Tamboran Resources Q1 2027 Earnings Results & Report

Tamboran Resources EPS Results

• Actual EPS: -$0.3470
• Consensus EPS: -$0.16
• Beat/Miss: Missed by -$0.1870
• One Year Ago EPS: N/A
• EPS Beat Rate: 1 of last 7 quarters

Tamboran Resources Revenue Results

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

Tamboran Resources (NYSE:TBN) Limited is an independent natural gas company focused on exploring and developing unconventional gas resources in Australia’s Beetaloo Basin in the Northern Territory. Its activities include drilling and evaluating wells to assess the basin’s shale gas potential.

The company’s work is centered on the Beetaloo Basin, where it holds interests in exploration and appraisal acreage. Tamboran is working to advance potential gas resources toward development, with the aim of supplying Australian domestic markets and, subject to development and market conditions, supporting future gas exports.

Tamboran Resources is led by Managing Director and Chief Executive Officer Joel Riddle. The company’s operations are focused on upstream gas exploration and development rather than the sale of a broad range of consumer products or services.

Tamboran Resources Q1 2027 Earnings Call Transcript

Key Takeaways

• Negative Sentiment: Tamboran sold its first gas into the Northern Territory market, but quarterly sales revenue was $1.8 million at 75% of the contracted price, with volumes set by government nominations. The company expects the 40 TJ/day take-or-pay phase to begin in Q1 2027, after three additional wells are tied in to provide redundancy.
• Positive Sentiment: Early SS2 results support well deliverability: the 2H well averaged 10.2 MMcf/day over 720 hours, equivalent to 18.4 MMcf/day per 10,000 feet, while the 3H and 5H wells recorded IP30 rates of 8.8 and 10.0 MMcf/day. NSAI estimated a P50 EUR of 17 Bcf per 10,000-foot lateral, though management said it is too early to establish decline rates or publish a type curve.
• Positive Sentiment: The Sturt Plateau compression facility is complete, about $10 million under budget, and met 98% of nominations through the end of October. The SS1 three-well drilling program stayed within contingency capital, although one well required a sidetrack after a downhole issue.
• Positive Sentiment: Tamboran ended the quarter with $165 million in cash and expects a further $15 million from the Daly Waters acreage sale, subject to conditions precedent. It also drew $7 million under its debt facility during the quarter, bringing total drawings to US$37 million net to Tamboran.
• Neutral Sentiment: Strategic partnership discussions are active with credible, well-capitalized parties, and the company is considering options across joint ventures, infrastructure partnerships, and capital solutions. Tamboran gave no timeline or spending guidance, and said it has no plans to drill its wholly owned acreage in 2027.

Presentation

[Operator]

Greetings and welcome to the Tamboran Resources First Quarter Fiscal Year 2027 Earnings Results. At this time, all participants are in listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Todd Abbott, Managing Director and Chief Executive Officer. Thank you. You may begin.

[Todd Abbott, Managing Director and CEO at Tamboran Resources]

Hello, everyone, and welcome to Tamboran Resources Financial Year 2027 First Quarter Earnings Presentation. My name is Todd Abbott, and I am the Managing Director and Chief Executive Officer of Tamboran Resources. I am joined here today by Chief Financial Officer Eric Dyer and VP Investor Relations and Corporate Development Chris Morbey. I will start the call by touching on the investment highlights for Tamboran and where we are on our pathway to a critical disciplined approach to de-risking of our Beetaloo Basin development. I will then cover our quarterly highlights, recent well performance from the pilot project wells, and upstream activities across our Beetaloo Basin acreage. I will then review our strong balance sheet and close with the next development milestones before we take questions. Moving to slide two, you can see our disclaimer, which relates to forward-looking statements within the presentation, and I encourage you to review this at your convenience.

[Todd Abbott, Managing Director and CEO at Tamboran Resources]

Moving to slide three, I will start with why we believe Tamboran is a compelling investment. We are systematically de-risking one of the largest undeveloped gas projects in the world. It starts with the rocks. Results from our recent flow tests continue to support the positive performance and deliverability we have demonstrated across the Beetaloo Basin to date. I will provide more details shortly. Tamboran holds the largest acreage position in the Beetaloo Basin, with 2.8 million net prospective acres. That covers the majority of the basin's prospective area. Our acreage hosts multiple stack benches across two key depocenters, and that gives us multiple targets to delineate over the coming years. We are the basin's most experienced operator. Our team has operated in the Beetaloo Basin for over a decade and has overseen the drilling and stimulation of 11 horizontal wells, by far the most of any operator.

