Executive Summary / Key Takeaways

• Strategic Beetaloo Development: Tamboran Resources Corporation is an early-stage natural gas exploration and production company focused on unlocking significant unconventional gas resources in Australia's Beetaloo Basin, positioning itself as a crucial player in the region's energy transition.
• Technological Edge & Operational Milestones: The company leverages advanced U.S. unconventional drilling and completion techniques, which have already yielded record flow rates from its Shenandoah South Pilot Project, demonstrating a competitive advantage in resource extraction efficiency.
• Integrated Commercialization Pathway: Tamboran is executing a three-phase business plan, including the Shenandoah South Pilot Project targeting 40 MMcfd by mid-2026, a high-capacity pipeline to Australia's East Coast, and a proposed Northern Territory LNG (NTLNG) export facility for Asian markets, underpinned by strategic partnerships.
• Net Zero Commitment & ESG Focus: A core tenet of Tamboran's strategy is its commitment to achieving net zero equity Scope 1 and 2 emissions upon commercial production, aligning with Australian government regulations and global energy transition goals.
• Capital-Intensive Growth & Risks: As a development-stage company, Tamboran faces substantial funding requirements and recurring losses, with its ability to continue as a going concern dependent on successful capital raises and project execution amidst volatile commodity prices and regulatory complexities.

The Beetaloo Basin: A New Frontier for Australian Gas

Tamboran Resources Corporation ($TBN) is strategically positioned at the forefront of developing Australia's Beetaloo Basin, an area believed to hold significant unconventional natural gas resources. The company's overarching strategy is to become a leading supplier of low-carbon dioxide natural gas to both the Australian East Coast and key Asian markets, playing a constructive role in the global energy transition. This ambition is rooted in its extensive acreage position, holding approximately 1.90 million net prospective acres, making it the largest acreage holder in the Beetaloo Basin. The company's journey, originating in 2009 with a focus on Australian oil and gas, sharpened by 2014 to concentrate solely on the Northern Territory, culminating in its U.S. IPO in July 2024.

The Beetaloo Basin's geological properties, particularly the Middle Velkerri B formation, are considered analogous to the highly successful Marcellus Shale in the northeastern United States, sharing similar rock and fluid properties, reservoir conditions, and drive mechanisms. This geological similarity is a cornerstone of Tamboran's foundational strength: its commitment to importing and implementing advanced U.S. unconventional drilling and completion techniques. This technological transfer is not merely an operational choice; it is a critical differentiator designed to enhance efficiency, reduce costs, and achieve production in compliance with Australia's stringent greenhouse gas (GHG) regulations.

Technological Edge and Operational Prowess

Tamboran's core technological differentiation lies in its application of proven U.S. unconventional drilling and completion methodologies adapted for the Beetaloo Basin. These techniques enable the drilling of longer horizontal laterals and the execution of more stimulated stages per well, significantly increasing the contact area with the producing formation. The company is targeting long-term development well costs of $16 million per well, featuring horizontal sections exceeding 10,000 feet with 60 stages. This contrasts with earlier, less efficient methods and is expected to yield substantial production efficiencies and cost reductions over time, driven by economies of scale, continued infrastructure development, and resource maturation.

The tangible benefits of this technological approach are already evident in operational achievements. The SS-2H ST1 well, part of the Shenandoah South Pilot Project, delivered a record Beetaloo Basin IP30 flow rate of 7.2 MMcf/d from a 5,482-foot horizontal section, a result in line with average IP30 rates from the Marcellus dry gas area. This was followed by a record IP90 flow rate in August 2025, with flow rates increasing to 6.5 MMcf/d over the final 30-day period without downhole intervention. These performance metrics underscore the effectiveness of Tamboran's drilling and stimulation programs, which are crucial for de-risking the commercialization of its unconventional gas resources. The company's strategic arrangement with Liberty Energy Inc. (LBRT) for dedicated frac fleets and personnel, along with a 10-year option with Helmerich & Payne, Inc. (HP) for up to four additional FlexRigs, further solidifies its access to critical technology and expertise.

