S-1/A: Tamboran Resources Launches IPO to Fuel Beetaloo Basin Development

Tamboran Resources is offering 6.5 million shares of common stock in an IPO to fund its natural gas development plans in the Beetaloo Basin.

Summary

• Tamboran Resources Corporation is conducting an initial public offering (IPO) of 6.5 million shares of its common stock.
• The company has granted underwriters an option to purchase up to 975,000 additional shares.
• The anticipated IPO price is 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.
• At the closing of the offering, $7.5 million in shares will be issued to Daly Waters Energy, LP at the IPO price to satisfy joint venture obligations.
• The company intends to list its common stock on the New York Stock Exchange (NYSE) under the symbol TBN.
• The proceeds from the IPO will be used to fund the company's development plan and for general corporate purposes.
• Tamboran is an early-stage company focused on developing natural gas resources in the Beetaloo Basin in Australia.
• The company aims to achieve net zero equity Scope 1 and 2 emissions from its operations.

Sentiment

Score: 6

Explanation: The document presents a balanced view, highlighting both the opportunities and risks associated with the company's business plan. The company's focus on net zero emissions and strategic partnerships are positive, but the early stage of development and dependence on future capital raises create uncertainty.

Positives

• The company has secured interest from cornerstone investors, indicating confidence in its prospects.
• Listing on the NYSE will provide access to a larger pool of investors and increase visibility.
• The company's commitment to net zero emissions aligns with growing environmental concerns and regulations.
• The IPO will provide the necessary capital to advance the company's development plans in the Beetaloo Basin.

Negatives

• The indication of interest from cornerstone investors is non-binding and may not result in actual purchases.
• The company is an early-stage development company with no material revenue expected until 2026.
• The company has no proved reserves at this time.
• The company's recurring losses from operations, negative cash flows and substantial cumulative net losses raise substantial doubt about its ability to continue as a going concern.

Risks

• The company's business plan requires substantial additional capital, which it may be unable to raise.
• The company's ability to deliver natural gas to the Australian East Coast and Asian markets depends on the construction of additional pipeline capacity.
• The areas the company decides to drill may not yield natural gas in commercial quantities or quality.
• 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.
• 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 it also has set an internal goal of producing natural gas with net zero equity Scope 1 and 2 emissions, but meeting these requirements and goals may increase its costs of production, and it may be unable to meet these requirements and goals.
• The company's recurring losses from operations, negative cash flows and substantial cumulative net losses raise substantial doubt about its ability to continue as a going concern.

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. It also intends to drill additional wells to supply natural gas for export through existing LNG plants and its proposed NTLNG facility.

Industry Context

The announcement comes amid increasing demand for natural gas in both domestic Australian markets and select South and East Asian markets, with the Beetaloo Basin seen as a key potential source of supply. The company's focus on net zero emissions aligns with the Australian government's policy and global trends towards cleaner energy.

Comparison to Industry Standards

• The document mentions the Marcellus Shale of the Appalachian Basin in the northeastern United States as an analogous reservoir to the Middle Velkerri shale of the Beetaloo, having similar rock and fluid properties, similar reservoir conditions, and drive mechanism.
• The document mentions that the cost to ship LNG from Darwin to Japan is approximately 40% lower than the cost to ship LNG from Qatar.

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 (the Proceedings).
• The Proceedings seek 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 Joint Venture Agreement: TB1 is a 50/50 joint venture between TR West (Tamboran's wholly owned subsidiary) and Daly Waters (owned by Bryan Sheffield).
• H&P Drilling Contract: Tamboran has a drilling contract with Helmerich & Payne International Holdings, LLC, where John Bell, a director, is a Senior Vice President.
• H&P Convertible Note: Tamboran issued a convertible note to H&P.
• Sweetpea Transaction: Tamboran acquired Sweetpea from Longview Petroleum LLC, where David N. Siegel, a director of Tamboran, was also a director of Longview.
• Daly Waters Royalty holds a 2.3% ORRI over all of Tamboran's Beetaloo assets.

Stakeholder Impact

• Shareholders: Dilution from the IPO and potential future equity issuances.
• Employees: Potential for job creation and career advancement as the company grows.
• Customers: Access to a new source of natural gas.
• Suppliers: Opportunities to provide goods and services to the company.
• Local Communities: Potential for economic development and job creation in the Beetaloo Basin.

Next Steps

• Drill and complete an additional two wells in 2024.
• Drill and complete 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.
• Seek joint venture approval of the Shenandoah South Pilot Project in mid-2024.
• Achieve ~40 MMcf/d (gross) plateau production in 1H 2026.
• Market the gas produced from initial wells in the Northern Territory beginning in 2026.
• Commence construction of the NTLNG project as early as 2027.
• Commence commissioning of the first LNG train in 2030.

Key Dates

Keywords

IPO, Tamboran Resources, Beetaloo Basin, natural gas, exploration, production, NYSE, emissions, Australia, CDIs