[Todd Abbott, Managing Director and CEO at Tamboran Resources]

We are now a production company. First gas sales commenced in September 2026, delivering on the commitment we made 12 months ago. Beetaloo Gas is now helping keep the lights on in Darwin. The pilot project has 40 TJs per day of gross volumes contracted on a take-or-pay basis to the Northern Territory Government at a fixed CPI-escalated price. That gives us a stable revenue base as we grow the resource. Our partners are bringing lessons from the U.S. shale industry to the Beetaloo. Helmerich & Payne, Liberty Energy, and Baker Hughes are all strategic partners. They bring specialized equipment and expertise to support basin development. Each of these companies is also a shareholder in Tamboran, and that alignment matters. They see the scale of the opportunity and have backed it with their own capital.

[Todd Abbott, Managing Director and CEO at Tamboran Resources]

No basin can be developed without a market, and we have access to three attractive markets, each trading at a premium to the U.S. Henry Hub price. We are committed to supporting energy security for the nation. Beyond Australia, we are well-positioned to meet growing Asia-Pacific energy demand through potential future exposure to LNG internationally. Beetaloo Gas avoids the pinch points. That gives Australia's largest trading partners certainty of supply while delivering jobs and royalties to Australians. Finally, we have a proven team. Our board and management bring deep operational and commercialization experience and a track record of unlocking large-scale shale developments. I have long-standing relationships with the board built on trust, and I am confident in our path. Moving to slide four, I want to take a step back from the quarter and outline how we see the de-risking of the Beetaloo Basin over the coming years.

[Todd Abbott, Managing Director and CEO at Tamboran Resources]

Our plan is built in four phases, and each phase is designed to de-risk the next before we commit capital at scale. The first phase, demonstrating subsurface deliverability and implementing U.S. learnings, ran from 2023 through 2026 and is what we have achieved to date. The Shenandoah South pilot project has begun providing long-term flow testing. With first gas sales now flowing into the Northern Territory market, this is generating early cash flow that supports our balance sheet. Alongside this, we are evaluating local markets for incremental production and revenue, applying lessons from the U.S. to demonstrate well deliverability, and testing local sand supply as a source of future cost reductions. The second phase, across 2027 and 2028, is focused on resource delineation and commercial pathways. Growing the resource is what underpins infrastructure build-out from the Beetaloo Basin, and we will do this through disciplined capital allocation.

[Todd Abbott, Managing Director and CEO at Tamboran Resources]

We and our key partners will focus on our core acreage in both the western and eastern depocenters. We also see potential to leverage EP 161 activity across our operated Andromeda and Maverick acreage. We are evaluating production growth incrementally into the NT and Mount Isa markets. We also anticipate greater confidence in the performance of local sand, which, if successful, could support lower long-term development cost. In parallel, we plan to progress commercial discussions on LNG gas sales and transportation agreements. The third phase, development and efficiencies, runs from 2029 into the early 2030s. Following project sanction, we will see a material growth in activity as we build production capacity and we move into continuous operations. Those continuous operations are central to bringing down costs to our targets. From the mid-2030s, the fourth phase is all about capital allocation.

[Todd Abbott, Managing Director and CEO at Tamboran Resources]

Operations will be optimized across our producing assets as we strive to become the lowest-cost producer in the basin. Each phase has clear measures of success, and I will use those to report our progress to you as we move through this plan. Moving to slide five. During the quarter, Tamboran made history by becoming the first company in the Beetaloo Basin to produce and sell gas, which is now supplying the domestic Northern Territory market. We sold 310 million cu ft of net gas to the NT government, reflecting Tamboran's net share of 24.8 million cu ft per day. Rates were limited by Northern Territory nomination and expected commissioning downtime. We generated $1.8 million from gas sales, reflecting a price at 75% of that contracted under the gas sales agreement.

