Tamboran Resources H1 2025 Earnings Report

Tamboran Resources EPS Results

• Actual EPS: -$0.33
• Consensus EPS: -$0.34
• Beat/Miss: Beat by +$0.01
• One Year Ago EPS: N/A

Tamboran Resources Revenue Results

• Actual Revenue: N/A
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Tamboran Resources Announcement Details

• Quarter: H1 2025
• Date: 2/12/2025
• Time: After Market Closes
• Conference Call Date: Wednesday, February 12, 2025
• Conference Call Time: 5:00PM ET

Tamboran Resources (NYSE:TBN)oration, a natural gas company, focuses on developing unconventional gas resources in the northern territory of Australia. Its assets include a 25% non-operated working interest in EP 161; a 38.75% working interest in EPs 76, 98, and 117; and a 100% working interest in EPs 136 and 143, as well as EP (A) 197, located in the Betaloo Basin. Tamboran Resources Corporation was founded in 2009 and is headquartered in Sydney, Australia.

Tamboran Resources H1 2025 Earnings Call Transcript

Presentation

[Operator]

As a reminder, this conference is being recorded.

[Operator]

It is now my pleasure to introduce Joe Riddle, Chief Executive Officer. Thank you, sir. You may begin.

[Joel Riddle, Managing Director and Chief Executive Officer at Tamboran Resources]

Thank you, and welcome to Tamboron Resources' second quarter fiscal year twenty twenty five result presentation. My name is Joe Riddle, Chief Executive Officer for Tamborin Resources, and joining with me this morning is Eric Dyer, Chief Financial Officer. Before we get into the materials, I'd like to refer everyone to the disclaimer on Slide two associated with forward looking statements. Moving to Slide three and the highlights of the last quarter. First, the company successfully drilled and encased the SS3 well.

[Joel Riddle, Managing Director and Chief Executive Officer at Tamboran Resources]

This well included a full 10,000 foot horizontal section and drilled at a Beagle Basin record eight forty feet per day. Two, we completed the SS2H well over 35 frac stages were pumped and we delivered a record proppant intensity over those 35 stages. Company will be targeting an IP30 flow test in April of this year and following the thirty day flow test from SS2, we will be moving to SS3 to finish completion operations and target an IP30 flow test for SS3 in June of this year. The company continues to make progress toward a final investment decision for the Shenandoah South pilot development project. Over the quarter, we entered into binding agreements with the APA Group to support the build and construction of a 12 inches pipeline connecting the SS pilot to the local 12 inches pipeline to move gas from our pilot project to the local Northern Territory gas market where we'll be producing 40,000,000 cubic feet a day over the next fifteen years.

[Joel Riddle, Managing Director and Chief Executive Officer at Tamboran Resources]

First gas from this project remains on track to start in first half of twenty twenty six. Over the quarter, the company continues to make good progress around business development opportunities, including the progression of a data center strategy that we would envision being part of an expansion to our Phase one development. I will talk more detail around this later in the presentation. And finally, the company signed a non binding MOU with the ASX listed E and P company Santos around progressing technical studies associated with the expansion to the Darwin LNG project. The company ended the quarter with a cash balance of $59,400,000 This is following receipt of a R and D grant of $6,200,000 and the company remains fully funded to deliver IP30 flow tests from SS2 and SS3 through the June.

[Joel Riddle, Managing Director and Chief Executive Officer at Tamboran Resources]

Moving to Slide four, in more detail around the progression of our Shenandoah South pilot development, you can see by the map in the middle of the page, the company remains very focused around the million acre development area that's highlighted in the structure map on the left in yellow. As you zoom down into the middle of that 1,000,000 acre development area is our six well pad where we've now drilled two horizontal wells. These are the first two of six wells that we anticipate to develop our 40,000,000 cubic feet a day for this pilot development. You can see by the picture on the right, this is a snapshot of the new Liberty equipment that is currently on-site and has been progressing the completion of our SS2 and SS3 wells. Again, over the quarter, the company successfully drilled the SS3H well to 21,169 feet and we completed this drilling in twenty five days.

