acreage value, and offers a substantial premium to Falcon shareholders. This consolidation strengthens Tamboran's position for future development and farmout processes, enhancing long-term value creation. While integration and regulatory risks exist, the clear strategic and financial benefits make this a strong positive for Tamboran.

Keywords

Tamboran Resources, Falcon Oil & Gas, Acquisition, Merger, Beetaloo Basin, Oil and Gas, Exploration and Production, Energy, Australia, SEC Filing, Corporate Consolidation, Shareholder Approval, NYSE, TSXV, AIM