10-Q: Tamboran Resources Reports Q3 2025 Results, Announces $55 Million Capital Raise and Acreage Sale

Tamboran Resources Corporation announces its Q3 2025 financial results, highlighted by a $30.4 million net loss, and unveils a $55 million capital raise along with an agreement to sell acreage in the Beetaloo Basin.

Summary

• Tamboran Resources Corporation reported a net loss of $30.4 million for the nine months ended March 31, 2025.
• The company had cash and cash equivalents of $25.6 million as of March 31, 2025, a decrease from $74.7 million on June 30, 2024.
• Operating activities used $23.2 million in cash during the nine-month period.
• Investing activities used $73.7 million, primarily for exploration and evaluation activities.
• Financing activities provided $48.3 million, mainly from contributions from noncontrolling interest holders.
• The company entered into subscription agreements for a $55 million capital raise in May 2025.
• Tamboran also agreed to sell approximately 12.5% of its interest in certain retention licenses to Daly Waters Energy for $15 million.
• The company has capital commitments of $21.9 million related to Sweetpea, $2.5 million related to EP 161, $70.7 million related to the Beetaloo Joint Venture, and $4.9 million related to Midstream projects.
• A material weakness in internal control over financial reporting was identified.
• The company is working to remediate the material weakness in internal control over financial reporting.

Sentiment

Score: 4

Explanation: The sentiment is slightly negative due to the significant net loss, decreased cash reserves, and identified material weakness in internal control. However, the successful capital raise and acreage sale provide some positive offset.

Positives

• The company secured a $55 million capital raise to fund future development.
• An agreement to sell acreage for $15 million will provide additional capital.
• The company received $6.2 million in R&D tax credits.
• The company is actively working to remediate the material weakness in internal control over financial reporting by implementing a new enterprise resource planning system, implementing new controls and processes, providing training to control owners, and hiring a Vice President of Information Technology and a Financial Reporting Manager.

Negatives

• The company reported a significant net loss of $30.4 million for the nine months ended March 31, 2025.
• Cash reserves decreased substantially from $74.7 million to $25.6 million during the same period.
• A material weakness in internal control over financial reporting was identified, indicating potential risks in financial reporting reliability.

Risks

• The company's early stage of development and lack of material revenue until 2026 pose financial risks.
• Raising additional capital on acceptable terms may be challenging.
• The company's strategy depends on constructing additional pipeline capacity, which may not be secured.
• Drilling activities are speculative and may not yield commercially viable natural gas.
• The company faces operational complexities and inherent risks in drilling and hydraulic fracturing operations.
• Volatility in natural gas prices could adversely affect the company's financial condition.
• Community opposition and legal disputes related to native title and heritage issues could cause costly delays.
• The company's concentration of assets and operations in the Beetaloo makes it susceptible to region-specific risks.
• The company's recurring operational losses, negative cash flows, and cumulative net losses raise substantial doubt about its ability to continue as a going concern.

Future Outlook

The company expects to invest approximately $13.0 million for the remainder of the fiscal year ending June 30, 2025, to progress its development plans and anticipates revenue generation from production by late 2026, contingent on successful drilling, funding, commercial agreements, and infrastructure access.

Industry Context

Tamboran Resources is focused on developing unconventional gas resources in the Northern Territory of Australia, aiming to support the net-zero CO2 energy transition in Australia and the Asia-Pacific region. The company's activities are part of a broader trend of increasing natural gas exploration and development in Australia, driven by growing demand for cleaner energy sources and the country's potential as a major gas exporter.

Comparison to Industry Standards

• It is difficult to compare Tamboran's results directly to industry standards due to its early stage of development and unique focus on the Beetaloo Basin.
• Companies like Santos and Falcon Oil & Gas are also active in the region, but their financial profiles and operational strategies differ significantly.
• Tamboran's success will depend on its ability to execute its development plans efficiently and secure necessary funding, as well as navigate regulatory and environmental challenges.
• The company's commitment to net-zero Scope 1 emissions is a differentiating factor, but it may also increase production costs compared to competitors.

Legal Proceedings

• The Environment Centre Northern Territory (ECNT) lodged an Originating Application in the Northern Territory Civil and Administrative Appeals Tribunal (NTCAT) for a merits review of the Minister for Environment, Climate Change and Water Securitys (Ministers) approval of TB1 Operators Shenandoah South Exploration & Appraisal Program EP98 and EP117 Environment Management Plan (Shenandoah EMP) (NTCAT Merits Review).
• Lock the Gate Alliance Ltd (Lock the Gate) lodged an Originating Application in the Federal Court of Australia seeking an injunction under s475(2) of the Environment Protection and Biodiversity Conservation Act 1999 (Cth) (EPBC Act), to restrain TB1 Operator from conducting the Shenandoah South Pilot Project and a declaration under s 21 of the Federal Court of Australia Act 1976 (Cth) that the Shenandoah South Pilot Project is an action which involves unconventional gas development and is likely to have a significant impact on a water resource within the meaning of ss 24D and 24E of the EPBC Act (the Originating Application).

Related Party Transactions

• The Group transacted with H&P, a shareholder, incurring costs of $10,224,710 related to site mobilization, standby, drilling, labor and rig move costs.
• The Group transacted with DWE and DWI, which are wholly owned by Formentera Australia Fund, LP, which is managed by Formentera Partners, LP, a private equity firm of which Mr. Bryan Sheffield serves as managing partner.
• The Company issued 312,500 shares of Common Stock in satisfaction of the Group's obligation towards the Checkerboard fee.

Stakeholder Impact

• Shareholders will be diluted by the issuance of new shares in the capital raise.
• Employees may be affected by the company's financial performance and any potential cost-cutting measures.
• Customers and suppliers may be impacted by the company's ability to execute its development plans and bring natural gas to market.
• Creditors may be concerned about the company's ability to repay its debts given the significant net loss and decreased cash reserves.
• The local community may be affected by the company's operations, including environmental impacts and potential economic benefits.

Next Steps

• The company plans to file a registration statement with the SEC for the resale of shares issued in the capital raise.
• The company will continue to execute its development plans, including flow testing of the SS-2H ST1 well and progressing the SS-3H well.
• The company will continue to remediate the material weakness in internal control over financial reporting.
• The company will commence a formal farm-down of the Phase 2 Development Area following the release of the IP30 flow test from the Shenandoah South 2H sidetrack (SS-2H ST1) well, planned for June 2025.

Key Dates

Keywords

Beetaloo Basin, capital raise, acreage sale, financial results, exploration, natural gas, Tamboran Resources, drilling, production, midstream