[Joel Riddle, Managing Director and Chief Executive Officer at Tamboran Resources]

Again, that represents over eight forty feet per day that was achieved on drilling performance and remains the fastest well that has been drilled in the Beelieu Basin to date. We geosteered the full 10,000 foot horizontal section within a 65 foot target and what we saw within that 10,000 foot horizontal well was the high quality contiguous middle back carry B Shell and most importantly no faulting. The company commits simulation operations on SS2 and SS3 in January of this year. On SS2, we completed 35 frac stages across the 5,500 foot horizontal section and achieved BIOLU Basin records for average profit intensity across those 35 stages. On SS3, the company took precautionary and proactive steps to pause completion operations based on a detection of stress and a case in connection.

[Joel Riddle, Managing Director and Chief Executive Officer at Tamboran Resources]

Remediation activities on SS3 are ongoing and we are targeting a continuation of the simulation program in second quarter of this year. Overall, we'll be targeting IP30 flow rates from SS2 in April of this year and an IP30 from the SS3 well in June of this year subject to weather conditions. Moving to Slide five, company continues to make significant improvements in drilling performance from our last well that we drilled over the quarter in SS3. This well was drilled in twenty five days at an average speed of eight forty three feet per day. That represents 43% faster than the SS2H well.

[Joel Riddle, Managing Director and Chief Executive Officer at Tamboran Resources]

In reference to the table on the bottom part of the slide, you can see the increases in performance we've made in SS3, primarily driven by the section of the top hole to the Merogue section, where historically it's taken between ten and eleven days to drill that section now in SS3. We drilled that section less than five days. And in the horizontal section where it took seventeen days to drill in SS2, we were able to drill in twelve point five days. The total drilling cost for SS3 is approximately $10,000,000 and the company has identified significant cost savings that will drive further reductions and increase drilling performance in our follow on pilot development wells being drilled in second half of this year. Moving to Slide six, one of the most encouraging elements of our two well drilling program this year has been the consistency in the geology that we've seen in our two wells SS2 and SS3 as it compares to the SS1 pilot hole that is roughly three miles south from these two horizontal wells.

[Joel Riddle, Managing Director and Chief Executive Officer at Tamboran Resources]

We've seen very consistent quality and a very gentle undulating structure across the full horizontal section with no faulting observed. In addition, we've seen very strong gas shows across both horizontal sections, which we believe will translate into very good productivity in our well test in both wells. Moving to Slide seven, as a summary of the stimulation campaign from SS2 and SS3. On our SS2 well, we completed 35 stages with our new Liberty equipment that's currently on-site. This was done over a 5,500 foot section and we were pumping a proppant intensity of approximately 2,700 pounds per foot.

[Joel Riddle, Managing Director and Chief Executive Officer at Tamboran Resources]

This represents a 26% higher profit intensity that we pumped at SS1H. And most encouragingly, the 18 of the 35 stages, we successfully executed the full Tamboron V2 design of pumping greater than 2,800 pounds per foot and pumping in at 90 to 100 barrels a minute. We are also able to achieve five stages a day for the single well operation on multiple days and this is in line with U. S. Operational efficiencies.

[Joel Riddle, Managing Director and Chief Executive Officer at Tamboran Resources]

We're currently cleaning up the SS2H well ahead of commencing a IP30 that will have a result to report to market in April of this year. On the SS3 well, we took proactive and precautionary steps to undertake a remediation of a stress in the casing connection that was observed. We anticipate this remediation to be resolved in the next thirty days ahead of recommencement of stimulation activities in second quarter of this year. We see this as an opportunity to incorporate lessons from the SS2H well to increase efficiencies and place a higher profit intensity across the 60 stages that we plan to pump in SS3. We'll be targeting an SS3 IP30 flow test result in June of this year.

[Joel Riddle, Managing Director and Chief Executive Officer at Tamboran Resources]

Moving to Slide eight and a summary of the completion designs between Shenandoah South 1H, Shenandoah South 2H and Shenandoah South 3H. As you can see, we've had the opportunity to apply learnings from the SS1H well into our recent SS2H well that we're calling our Tambourine V2 design. This is a design where we pumped 35 stages at little over 2,700 pounds per foot and we pumped 90 to 100 barrels a minute. We are anticipating targeting IP30 flow test results of greater than 10,700,000 cubic feet a day. Again, we are targeting this IP30 flow rate by April of this year.