Strategic Initiatives and Market Positioning

Tamboran's business plan unfolds in three distinct phases, each designed to progressively unlock value from the Beetaloo Basin. The first phase, the Shenandoah South Pilot Project, is focused on transitioning to commercialization by drilling and stimulating five wells and developing the Sturt Plateau Compression Facility (SPCF). The company aims to achieve 40 MMcfd gross plateau production from this project by the second half of calendar year 2026, subject to weather conditions and final stakeholder approvals. The recent Final Investment Decision (FID) on this Pilot Project marks a significant milestone, moving Tamboran from an explorer to a producer.

The second phase involves constructing a new high-capacity pipeline, in partnership with APA Group (APA), to connect the Beetaloo to Australia's East Coast gas grid. This pipeline is anticipated to reduce gas transportation costs by up to 50%. With Australia's East Coast facing a forecast gas shortfall in the late-2020s, this pipeline offers a near-term opportunity for Beetaloo gas to address a critical supply gap. Tamboran has already secured non-binding letters of intent from six of Australia's largest energy retailers for an aggregate volume of 875 MMcfd over 10 to 15 years, highlighting strong market demand.

The third phase targets South and East Asian markets through the proposed Northern Territory LNG (NTLNG) export facility near Darwin's Middle Arm Precinct (MAP). Pre-FEED studies by Bechtel, a leading LNG EPC contractor, affirm the feasibility of commissioning the first LNG train in the early 2030s, with construction estimated to take five years. Non-binding memoranda of understanding with bp (BP) and Shell (SHEL) for 20-year LNG purchase contracts, totaling 4.40 MTPA, underscore the international market's interest in Tamboran's potential supply.

In a significant strategic move, Tamboran announced its intent to acquire Falcon Oil & Gas Ltd. in September 2025, a transaction valued at £128 million (C$239.00 million) in shares and cash. This acquisition is designed to consolidate Tamboran's acreage position across the majority of the Beetaloo depocenter, increasing its net prospective acres to approximately 2.9 million. This consolidation is expected to strengthen Tamboran's ownership over the Phase 2 Development Area, facilitating a farm-down process with RBC Capital Markets to bring in new partners while maintaining a material working interest.

Competitive Landscape and Differentiated Approach

The oil and natural gas industry is intensely competitive, with Tamboran competing globally against larger, more diversified companies such as Santos Limited (STO), Origin Energy Limited (ORG), Woodside Energy Group Ltd (WDS), and Beach Energy Limited (BPT). While these competitors possess greater resources and often engage in midstream and refining operations, Tamboran differentiates itself through its specialized focus on unconventional gas in the Beetaloo Basin.

Tamboran's position as the largest acreage holder and operator in the Beetaloo Basin provides a significant competitive advantage, supporting its efforts to establish commercial production volumes sufficient to stimulate investment in in-basin frac sand and other services. The basin's geographical features, with few operators and no urban areas, are conducive to the application of U.S.-style unconventional drilling techniques, allowing for longer laterals and greater efficiencies compared to more constrained operating environments. This regional expertise and control over its assets enable Tamboran to potentially achieve faster project timelines in exploration and development.

However, Tamboran's smaller scale and concentrated asset base in the Beetaloo Basin present vulnerabilities compared to its larger, more diversified rivals. Companies like Santos and Woodside benefit from broader portfolios and established global presences, which can offer greater financial stability and market reach. Origin Energy, with its integrated energy approach including retail and renewables, also presents a more diversified risk profile. Tamboran's business model, dependent on higher natural gas prices from Asian and domestic Australian markets relative to U.S. prices to offset its higher operating costs, highlights its sensitivity to commodity price volatility.

Tamboran's commitment to net zero equity Scope 1 and 2 emissions, mandated by Australian law for shale gas facilities exceeding 100,000 tonnes of CO2-e emissions per fiscal year, also serves as a competitive differentiator in an increasingly ESG-conscious market. While this commitment may increase production costs, it positions Tamboran favorably against competitors who may face greater challenges in meeting evolving environmental standards.

Financial Performance and Liquidity

As an early-stage development company, Tamboran has not yet generated any revenue from natural gas production, a situation expected to continue until at least mid-calendar year 2026. The company has incurred significant operating losses and negative cash flows, with an accumulated deficit of $167.28 million as of June 30, 2025. Total operating costs and expenses surged to $39.32 million in fiscal year 2025 from $20.52 million in fiscal year 2024, reflecting increased development activity. Key drivers of this increase included a $4 million rise in compensation and benefits due to restricted stock units and headcount, a $2 million increase in exploration expenses, $6 million in LNG feasibility study expenses, and a $6 million Checkerboard fee.