[Todd Abbott, Managing Director and CEO at Tamboran Resources]

Tamboran expects to enter the take-or-pay stage of the contract and realize the full price of the contract during the first quarter of 2027. The Sturt Plateau compression facility is still in commissioning and has performed extremely well. The facility has met 98% of our nominations from the Northern Territory Government through the end of October. This gives us confidence in the plant's performance. Well results continue to confirm our prior testing. I am pleased to announce the SS2 wells are demonstrating improved deliverability and limited decline as they clean up. The next test is sustaining those rates over a longer period, and I will cover these results in more detail on slide six. We also completed the three-well drilling program on the SS1 pad. These wells will supply backfill gas to the Sturt Plateau compression facility.

[Todd Abbott, Managing Director and CEO at Tamboran Resources]

That further supports the 40 TJ per day contracted to the Northern Territory Government well into 2027, and I will cover that program on slide seven. Santos has commissioned a two-well appraisal program on EP 161 in the Beetaloo East depocenter. We hold a 25% non-operated interest with Santos as operator. They have completed the pilot hole and logged each of the Velkerri formations. Results are consistent with our expectations. Success will further de-risk our adjacent majority-owned and operated Andromeda and Maverick acreage and support infrastructure build-out on the Beetaloo East depocenter. The strategic partnership process advanced during the quarter. It is competitive, with a number of parties that will be strong and credible joint venture partners. As I have previously emphasized, the priority is the right outcome for long-term shareholder value.

[Todd Abbott, Managing Director and CEO at Tamboran Resources]

At the end of the quarter, we had $180 million in cash on hand and near-term capital inflows, including $15 million of near-term inflows related to the acreage sale to Daly Waters Energy, which remains subject to certain conditions precedent. Moving to slide six. Long-duration flow testing of wells on the SS2 pad commenced in September, delivering gas to the Northern Territory gas market. Initial rates confirm the deliverability demonstrated in prior tests. These results support our view that declines remain relatively low as wells continue to clean up. We are very excited with the initial results from the 2H well, which we believe demonstrates what these wells deliver once cleaned up. After a year shut in, the well has performed materially better than the initial 90-day flow period.

[Todd Abbott, Managing Director and CEO at Tamboran Resources]

The well was reopened with minimal water flowback and delivered an average rate of 10.2 million cu ft per day over 720 hours of interrupted production. Normalized to 10,000 ft, that 2H well achieved 18.4 million cu ft per day. That is in line with the original SS1H well, and we now have two data points showing significantly higher deliverability once a well has been cleared of stimulation water. The 3H and the 5H wells delivered average IP30 rates of 8.8 and 10.0 million cu ft per day respectively. These longer wells naturally take longer to clean up because more water was used in the stimulation program. Unlike previous IP testing, they were not soaked. They were tied straight into the Sturt Plateau compression facility after stimulation. The wells are still producing 300-500 bbl of water per day and sustaining relatively high bottom hole pressures.

[Todd Abbott, Managing Director and CEO at Tamboran Resources]

This suggests more productivity to come as the wells continue to clean up. Relative to the cleanup phase and pressure, these wells are performing consistently with prior results. Observations from our subsurface work indicates that well deliverability materially increases as water used in the stimulation program is recovered or imbibes into the formation over time. It is still early, but performance remains encouraging. Based on these initial results, Netherland, Sewell & Associates, or NSAI, has estimated a P50 EUR of 17 Bcf per 10,000-foot lateral. Finally, the SS2 5H well included 10 stages stimulated with local Beetaloo Red Sand. Early performance shows no degradation in deliverability from using local sand, and we continue to build confidence for deployment in future wells. Local sand has the potential to save around $4 million per well on a 10,000-foot lateral compared to imported sand.

[Todd Abbott, Managing Director and CEO at Tamboran Resources]

The longer-term flow rates will be the true test, but each result de-risks two key drivers of our economics: well deliverability and completion cost. Moving to slide seven. Looking at our Shenandoah South pilot project, you can see we have made significant progress across both our facilities and our upstream operations. Starting with the Sturt Plateau compression facility, construction is complete and is tracking approximately $10 million under budget. We are now fine-tuning the facility through commissioning and are targeting completion in the fourth quarter of 2026. During the first quarter of 2027, we anticipate the take-or-pay gas sales agreement with the Northern Territory Government to commence. This supports revenue of 40 TJs per day, regardless of the volume nominated. This gives us a stable revenue base to support ongoing activities to build resources across the basin.

