S-1: Tamboran Resources Plans U.S. Re-Domiciliation, Eyes NYSE Listing

Tamboran Resources is seeking shareholder approval for a scheme of arrangement to re-domicile from Australia to the United States, aiming for a potential NYSE listing.

Summary

• Tamboran Resources is proposing a scheme of arrangement to re-domicile its group from Australia to the United States by creating a new holding company, Tamboran US HoldCo, in Delaware.
• The scheme requires shareholder approval at a meeting on December 1, 2023, and court approval.
• If approved, Tamboran US HoldCo will acquire all Tamboran shares, and existing shareholders will receive equivalent securities in the form of CHESS Depositary Interests (CDIs) traded on the ASX.
• The company aims to list on a U.S. securities exchange, such as the NYSE, in 2024 to access a broader investor base and lower-cost capital markets.
• The total cost of implementing the re-domiciliation is estimated at A$555,000, excluding GST.
• An independent expert has concluded that the scheme is in the best interests of Tamboran shareholders.
• Shareholders are advised to carefully consider the advantages and disadvantages of the scheme, including potential tax implications and increased litigation exposure in the U.S.

Sentiment

Score: 7

Explanation: The document is largely positive, focusing on the benefits of the re-domiciliation and potential for future growth. However, it also acknowledges potential risks and disadvantages, presenting a balanced view.

Positives

• The scheme will better position Tamboran Group in a bigger, deeper capital market in the United States for continuing international growth.
• It will provide access to a broader U.S. investor pool that previously could not, or were unlikely to, invest in non-U.S. securities.
• The scheme will improve access to lower-cost U.S. debt and equity capital markets.
• It will simplify Tamboran Group's corporate structure for potential future United States merger, sale or acquisition transactions.
• The scheme may increase demand for Tamboran US HoldCo Shares in the event of a listing on a United States securities exchange such as NYSE.
• Tamboran Shareholders will retain their existing exposure to Tamboran Group by receiving equivalent securities in Tamboran US HoldCo.

Negatives

• Shareholders may disagree with the unanimous recommendation of the Tamboran Board and the conclusion of the Independent Expert.
• Shareholders may decide that they do not wish to become a CDI holder of a United States domiciled company.
• The potential taxation consequences of the Scheme may not suit your current financial position or taxation circumstances.
• The trading value of the Scheme Consideration is not certain and will depend on the price at which Tamboran US HoldCo CDIs trade on ASX after the Implementation Date.
• There may be exposure to increased litigation as a result of a parent company being domiciled in the United States, as the United States legal environment is generally understood to be more litigious than that of Australia.
• The Scheme, if approved, will result in additional fees and costs being incurred in order to implement the Scheme and additional listing and regulatory fees.

Risks

• Restrictions in foreign jurisdictions may make it impractical or unlawful for Scheme Consideration to be issued under the Scheme to, or received under the Scheme by, Tamboran Shareholders in certain jurisdictions outside Australia.
• The exact value of the Scheme Consideration that would be realised by individual Tamboran Shareholders will depend on the price at which Tamboran US HoldCo CDIs trade on ASX after the Implementation Date.
• Tamboran US HoldCo, as a Delaware corporation, may be exposed to more litigation than Tamboran due to the more litigious legal environment in the United States as compared to Australia.
• There is a risk that any material or costly dispute or litigation could adversely affect Tamboran US HoldCos reputation, financial performance or value.

Future Outlook

Tamboran US HoldCo intends to seek admission to have its shares traded on a United States securities exchange, such as NYSE, in the calendar year 2024, with expectations for a listing in the first half of 2024.

Management Comments

• The Tamboran Board unanimously recommends that you vote in favour of the Scheme, subject to no superior proposal emerging and the Independent Expert continuing to conclude that the Scheme is in the best interests of Tamboran Shareholders.
• The Tamboran Board believes that the Proposed Transaction will best position Tamboran Group for the next phase of its growth as Tamboran seeks to accelerate the commercialisation of the Beetaloo Sub-basin.

Industry Context

The announcement relates to broader industry trends of companies seeking access to larger capital markets and diversifying their investor base, particularly in the exploration and production sector. The move to the U.S. aligns with the trend of companies seeking simplified corporate structures for potential future merger, sale or acquisition transactions.

Comparison to Industry Standards

• The document does not provide a direct comparison to industry standards in terms of financial performance or operational metrics.
• However, it highlights the advantages of a U.S. domicile, such as access to a broader investor pool and lower-cost capital markets, which are common goals for companies in the exploration and production sector.
• The document mentions that the U.S. market is generally better informed regarding exploration and production companies due to its greater number of market participants and investors, which has the potential to lead to a stronger valuation of Tamboran US HoldCo over time and improve liquidity in trading of shares.

Legal Proceedings

• Proceedings have been commenced by Central Australian Frack Free Alliance (CAFFA) against the Minister for Environment Northern Territory and Tamboran B2 Pty Ltd (Tamboran B2) on 30 January 2023 in the Northern Territory Supreme Court (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 Tamboran B2 (formerly Origin Energy B2 Pty Ltd) under the Petroleum (Environment) Regulations 2016 (NT) (Regulations).

Stakeholder Impact

• Shareholders will retain an equivalent proportional economic interest in Tamboran US HoldCo as they previously held in Tamboran.
• United States based employees are likely to better understand a United States corporate structure, which should increase Tamboran Groups attraction and retention through equity-based compensation.

Next Steps

• Tamboran Shareholders should read the Scheme Booklet carefully and in its entirety.
• Tamboran Shareholders should decide how to vote on the Scheme and vote by attending the Scheme Meeting in person, online, or by appointing a proxy, attorney or body corporate representative to vote on their behalf.
• If the Scheme is approved by Tamboran Shareholders, Tamboran will apply to the Court to approve the Scheme at the Second Court Date.
• If the Scheme becomes Effective, Tamboran will lodge the Court order approving the Scheme with ASIC.
• An application will be made for the admission of Tamboran US HoldCo to the official list of ASX and for the quotation of Tamboran US HoldCo CDIs.
• Tamboran US HoldCo intends to seek admission to have its shares traded on a United States securities exchange, such as NYSE, in the calendar year 2024.

Key Dates

Keywords

re-domiciliation, scheme of arrangement, Tamboran Resources, Tamboran US HoldCo, CDIs, NYSE listing, shareholder vote, Delaware, capital markets, corporate structure