8-K: Tamboran Advances Beetaloo Basin Gas Project with Record Flows

Tamboran Resources reports significant progress in its Beetaloo Basin development, including record well flow rates and strategic partnerships, targeting first gas by mid-2026.

Summary

• Tamboran Resources Corporation presented to analysts and investors during a site tour of its Beetaloo Basin assets on September 1, 2025.
• The company holds approximately 1.9 million net prospective acres in the Beetaloo Basin, comparable in size to leading U.S. shale gas producers.
• The SS-2H ST1 well achieved a record Beetaloo Basin IP90 flow test rate of 6.7 MMcf/d over a 5,482-foot horizontal section, with flow rates increasing by 2% during the final 30 days.
• The SS-2H ST1 IP90 result is in line with the average performance of over 11,000 Marcellus Shale wells, normalized to 10,000 ft lateral length.
• Tamboran is targeting initial gross production of 40 TJ/d (~39 MMcf/d) from the Shenandoah South Pilot Project, with first gas anticipated by mid-2026.
• The initial 40 TJ/d production is fully contracted to the Northern Territory Government until mid-2041 under a CPI-linked gas contract.
• Construction of the Sturt Plateau Compression Facility (SPCF) is approximately 54% complete and below budget, with a P50 cost of US$90 million (US$45 million net to Tamboran).
• The Sturt Plateau Pipeline (SPP), a ~23-mile, 12-inch pipeline owned and operated by APA Group, is planned to commence construction in mid-September 2025 at a total cost of ~US$40 million.
• Tamboran is progressing a farmout process for ~400,000 acres in the Phase 2 Development Area, targeting supply to the East Coast domestic gas market from 2028-2030.
• The East Coast gas market faces an anticipated ~1 Bcf/d shortfall, with average contracted prices for producers in 2025 being >200% higher than Henry Hub, averaging ~US$8.00 per mcf for July-December 2024.
• The company is targeting significant cost reductions, aiming to reduce drilling costs by ~40% to US$7.2 million per well and completions costs by ~US$10 million per well over its program.
• Local Northern Territory sand has been secured for the 2025-26 stimulation program at ~US$0.07/lb, a ~70% reduction from 2024 imported sand costs, with potential for further reduction to <US$0.05/lb through in-field mining.

Sentiment

Score: 9

Explanation: The filing presents overwhelmingly positive operational and strategic updates, including record well performance, significant cost reductions, strong market positioning, and clear progress towards first gas and future expansion. The strategic partnerships and government support further de-risk the development, indicating a very strong outlook.

Positives

• Achieved a record Beetaloo Basin IP90 flow rate of 6.7 MMcf/d from the SS-2H ST1 well, demonstrating exceptional well performance.
• SS-2H ST1 IP90 results are in line with the average of over 11,000 Marcellus Shale wells, indicating high-quality reservoir characteristics.
• Secured a binding gas sales agreement for 40 TJ/d (~39 MMcf/d) with the Northern Territory Government until mid-2041, providing long-term revenue certainty.
• Construction of the Sturt Plateau Compression Facility (SPCF) is 54% complete and below budget, indicating efficient project execution.
• Strategic partnerships with Helmerich & Payne, Liberty Energy, and APA Group de-risk execution and provide access to fit-for-purpose equipment and infrastructure.
• Significant cost reduction initiatives are underway, targeting a ~40% reduction in drilling costs to US$7.2 million per well and ~US$10 million per well in completions costs.
• Successfully secured local Northern Territory sand at ~US$0.07/lb, representing a ~70% cost reduction compared to imported sand in 2024.
• The Beetaloo Basin offers access to attractively priced gas markets, including the domestic Northern Territory market, the East Coast market (with prices >200% of Henry Hub), and high-growth Asian LNG markets.
• The company holds a dominant acreage position of ~1.9 million net prospective acres, providing significant long-term development potential.
• Demonstrated strong commitment to community benefits, with annual spend with NT-based businesses increasing by 58% to A$36.1 million and Indigenous businesses by 89% to A$1.3 million in FY25.
• The Northern Territory Government's Beneficial Use of Gas legislation allows for early revenue generation and royalty payments to Native Title Holders during exploration and appraisal.

Risks

• Movements in oil and gas prices could impact profitability and project economics.
• Risks associated with the development and operation of the acreage, including geological uncertainties and operational challenges.
• Exchange rate fluctuations could affect financial results, particularly given international operations and funding.
• Inability to obtain funding on acceptable terms or at all for future development programs.
• Loss of key personnel could impact operational efficiency and strategic direction.
• Inability to obtain appropriate licenses, permits, and/or other governmental approvals for ongoing and future projects.
• Inaccuracies in resource estimates could lead to deviations from projected production and financial outcomes.
• Share market risks and changes in general economic conditions could affect the company's valuation and access to capital.
• Cost inflation could impact project budgets and operating expenses.

Future Outlook

Tamboran is targeting first gas sales of 40 TJ/d (~39 MMcf/d) from the Shenandoah South Pilot Project by mid-2026, with expansion capability to ~100 TJ/d. The company plans to finalize a farmout of its Phase 2 Development Area by 1Q 2026, aiming to supply the East Coast domestic gas market from 2028-2030 to address an anticipated ~1 Bcf/d shortfall. For long-term growth, Tamboran is progressing its proposed NTLNG Project at Middle Arm, Darwin, with pre-FEED studies completed for 2x 6 MTPA LNG trains and targeting environmental approval by end of 2025. The company is also exploring opportunities to supply Santos' planned Darwin LNG expansion and targeting a Final Investment Decision for a Beetaloo to East Coast pipeline in late 2027.