[Todd Abbott, Managing Director and CEO at Tamboran Resources]

On the stimulation side, we completed a record campaign on the SS2 pad. The SS2, 3H, 4H, and 5H wells were zipper fracked with 178 stages across more than 30,000 stimulated feet. This included the 10 stages of local sand in the 5H well. We also completed the three-well drilling program on the SS1 pad. The SS1 4H and 6H wells were drilled with 9,329 ft and 9,505 ft of usable lateral, respectively. On the SS1 2H well, we encountered a downhole issue after drilling 12,631-foot lateral section, which required a sidetrack. That was successfully completed with a 10,000-foot usable lateral. Drilling performance across the pad was strong, but the sidetrack shows we are not yet delivering it consistently. The next measure of success is repeating our best well on every well.

[Todd Abbott, Managing Director and CEO at Tamboran Resources]

The three-well program remains within the contingency CapEx budget, given that the previous wells were drilled within the budget. Together, these results show that we can deliver facilities on time and below budget, we can execute larger completion programs, and we can manage operational issues without losing control of costs. Those are the capabilities we will need as we move into the next phase of development. Moving to slide eight, our balance sheet remains strong. We ended the quarter with $165 million in cash. A further $15 million is due from the acreage sale to Daly Waters Energy. Receipt of that amount remains subject to certain conditions precedent. Most of the cash spent during the quarter went to four areas: drilling and stimulation on the SS2 pad, drilling on the SS1 pad, drilling in the EP 161, and construction of the Sturt Plateau compression facility.

[Todd Abbott, Managing Director and CEO at Tamboran Resources]

We drew a further $7 million from the SPCF debt facility during the quarter, and that takes total drawings to US $37 million net to Tamboran. A reminder on the accounting treatment. Until we enter the take-or-pay contract, pilot project revenue and cost are capitalized to the balance sheet rather than run through the income statement. This avoids reporting volatility and means the income statement does not reflect cash movements for the period. Moving to slide nine. Over the past 12 months, we have taken FID on the Shenandoah South pilot projects, completed the acquisition of Falcon Oil & Gas. We successfully drilled and stimulated the 3H, 4H, and 5H wells on the SS2 pad. We completed the construction of the SPCF on time and under budget. We farmed out a portion of the Pilot Area and the Beetaloo Central Development Area to DWE, and we delivered first gas sales.

[Todd Abbott, Managing Director and CEO at Tamboran Resources]

Each of those steps has reduced risk. The next step is proving up the scale of the resource to support the infrastructure build-out. 2027 is about resource appraisal across the basin. We expect a material step-up in basin drilling and stimulation activity across both core depocenters. All operators are actively building the resource base needed to underpin infrastructure. Production performance from the pilot project is confirming our view of the wells, adding further confidence in the case for new infrastructure. The next measure of success is converting this activity into booked resource. Resource growth is what underpins new infrastructure. Alongside the drilling, we are progressing commercial discussions on gas sales and transportation. Those discussions are aimed at a pathway to new pipeline infrastructure connecting the Beetaloo Basin to multiple markets. As we close, I want to thank all Tamboran employees for their commitment and performance over the past year.

[Todd Abbott, Managing Director and CEO at Tamboran Resources]

We look forward to providing a further update at our next earnings call, and with that, I would like to hand it over to the operator for questions. Thank you.

[Operator]

Thank you. We will now be conducting a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two to remove yourself from the queue. For participants using speaker equipment, it may be necessary to pick up the handset before pressing the star keys. Our first question comes from the line of Scott Hanold with RBC Capital Markets. Please proceed with your question.

[Scott Hanold, Analyst at RBC Capital Markets]

Yeah, thanks a lot, guys. Congrats on those well performances. It looks pretty impressive. I mean, the 3H and 5H wells, it looks like the pressures are holding their nice declines, they're holding up. I guess my question then would be, what would be the next steps to commissioning steps to get to the take-or-pay contract? It seems like you should have confidence in the well performance now, but what are those next steps you need to pass in order to get to that full contract price?