Capital expenditures for exploration and development have also seen a substantial increase, with total costs incurred in natural gas exploration and development rising to $137.10 million in fiscal year 2025 from $76.23 million in fiscal year 2024. This significant investment underscores the capital-intensive nature of its development program.

Tamboran's liquidity is primarily supported by cash on hand, proceeds from recent private placements, and anticipated future equity or debt financings. As of June 30, 2025, cash and cash equivalents stood at $39.40 million, a decrease of $35.30 million from the prior year, primarily due to operational spending on pilot wells, SPCF long-lead items, and NT LNG pre-FEED services. The company successfully closed the first tranche of a Private Investment in Public Equity (PIPE) in May 2025, raising $38.7 million, with a second tranche closing in July 2025 for an additional $16.69 million, bringing total gross proceeds to approximately $55.4 million. These funds, along with existing cash, are expected to fund the drilling of the remaining three Shenandoah South wells (SS-4H, SS-5H, SS-6H) and flow testing of SS-2H ST1 through at least the end of fiscal year 2026.

The company's capital commitments as of June 30, 2025, are substantial, including $23.12 million for Sweetpea Petroleum licenses, $2.30 million for EP 161, $75.63 million for the Beetaloo Joint Venture, and $9.06 million for the SPCF project. A Performance Bond Facility Agreement with Macquarie Bank Limited (MQG) provides A$25.00 million for letters of credit and bank guarantees, with potential for additional facilities, crucial for supporting its midstream infrastructure development.

Outlook and Key Risks

Tamboran's outlook is firmly tied to the successful execution of its multi-phase development plan. The company anticipates commencing gas sales of up to 40 TJ per day (equivalent to 40 MMcfd) under the NT Government Gas Sales Agreement (NTGGSA) in mid-2026. The Shenandoah South Pilot Project has the potential to expand to 100 MMcfd, with existing pipeline capacity to accommodate this growth. The long-term vision includes the NTLNG project, targeting commissioning of the first LNG train in the early 2030s, which could significantly scale its export capabilities.

However, this ambitious growth trajectory is not without significant risks. The recurring operating losses, negative cash flows, and substantial cumulative net losses raise substantial doubt about Tamboran's ability to continue as a going concern. The business plan requires significant additional capital, and there is no guarantee that future funding will be available on acceptable terms, potentially leading to dilution for existing stockholders. The successful construction of critical midstream projects, including pipelines and the NTLNG terminal, is subject to delays, cost overruns, and the cooperation of third-party strategic partners.

Operational complexities, such as downhole mechanical issues experienced in the SS-2H well and casing connection stress in the SS2-4H well, highlight the inherent risks in drilling and completion activities. The volatility of natural gas prices, particularly the need for Australian and Asian prices to remain elevated relative to North America to offset higher operating costs, poses a continuous financial risk. Furthermore, community opposition, native title and heritage risks, and the stringent requirements for Scope 1 net zero emissions could lead to delays, increased costs, and reputational damage. The ongoing legal proceedings, such as the Federal Court of Australia injunction application against the Shenandoah South Pilot Project, also represent potential hurdles.

Conclusion

Tamboran Resources Corporation presents a compelling, albeit high-risk, investment thesis centered on the vast, underexploited unconventional gas potential of Australia's Beetaloo Basin. The company's strategic commitment to U.S. drilling technology, its clear three-phase development roadmap, and its proactive pursuit of net zero emissions position it as a potentially transformative player in regional and international energy markets. The recent FID on the Shenandoah South Pilot Project and the acquisition of Falcon Oil & Gas Ltd. (FO) underscore a determined push towards commercial production and acreage consolidation, aiming to capitalize on forecast gas shortfalls and increasing LNG demand.

Despite the significant operational achievements and strategic partnerships, the path to profitability is capital-intensive and fraught with risks, including substantial funding requirements, commodity price volatility, and complex regulatory and social license challenges. Investors must weigh the immense long-term growth potential against the inherent uncertainties of an early-stage energy developer. Tamboran's ability to secure consistent financing, execute its ambitious infrastructure projects on time and budget, and effectively manage its environmental and social commitments will be paramount to realizing its vision of fueling Australia's future with a net zero energy supply.