Management Comments

• The presentation was approved and authorised for release by Mr. Dick Stoneburner, Chairman and Interim Chief Executive Officer of Tamboran Resources Corporation.

Industry Context

The announcement highlights Tamboran's strategic positioning within a dynamic Australian gas market characterized by an emerging supply shortfall on the East Coast (projected ~1 Bcf/d by ACCC/AEMO) and declining production from existing fields like Blacktip in the Northern Territory. This creates a strong demand environment for new gas supply, reflected in East Coast gas prices significantly higher than Henry Hub. The company's focus on LNG export opportunities at Middle Arm, Darwin, aligns with the broader Asian LNG market growth and the potential for backfilling existing LNG facilities like Ichthys and Darwin LNG as their offshore gas fields decline.

Comparison to Industry Standards

• Tamboran's SS-2H ST1 well achieved a record Beetaloo Basin IP90 flow rate of 6.7 MMcf/d, which, when normalized to a 10,000 ft lateral length, is in line with the average performance of over 11,000 Marcellus Shale wells produced for over 12 months, including those operated by Antero Resources, Expand, CNX Resources, Coterra Energy, EQT, HG Energy, Olympus Energy, Range Resources, and Repsol.
• The Beetaloo Basin's Velkerri B Shale production volumes are noted to be in line with the Marcellus Shale, but with a considerably different decline profile suggesting higher Estimated Ultimate Recoveries (EURs) for a comparable IP90.
• Tamboran's net acreage position of ~1.9 million acres in the Beetaloo Basin is comparable in size to the largest landholders in the Marcellus and Utica shale regions in the U.S., such as EQT, CNX, Range Resources, Comstock, Antero, and Gulfport, indicating a significant resource base.

Related Party Transactions

• Tamboran Resources Corporation is a partner in the Beetaloo Joint Venture (BJV) and co-owns the SPCF sub-trust (50% Tamboran, 50% Daly Waters Energy, LP) with Daly Waters Energy, LP (DWE). DWE is 100% owned by Formentera Australia Fund, LP, which is managed by Formentera Partners, LP, a private equity firm of which Bryan Sheffield serves as managing partner. This indicates a related party relationship in the joint venture and facility ownership.

Stakeholder Impact

• **Shareholders:** Potential for increased shareholder value due to strong well results, progress towards production, significant cost reductions, and access to high-priced gas markets. The farmout process for Phase 2 could also unlock value.
• **Employees:** Continued employment and potential growth opportunities as projects advance and operations expand.
• **Customers (Northern Territory Government):** Enhanced energy security for Territorians through a binding gas sales agreement for 40 TJ/d, providing a reliable local gas supply as existing sources decline.
• **Customers (East Coast & LNG Markets):** Future supply opportunities for East Coast gas retailers and Asian LNG buyers, addressing anticipated market shortfalls and demand growth.
• **Suppliers:** Increased business opportunities for Northern Territory-based and Indigenous businesses, with Tamboran committing to prioritize local support and reporting significant increases in local spend.
• **Native Title Holders:** Increased royalty payments expected from mid-2026 with the commencement of gas sales under the Beneficial Use of Gas legislation, following a historic agreement with Native Title Holders and the Northern Land Council.
• **Creditors/Lenders:** De-risked project financing for the SPCF due to project progress and cost control, potentially attracting favorable lending terms.

Next Steps

• Commence RBC farmout process for the Phase 2 Development Area in 2H 2025.
• Continue drilling of SS-4H/5H/6H Pilot development wells in 2H 2025.
• Target Final Investment Decision (FID) of the proposed SS Pilot Project in 2H 2025.
• Commence construction of the SPCF compressor and SPP pipeline in 2H 2025.
• Stimulate and conduct IP30 flow test of SS-4H in 2H 2025.
• Finalize farmout of the Phase 2 Development Area in 1Q 2026.
• Stimulate SS-3H, 4H, 5H, and 6H wells ahead of commencement of production in 1H 2026.
• Target SS Pilot Project first gas sales of 40 TJ/d (~39 MMcf/d) by mid-2026.
• Investigate long-term solutions for concentrated liquid waste disposal, such as evaporation ponds or re-injection wells.
• Target multiple wells in 2026 to book reserves to support a Phase 2 project sanctioning decision.
• Continue ongoing discussions with potential third-party strategic partners to develop the first Beetaloo Basin local sand mine in 2026.
• APA Group to continue processing approvals and route selection for the 1,000-mile pipeline connecting the Beetaloo Basin to the East Coast gas market, targeting FID in late 2027.
• NT Government to complete region-wide environmental approval process for the NTLNG project by end of 2025.

Key Dates

Recommendation

The filing presents compelling evidence for a 'strong buy' recommendation. Tamboran has demonstrated exceptional operational execution with a record IP90 flow rate from its SS-2H ST1 well, comparable to top-tier U.S. shale plays. The company has a clear, de-risked path to initial production by mid-2026 with a fully contracted, CPI-linked gas sales agreement. Significant cost reduction initiatives, including a 70% cut in sand costs, are enhancing project economics. Strategic partnerships and strong government support further mitigate execution risks. The company is well-positioned to capitalize on the high-priced East Coast gas market shortfall and long-term Asian LNG demand, with substantial acreage providing future growth potential. These factors collectively point to a strong growth trajectory and significant value creation for investors.

Keywords

Tamboran Resources, Beetaloo Basin, natural gas, shale gas, LNG, Northern Territory, Australia, energy exploration, gas production, drilling, hydraulic fracturing, gas pipeline, gas market, cost reduction, IP90, Marcellus Shale, Sturt Plateau Compression Facility, Sturt Plateau Pipeline, Middle Arm LNG