[Joel Riddle, Managing Director and Chief Executive Officer at Tamboran Resources]

We will have the opportunity to apply learnings from this SS2H well into our SS3H well and where we will have the opportunity to optimize this Tamboron V2 design where we anticipate pumping 60 stages at greater than 2,800 pounds per foot and greater than 100 barrels a minute. We are planning to target IP30 flow rates of greater than 19,000,000 cubic feet a day for the Shenandoah South 3H well test that we anticipate in June. Moving to Slide nine, we remain on track for delivering our SS pilot project by first half of twenty twenty six. The results of our two wells, Shenandoah South 2H and Shenandoah South 3H will guide the number of wells that we will follow-up and drill later this year that will deliver into a binding gas sales agreement of $40,000,000 a day for fifteen point five years with the Northern Territory government. Over the quarter, we signed binding agreements with APA Group to deliver a 12 inches pipeline that will connect the pilot project to the local Northern Territory pipeline called the Amadeus Gas Pipeline that will deliver this 40,000,000 cubic feet a day to the local Northern Territory gas market.

[Joel Riddle, Managing Director and Chief Executive Officer at Tamboran Resources]

We also commenced procurement of the 40,000,000 a day facility. We'll be finalizing approvals for our Shenandoah South pilot project in the next few months ahead of a final investment decision that we'll look to take in mid twenty twenty five. Again, our project remains on track to deliver First Gas of 40,000,000 cubic feet a day in first half of twenty twenty six. Moving to Slide 10, as I mentioned in my opening comments, the company is looking at an opportunity to expand our Phase one development to include additional gas supply that could feed into a data center strategy. You can see by the map on the left, the Australia is becoming a major data center hub.

[Joel Riddle, Managing Director and Chief Executive Officer at Tamboran Resources]

Over 200 data centers are currently in Australia and we believe the Northern Territory has the opportunity to be a growth area for new data centers given the existing fiber optic cables that connect the Northern Territory within other areas of Australia, but most importantly into Asia Pacific. These fiber optic cables run about 30 miles from our Shenandoah South pilot project and we believe that this creates an opportunity to match gas from the Beetaloo Basin to feed into energy for new data centers being constructed in the Northern Territory. We have commenced commercial discussions with potential partners to develop multiple data centers in the Northern Territory and we will be updating the market further as we continue to make progress on this strategy. Moving to Slide 11. Over the quarter, we also executed a non binding MOU with Santos to evaluate an expansion to the existing Darwin LNG plant that Santos operates.

[Joel Riddle, Managing Director and Chief Executive Officer at Tamboran Resources]

This non binding MOU will consider technical studies to look at developing new supply from our jointly held EP-one 61 permit and connecting that to the Darwin LNG expansion where we anticipate up to 6,000,000 tons of new LNG capacity being built at Darwin LNG via Brownfield expansion. We believe this creates a really great opportunity to potentially integrate this Darwin LNG expansion with our Phase III NT LNG development. Moving to Slide 12, the company ended the quarter with a cash position of $59,400,000 that includes $6,200,000 that the company received via NR and D credit over the quarter. The company remains fully funded to deliver IP30 flow rates for our SS2 and SS3 wells. In addition, Tamborin is evaluating a range of options to fund the remaining wells in our SS pilot development and also associated infrastructure.

[Joel Riddle, Managing Director and Chief Executive Officer at Tamboran Resources]

In addition, the company continues to explore potential farm out opportunities to accelerate our Phase II and Phase III developments. These farm out opportunities could include the drilling of additional wells to support reserve maturation to underpin infrastructure tied to Phase two and Phase three of our business plan. Moving to Slide 13, you can see the upcoming catalyst starting in March where we'll commence the flow testing of our SS2H well and target an announcement on our IP30 from this SS2 well in April. Following the well test of SS2, we'll move to stimulate and flow test our SS3 well and target an announcement on our IP30 flow test from SS3 in June. In mid-twenty twenty five, we'll look to take a final investment decision on our SS pilot program that will again target first gas from this pilot project in first half of twenty twenty six.

[Joel Riddle, Managing Director and Chief Executive Officer at Tamboran Resources]

Thanks very much. And I'll turn the call back over to the operator for our question and answer session. Thank you. Thank

[Operator]

Our first question is from Kalei Akimene with Bank of America. Please proceed.