[Todd Abbott, Managing Director and CEO at Tamboran Resources]

Yeah. Hey, Scott. How are you doing? Thanks for the question. I'll kind of two things, just to be clear, so we're not mixing terms. Commissioning, I think of that as a facility term. We're in the final stages of commissioning. We'll do a performance test on it here shortly, and the facility will be kind of fully functional at that point. But I think what you're really asking is when do we get to the take-or-pay contract. We put in the presentation, and you probably heard the remarks there, we're saying first quarter 2027. And really, the gating item on that is we want these next three wells completed and tied in, just frankly, taking a belt and suspenders approach on redundancy. This is a really important thing for the Northern Territory Government, and we want to make sure we can be kind of extremely reliable on that.

[Scott Hanold, Analyst at RBC Capital Markets]

Got it. Yeah, sorry about that. Yeah, so the commissioning on [the 200 is happening, which is obviously one of those things you need confidence, but it's really about having confidence in being able to meet the take-or-pay contract when asked, and it seems like those wells then would do that, is what I'm hearing from you. Okay, appreciate that. And then.

[Todd Abbott, Managing Director and CEO at Tamboran Resources]

Yeah, and kind of having a high level.

[Scott Hanold, Analyst at RBC Capital Markets]

I'm sorry, go ahead.

[Todd Abbott, Managing Director and CEO at Tamboran Resources]

Sorry, I didn't mean to talk over. I was just saying, we just want a high level of redundancy on that, but sorry, I talked over you. Go ahead.

[Scott Hanold, Analyst at RBC Capital Markets]

No, no, you're all right. All good. My second question is, what are the learnings and implications from the Santos well drilled? It seems like they were pretty encouraged by not only the A and B zone, but they were, it seems, particularly encouraged with the C zone. Could you talk about the implications of that and how that could advance your view of the potential on your acreage across the Beetaloo?

[Todd Abbott, Managing Director and CEO at Tamboran Resources]

Yeah, it's a good question. I think when we go through both their public data and what they've shared with us as a non-op in there, the logs are very consistent with what we expected to see there. The B shale is very strong. We do think the B shale remains the primary target there, and we also believe the C shale is very prospective, and that was kind of no surprise to us as well. Look, there's stacked pay there. There's frankly stacked pay on both sides. I don't mean to say just no surprises, but that's really what we expected to find there, so it's good to have the confirmatory data.

[Scott Hanold, Analyst at RBC Capital Markets]

Appreciate that. Thank you.

[Todd Abbott, Managing Director and CEO at Tamboran Resources]

Yeah, no worries, Scott. Take care.

[Operator]

Thank you. Our next question comes from the line of Charles Meade with Johnson Rice. You may proceed with your question.

[Charles Meade, Analyst at Johnson Rice]

Good day, Todd, to you and the whole Tamboran team there. I wanted to ask

[Todd Abbott, Managing Director and CEO at Tamboran Resources]

How are you doing, Charles?

[Charles Meade, Analyst at Johnson Rice]

I am doing all right, thank you. You offered, I want to say, maybe two sentences in your prepared remarks on the JV or the farm-out process, and I wondered if you could just go back and recap that and maybe add a little bit more color. On that color, when we look at slide nine here, you have these 12-month catalysts laid out, and roughly, they are in chronological order. The top of the list is progress strategic joint venture. Is that, I guess, an intentional signaling that that is the first thing that is going to come of these catalysts?

[Todd Abbott, Managing Director and CEO at Tamboran Resources]

Scott, you are not, I am sorry, Scott. I still got Scott on my brain. Charles, you are not disappointing me at all. It is a really fair question. Look, I will start with, we share and understand the excitement around the JV. Absolutely. I am going to pull it up just a little bit and maybe kind of state the obvious, that as the basin de-risks, interest has continued to increase in all of this. It will not surprise you that we look at a lot of different kind of options available to us, and these are not mutually exclusive. I would include the JV, infrastructure partnerships, capital solutions, and we look at all that through the lens of shareholder value.

[Todd Abbott, Managing Director and CEO at Tamboran Resources]

I will not comment on specific counterparties, and I will not comment on a timeline, but I will tell you that those conversations are active, and they are with counterparties that are credible, that have significant capital capability. They have technical expertise and/or market access. That is probably about as much as I can say about it right now, Charles.

