S-1/A: Tamboran Resources Eyes NYSE Listing with $155 Million IPO

Tamboran Resources Corporation, an Australian natural gas exploration company, is seeking to raise $155 million through an initial public offering on the New York Stock Exchange.

Summary

• Tamboran Resources Corporation is planning an IPO to raise $155 million to fund its Beetaloo Basin natural gas development.
• The company is offering 6,500,000 shares with an anticipated initial public offering price between $24.00 and $27.00 per share.
• Cornerstone investors have indicated an interest in purchasing up to $22.5 million in shares at the IPO price.
• Daly Waters Energy, LP, will receive $7.5 million in shares at the IPO price to satisfy joint venture obligations.
• The company aims to use proceeds to fund the Shenandoah South Pilot Project, targeting 40 MMcf/d gross plateau production in 1H 2026.
• Tamboran plans to drill two wells in 2024 and four wells in 2025 as part of its development plan.
• The company is targeting long-term development well costs of $16 million per well at depths of approximately 9,800 feet with 60 stages.
• The company has set a target to exceed the Australian governments requirements by reaching net zero equity Scope 1 and 2 GHG emissions upon commencement of commercial production.

Sentiment

Score: 6

Explanation: The document presents a mix of positive and negative aspects. The company has a strong asset base and strategic partnerships, but it is still in an early stage of development and faces significant risks and challenges. The sentiment is neutral to slightly positive.

Positives

• The company has a leading acreage position in the high-quality Beetaloo Basin.
• The company has access to premium markets in Australia and Asia.
• The company has a high caliber and experienced management team.
• The company is committed to net zero equity Scope 1 and Scope 2 emissions.
• The company has high quality, blue-chip strategic partners including Helmerich & Payne, Liberty Energy, APA Group, BP, and Shell.

Negatives

• The company is an early stage development company with no material revenue expected until 2026, at the earliest.
• The company has no proved reserves at this time.
• The company has recurring losses from operations, negative cash flows and substantial cumulative net losses raise substantial doubt about our ability to continue as a going concern.

Risks

• The company's business plan requires substantial additional capital, which it may be unable to raise on acceptable terms.
• The company's ability to deliver natural gas to the Australian East Coast and Asian markets depends on the construction of additional pipeline capacity.
• Drilling wells is speculative and may not result in any discoveries or additions to future production or reserves.
• The company intends to import and implement U.S. practices and technology for use in the development of its properties in the Northern Territory, but there is limited experience with these practices and technology within the workforce in the areas it operates.
• Natural gas prices are volatile and a reduction or sustained decline in prices may adversely affect the company's business, financial condition or results of operations.
• The company is required by the Australian government to produce natural gas in the Beetaloo on a Scope 1 net zero basis upon commencement of commercial production, and meeting this requirement may increase its costs of production.

Future Outlook

The company plans to drill additional wells, construct a compression and dehydration plant, and build a pipeline to achieve 40 MMcf/d gross plateau production in 1H 2026, and is targeting long-term development well costs of $16 million per well at depths of approximately 9,800 feet with 60 stages.

Industry Context

The announcement comes amid increasing global demand for LNG and underinvestment in new supply, which is expected to lead to LNG supply shortages. The Australian East Coast natural gas market has seen increased demand and is expected to face gas shortages through the remainder of this decade.

Comparison to Industry Standards

• The company believes the Beetaloo has geology similar to that of the Marcellus Shale of the Appalachian Basin in the northeastern United States.
• The company is importing U.S. unconventional drilling and completion techniques, best-practices and technology, to reduce costs and increase production efficiencies.
• The company is targeting long-term development well costs of $16 million per well at depths of approximately 9,800 feet with 60 stages, which is comparable to U.S. onshore operations.

Legal Proceedings

• The Central Australian Frack Free Alliance (CAFFA) initiated a legal dispute against the Minister for Environment Northern Territory and TB1 Operator in the Northern Territory Supreme Court seeking to set aside the Ministers decision to approve the Amungee AW Delineation Program Environment Management Plan (ORI11-3) Exploration Permit (EP) 98 (EMP) submitted by TB1 Operator.

Related Party Transactions

• TB1 is a 50/50 joint venture between TR West (a wholly owned subsidiary of Tamboran) and Daly Waters, an entity controlled by Bryan Sheffield.
• Bryan Sheffield beneficially owns 16.7% of Tamboran's common stock and has the right to nominate up to two of Tamboran's directors.
• Bryan Sheffield, through Daly Waters Royalty, also holds a 2.3% ORRI over all of Tamboran's Beetaloo assets.
• John Bell, a director, is a Senior Vice President, International & Offshore, at Helmerich & Payne, Inc.
• We intend to issue to Daly Waters, a portfolio company of Formentera Partners, LP (a private investment firm co-founded and managed by Bryan Sheffield), or its nominee, $7.5 million in shares of Tamborans common stock at the initial public offering price in a private placement at the closing of the offering, in satisfaction of certain obligations under a joint venture agreement between Tamboran and DWE.
• In June 2024, we issued to H&P the Convertible Note with an original principal amount of $9.4 million.

Stakeholder Impact

• Shareholders: Potential for capital appreciation and dividends (though no dividends are expected in the near term).
• Employees: Job creation and potential for career growth.
• Customers: Access to a reliable supply of natural gas.
• Suppliers: Opportunities to provide goods and services to the company.
• Creditors: Increased financial stability and ability to repay debts.

Next Steps

• Drill and complete an additional two wells in 2024 and four wells in 2025.
• Progress a project to design and construct a 40 MMcf/d compression and dehydration plant.
• Progress a ~20 mile pipeline to the existing gas pipeline network (Shenandoah South Pilot Project).
• Joint venture approval of the Shenandoah South Pilot Project in mid-2024.
• Achieve ~40 MMcf/d (gross) plateau production in 1H 2026.
• Commence construction of the NTLNG project as early as 2027.
• Commencement of commissioning of the first LNG train in 2030.

Key Dates

Keywords

Beetaloo Basin, natural gas, exploration, production, IPO, Tamboran Resources, Australia, energy, drilling, LNG