[Analyst]

Hey, good morning guys. This is Joel, Eric. I guess first off between the pipeline lateral, the pilot, the MOU, the data center news, you guys have been really busy and we like to see it. My first question is on the upcoming flow test and maybe this is two parts. So first part, can you remind us why there is a gap between the completion and the flow test?

[Analyst]

And second, can you remind us what the normalized flow test was for SS1? And I guess what I'm driving at is when you think of your target for SS3 at 19,000,000 cubic feet per day, to us it seems a touch conservative?

[Joel Riddle, Managing Director and Chief Executive Officer at Tamboran Resources]

Thanks very much for your question, Khalil. First on the initial question on the time window between completing the stimulation on SS2 and and SS2 flow test. We are again in the process of cleaning up the well. We're going to be running in our two seveneight tubing and we're going to be unloading the well in the next few weeks. And once we get gas breakthrough, we will start our IEP3 in early March.

[Joel Riddle, Managing Director and Chief Executive Officer at Tamboran Resources]

That also includes a ten day soak period and that soak period is due to learnings that we picked up from SS1, which is associated with having extended shut in to allow our completion to continue to induce superhighways within the shale and that's due to the highly defecated mid dock carry shale that we've pumped our completion into. And so that extra ten days has shown to have direct benefit from our SS1 well. So that's the extra time that we're taking before we initiate our IP30 load test. As far as the conservatism that's built in, you're exactly right. If you extrapolate the productivity that we saw in SS1 over the full 10,000 foot of the horizontal in SS3 at roughly about 19,000,000 cubic feet a day.

[Joel Riddle, Managing Director and Chief Executive Officer at Tamboran Resources]

So that's really what we're guiding towards. Obviously, as we have higher stimulated raw volume through increased profit intensity that we've been pumping for SS2 and expect to continue to pump in SS3. We have the potential to see higher rates than that.

[Analyst]

Got it. I appreciate that color. The second question is on the Santos MOU. So our understanding is that Santos has a position in EP-one 61 where you guys are the minority partner and that's different than where your pilot activity is concentrated in EP-ninety eight. So my question is on the scope of this study.

[Analyst]

Are they trying to derisk EP-one 61 before they move forward or is derisking your position in EP-ninety eight sufficient to move forward with the MOU?

[Joel Riddle, Managing Director and Chief Executive Officer at Tamboran Resources]

Yes. So really good question. We see the rocks between EP 161 and the pilot area on EP 98 being very similar in the deepest part of the basin. So, you got two depth of centers, one on the east that where the 161 block is focused and then the second big depth of center is on the west part of the basin. And so, we have data from the last horizontal wells that had been drilled on EP 161 in 2021 in which we flow tested greater than ninety days on both of those wells.

[Joel Riddle, Managing Director and Chief Executive Officer at Tamboran Resources]

Really that information guided us toward the SS1 simulation that we pumped last year. So, we see a lot of symmetry between what we're doing on SS pilot program and the number of pilot wells that we're drilling this year being very similar to techniques that we would be working with our partner Santos on EP-one 61. So, in a lot of ways, we're able to derisk the EP-one hundred and sixty one opportunity to what we're doing on EP-ninety eight. This is part of cracking the code on the completion design. So, as far as the PLNG expansion that we're working with Santos, I think we're also keeping an open mind on where gas could be sourced to supply that expansion train.

[Joel Riddle, Managing Director and Chief Executive Officer at Tamboran Resources]

And that will be part of the study that we finish with Santos over the course this year.

[Analyst]

So what's the path forward for DuraSCE one hundred and sixty one? What wells do they have planned?

[Joel Riddle, Managing Director and Chief Executive Officer at Tamboran Resources]

So we have an opportunity to drill additional horizontal wells in 2026. We're currently discussing two horizontal wells that will be drilled on EP 161 during 2026 and we hope to finalize that work program over the course of this year, hopefully by mid year.

[Analyst]

Great. I appreciate that. Thank you.

[Joel Riddle, Managing Director and Chief Executive Officer at Tamboran Resources]

I think the one thing I want to reinforce is that, I think it's important that we bring along our partners early in the day, so that when we think about a northern pipeline connecting the Beetaloo to Darwin, we do that in collaboration with all of our operators in the Beetaloo. And that's part of the really the push by Tambourine to include Santos as part of their going LNG expansion.

Participants

Executives

• Joel Riddle, Managing Director and Chief Executive Officer

Analysts

• Analyst