[Charles Meade, Analyst at Johnson Rice]

Fair enough. For whatever it's worth, somebody said, "Hey, look." Someone told me, he said, "Hey, look, that's first on the list. Does that mean it comes first?" I was like, "Well, maybe." That's a good question. I want to go back to the 2H well, which is really, I think, the best technical news on the release, but it's really kind of another twist in this kind of mystery saga about what makes these wells really go. I think that you gave us a rate of 720 or 30 days of interrupted production, so that's been one of these swing wells. But it's great because it kind of gets you back to ballpark the 20 million IP from a 10,000-foot lateral, which is kind of that puts you in the kind of the A class versus U.S. onshore and conventionals.

[Charles Meade, Analyst at Johnson Rice]

What is your best guess going on? Was this well still producing water when you shut it in a year ago, and now you open it back up, and they're done? How much water? I believe this is dry formation with no formation water. I'm curious if, versus your experience in the U.S. onshore, has Tamboran been putting more water in the fracks on this formation, and that's why it's taking them to unload? I know this is speculation on our part and long-winded, but could you just talk about that?

[Todd Abbott, Managing Director and CEO at Tamboran Resources]

Yeah. I think it's consistent with the thesis that the way we've talked about the Velkerri B shale, actually all the shale there for the Velkerri. There is no formation water there, Charles, to kind of answer that question first. The water that we're pulling off of this is load water that comes through the frack. That well, we produced it for, if my memory's right, about 90 days. Over that period, it was producing, actually, Chris has some numbers pulled up there, 40-70 bbl of water a day. So yeah, a little bit of water there at the end, but we were really kind of getting to the end of that period of cleaning up.

[Todd Abbott, Managing Director and CEO at Tamboran Resources]

I think it's further evidence to say what we think is happening here is that when the water, when we're still recovering water, that impedes our ability to really connect to the reservoir. But over time, as water is either produced up or when it's shut in, as it moves off into the reservoir and away from the wellbore, and we get the well connected to the reservoir, you're able to really see what the wells can do. The exciting part about that is you can't always see that on an IP when you're still pulling water off of it. But as these wells produce over time and as these wells dry out, you should see this better connection to the reservoir and this improving performance. We think that explains these very shallow declines that we've seen over those.

[Todd Abbott, Managing Director and CEO at Tamboran Resources]

As we produce these wells, as that water continues to move away, because that dynamic happens whether we are producing or it is shut in, you get better connected to the reservoir and you are going to see better production rates. We think it is consistent, again, with the thesis that we have had out there. It is nice to have two data points now that show that type of evidence, so that we know the first was not an anomaly. We think over time, as we produce these other wells, that is what is going to buoy that decline rate, so to speak, as we get better connection to the reservoir as that water continues to come off. Because the two wells that we have prioritized, the three and 5H, are still producing quite a bit of water. One is producing 300, the other one is producing 500 bbl a day.

[Todd Abbott, Managing Director and CEO at Tamboran Resources]

That impacts what we are seeing on the reservoir and the bottom hole pressure down there. We really cannot draw everything out that we can. Those wells, we are not really seeing what they can do yet. But I agree with you, that 2H is exciting.

[Charles Meade, Analyst at Johnson Rice]

That is great color. Thank you for the comment, Scott.

[Todd Abbott, Managing Director and CEO at Tamboran Resources]

No worries. And sorry for calling you Scott.

[Charles Meade, Analyst at Johnson Rice]

No problem.

[Operator]

Thank you. Our next question comes from the line of Leo Mariani with ROTH. Please proceed with your question.

[Leo Mariani, Analyst at ROTH]

Hi. Just wanted to get a little better sense of kind of gross sales volumes. I think in your last update, you guys were talking about 25 million a day that you were able to sell. Are you still kind of really close to that number? Has that ramped up at all? Do you not expect that to ramp until these next three wells kind of come on in the first quarter? Just wanted to get a sense of kind of total volumes that you've been kind of selling here on a gross basis.

[Todd Abbott, Managing Director and CEO at Tamboran Resources]

Yeah, Leo, it really, the volumes that you'll see that we're selling is determined solely by what the Northern Territory Government nominates. We most of the time don't even have our five wells turned on. Typically, I'm looking at some of the data Chris Morbey is pulling up here, 39.4 recently. You're going to see that move around. The Northern Territory Government sets what they need from our wells based on the demand that they're forecasting there in the Northern Territory for power and whatever other system constraints they have. So, when you see that up and down, those are nominations going up and down, not the deliverability of the wells.

