8-K: Tamboran Resources Announces FY24 Results, Highlights Beetaloo Basin Progress and Strategic Partnerships

Tamboran Resources reported its FY24 results, showcasing progress in the Beetaloo Basin with key achievements including a binding gas sales agreement and strategic partnerships.

Summary

• Tamboran Resources Corporation has released its financial and operating results for the fiscal year ended June 30, 2024.
• The company achieved the highest normalized flow rates from the Beetaloo Basin to date, specifically 5.8 MMcf/d from the Shenandoah South 1H well.
• A 15.5-year binding gas sales agreement was signed with the Northern Territory Government for the proposed Shenandoah South Pilot Project.
• Tamboran secured US$82 million in funding for its 2024 Beetaloo Basin drilling program through a successful IPO on the NYSE.
• Strategic agreements were established with Liberty Energy to import a modern US frac fleet and with APA Group for pipeline development.
• The company has signed LOIs with six East Coast gas buyers for up to 875 MMcf/d, representing over 50% of current East Coast gas demand.
• Two MOUs were signed with bp and Shell for 2.2 MTPA of LNG each, and Bechtel was awarded pre-FEED activities for the proposed NTLNG project.
• The company aims to grow Beetaloo Basin gas production to 2 Bcf/d (gross) by 2030 to supply NT, East Coast, and Asia Pacific markets.
• The Shenandoah South 1H well logged approximately 480 feet of high-quality Middle Velkerri shale at a depth of around 10,000 feet.
• The proposed Shenandoah South Pilot Project is targeting first gas production of approximately 40 MMcf/d (gross) in the first half of 2026.

Sentiment

Score: 8

Explanation: The document presents a positive outlook with strong operational results, strategic partnerships, and significant market opportunities. The company is making good progress towards its goals, although there are inherent risks in the industry.

Positives

• The highest normalized flow rates in the Beetaloo Basin were achieved, indicating strong well performance.
• The binding gas sales agreement provides a secure revenue stream for the pilot project.
• Successful IPO on the NYSE secured significant funding for development activities.
• Strategic partnerships with Liberty Energy and APA Group bring expertise and resources.
• The company has secured significant potential gas sales to the East Coast market.
• The geological properties of the Mid-Velkerri shale are comparable to the Marcellus Shale.
• The company is on track to achieve first gas production from the pilot project in 1H 2026.
• The import of a modern US frac fleet will improve efficiency and reduce costs.
• The company has secured a site for the NTLNG project at Middle Arm.
• The Australian Federal Government is contributing ~US$1.0 billion towards the common user infrastructure for NTLNG.

Negatives

• The document notes that the timing of phased development is flexible and subject to commercialisation of Beetaloo gas resources and key stakeholder and JV approvals.
• The company is subject to known and unknown risks, many of which are beyond the ability of Tamboran to control or predict.
• The company is dependent on key management personnel.
• The company is subject to risks associated with the development and operation of the acreage, exchange rate fluctuations, an inability to obtain funding on acceptable terms or at all, loss of key personnel, an inability to obtain appropriate licenses, permits and or/or other approvals, inaccuracies in resource estimates, share market risks and changes in general economic conditions.

Risks

• The company faces risks related to oil and gas price fluctuations.
• There are risks associated with the development and operation of the acreage.
• Exchange rate fluctuations could impact financial results.
• The company may face challenges in obtaining funding on acceptable terms.
• Loss of key personnel could disrupt operations.
• The company may encounter difficulties in obtaining necessary licenses and permits.
• Inaccuracies in resource estimates could affect project viability.
• Share market risks and changes in general economic conditions could impact the company's value.
• The company is dependent on key management personnel.
• The company is subject to risks associated with the development and operation of the acreage, exchange rate fluctuations, an inability to obtain funding on acceptable terms or at all, loss of key personnel, an inability to obtain appropriate licenses, permits and or/or other approvals, inaccuracies in resource estimates, share market risks and changes in general economic conditions.

Future Outlook

Tamboran aims to grow Beetaloo Basin gas production to 2 Bcf/d (gross) by 2030, supplying the Northern Territory, East Coast, and Asia Pacific markets. The company is progressing towards first gas from the Shenandoah South Pilot Project in 1H 2026 and is advancing the NTLNG project at Middle Arm.

Management Comments

• Joel Riddle, Managing Director and Chief Executive Officer, approved and authorized the release of this announcement.

Industry Context

The announcement highlights Tamboran's efforts to address the projected gas shortfalls on the Australian East Coast, where prices are significantly higher than Henry Hub. The company's strategic partnerships and focus on large-scale development position it to capitalize on the growing demand for gas in the region and potentially in Asia Pacific.

Comparison to Industry Standards

• The Shenandoah South 1H well's IP90 flow rate compares favorably to the average Marcellus Shale well performance, a major US shale gas play.
• The company is using US-style completion designs and technology, such as the imported Liberty Energy frac fleet, to improve efficiency and reduce costs, similar to practices in the Marcellus and other US shale basins.
• The company is targeting a production rate of 2 Bcf/d by 2030, which is a significant volume comparable to the production of major shale gas plays globally.
• The company's strategic partnerships with experienced companies like Liberty Energy, APA Group, and Bechtel are similar to the collaborative approaches used in other large-scale energy projects.

Stakeholder Impact

• Shareholders will benefit from the company's progress and potential for future growth.
• Employees will be involved in the development and operation of the Beetaloo Basin assets.
• Customers in the Northern Territory and East Coast will have access to a new source of gas supply.
• Suppliers will benefit from the company's increased activity and demand for services.
• Creditors will be interested in the company's financial performance and ability to repay debts.

Next Steps

• Complete drilling and stimulation activities for SS-2H and SS-3H wells in 4Q 2024.
• Commence flow testing of SS-2H and SS-3H wells in 4Q 2024.
• Secure final stakeholder and regulatory approvals for the proposed Shenandoah South Pilot Project by YE 2024.
• Announce IP30 flow test results from SS-2H and SS-3H in 1Q 2025.
• Complete pre-FEED studies for the proposed NTLNG project with Bechtel Corporation in 1H 2025.
• Commence construction of the SPCF and SPP infrastructure in 1H 2025.
• Achieve first gas from the proposed Shenandoah South Pilot Project in 1H 2026.

Key Dates

Keywords

Beetaloo Basin, Natural Gas, LNG, Shale Gas, Drilling, Fracking, Gas Sales Agreement, Northern Territory, East Coast Gas Market, NTLNG, Pilot Project, Production