[Leo Mariani, Analyst at ROTH]

Okay. Appreciate that. Just wanted to also ask on, I guess, the 3H and the 5H wells, have those been producing the whole period for the most part? I guess since kind of early September when you guys established production, have those been basically the steady wells the whole time? I see you're showing just the IP30, but wasn't sure if there's sort of more history on those. I guess also, if those wells have been producing for an extended period, maybe even more than 30 days, has there been any pressure drawdown at all, or has that pressure been pretty steady?

[Todd Abbott, Managing Director and CEO at Tamboran Resources]

Yeah, so those wells came on, like, as you can imagine, when we're first bringing on the wells, we're kind of cleaning up and getting initial pressure off a lot of them. The 3H well, that IP30 started on September 13th, and the 5H well, that started on September 18th, just to give you a sense of kind of how long they've been producing. So there's more data coming through now. Yes, look, those are the two wells that we prioritized there. The most valuable part, aside from the production and cash flow that's always really important to a business, the most technically valuable part is just getting the long-term production history. So for us, we picked those two wells to prioritize over the other wells and let the other wells kind of come in and off as the nominations move.

[Todd Abbott, Managing Director and CEO at Tamboran Resources]

Those two wells we prioritized to keep online all the time so that we can generate this production history. So they've been flowing the overwhelming majority of that time. Yeah, like with any well, as you're producing them, you're going to see the pressures come down. We're still not down to the bottom hole pressure where we're really drawing on the reservoir yet. That was kind of the comment with Charles. We're still making substantial water off of those wells. So, we need to get more water off of them so we can really get down to bottom hole pressure and really see what the reservoir can do when we're connected to it.

[Leo Mariani, Analyst at ROTH]

Okay. I guess, have you, I mean, I guess you've been basically saying those wells are closer to 60 days, even though there might be some days when it was a little bit less curtailed or whatever. Have you seen any real drawdown on the rate, or has that rate been pretty steady over that roughly 60 days on these two wells?

[Todd Abbott, Managing Director and CEO at Tamboran Resources]

It is pretty steady data, is the short answer. We have kept those wells online, and it is pretty steady data.

[Leo Mariani, Analyst at ROTH]

Okay. Last one for me on your CapEx. It seems like it came in a little bit maybe hotter than I think people expected in the quarter here. Do you expect that CapEx to kind of continue at a similar run rate as you go into the fourth quarter, or do you think that number comes down?

[Todd Abbott, Managing Director and CEO at Tamboran Resources]

No. I mean, look, our capital run rate goes on our programs. It is not a continuous annual program, so cannot extrapolate a rate like that. We just finished drilling those three wells. We will mobilize the Liberty frac fleet shortly. We just stacked the rig down. So Liberty will be coming in to stimulate those wells. After that, we will have the Liberty frac fleet parked again. So that is not a continuous run rate. Without looking at what your estimates were, Leo, we were within our contingency budget on capital, so we had two wells under budget, one over budget. Fully admit that we need to be more consistent. The third well, we are on a great track, ready to get it under budget until the one issue. Overall, I think we are in a good spot.

[Leo Mariani, Analyst at ROTH]

Okay, thanks.

[Operator]

Thank you.

[Todd Abbott, Managing Director and CEO at Tamboran Resources]

Take care, Leo.

[Operator]

Our next question comes from the line of Mark Lear with Scotiabank. Please proceed with your question.

[Mark Lear, Analyst at Scotiabank]

Hey, guys. Just curious on the completions that are coming up here in the fourth quarter, just to what degree you would be using in-basin sand on those?

[Todd Abbott, Managing Director and CEO at Tamboran Resources]

Yeah. We've got 10 stages on one of those wells, just like the last program, so we'll repeat what we did there and hope to see the same performance where it pumps just like the other sand. On the data we've seen so far on the 5H well, where those stages were placed, we don't see any difference in production. We want to repeat that test, then we'll be evaluating over time when we can go to a full lateral of Beetaloo Red.

[Mark Lear, Analyst at Scotiabank]

Great. Then maybe just following up on Leo's question on capital, just kind of given what you've laid out with the non-op as well as the completions, just kind of curious ahead of any JV announcement, what the potential draw on the liquidity or on the cash would be?

[Todd Abbott, Managing Director and CEO at Tamboran Resources]

Yeah. We haven't put any guidance out on that, and really any program that we would do would be shaped alongside us with our JV partner, so we're going to hold back on that one.

[Mark Lear, Analyst at Scotiabank]

Okay, great. Well, thank you.

[Todd Abbott, Managing Director and CEO at Tamboran Resources]

Yep, no worries. Take care.

[Operator]

Thank you. Our next question comes from the line of Paul Diamond with Citi. Please proceed with your question.

[Paul Diamond, Analyst at Citi]

Thank you. Good morning, or good evening, or morning, I'm not sure, taking the call. You talked a bit about better than expected decline rates. I guess, can you put any clarity around, I guess, the target? Like, where do you want to see that, once we get well more than 60 days of data? I guess, as the numbers now, is it a reasonable expectation to extrapolate that out, or is timing on that, or when we can expect to see a bit more detail there?

[Todd Abbott, Managing Director and CEO at Tamboran Resources]

It's a good question, Paul. We really, with the data we have on these wells right now, we haven't seen a decline yet, so it's really hard to look at it and make an estimate on it. You'd kind of be guessing at this point. When discussing the performance of the wells and how they're reacting to being cleaning up, the 2H being the kind of the recent example of this, it's hard to say on a longer lateral, given the longer time to clean up, how long that flat decline is going to be. We've had IP90s before where we even saw a little rise in the tail end of that test. I think it's one of the key learnings that we're all waiting to see demonstrated in this longer-term production test. But right now, we just haven't seen really anything that lets us estimate a decline.

[Paul Diamond, Analyst at Citi]

Got it. Understood. Then, on the three-well SS1 program, as you are talking about stimulation in 4Q, I guess, can you talk about the, those are expectation would be flowing early in the year. I guess, more particular on the wells with the multi-pad development or multi-well per pad, can you talk about any like spacing assumptions or lessons learned you have had there? Again, is that extrapolatable data, I guess, across the wider area?

[Todd Abbott, Managing Director and CEO at Tamboran Resources]

Yeah. We really have not gone into spacing tests. That does not mean all the wells are at the exact same spacing, but we do not have designed spacing tests. I will tell you, like most of those are 500 meters per well. There are some a little bit closer than that, Paul. When we go back and see those both on flowing tests and on shut-in tests, we are not seeing any communication at those spacing levels. There will be a point where we come back and say, later in development where we get maybe a finer approach to that to say, "Let us do our microseismic, let us do our spacing test and figure out exactly what that optimal spacing is yet." But we are just not there yet.

[Paul Diamond, Analyst at Citi]

Understood. Appreciate the clarity on there.

[Operator]

Thank you. Our next question comes from the line of Adam Martin with E&P. Please proceed with your question.

[Adam Martin, Analyst at E&P]

Yeah. Hi, Todd, Eric, Chris. I suppose first question just around pipelines. We have obviously got APA spending capital and time looking at large-scale formats, but Jemena has also come out recently and talking about this smaller pipeline down in the domestic market. Is that something that you are going to try and target with your acreage? Perhaps you could just talk about that, because I think in your slide you talked about wanting to get more gas into the NT domestic market as well. So perhaps just talk to how you are going to do that, please.

[Todd Abbott, Managing Director and CEO at Tamboran Resources]

Yeah. That is a really good question. Yes, Jemena did announce that not too long ago, the pipeline to go down south to tie into the NGP. It fits really well with our eastern acreage. So, yeah, there are conversations that are ongoing here, no surprise at all. That is something we are highly interested in. We think that is a nice way to get gas sales kicked off faster in the east without waiting on larger scale infrastructure. It goes right into the Mount Isa market, which is a premium market. So there is a lot to like about it. What I really like about it is it gets us, because it gets us intermediate cash flows, it just gives us more cash flow runway and requires less equity financing. So it is an improvement to dilution.

[Adam Martin, Analyst at E&P]

No, thank you. That makes a lot of sense. Just second question back on the farm out. It feels like the basin has got the potential and might just split up into the west and the east. West maybe going more north, eventually for whether it is [Ranikavus] or other infrastructure up in Darwin, or you have also got options on LNG sites as well. But over in the east, obviously with Santos' acreage, they are obviously looking to try and send, if they are successful, send that gas east eventually. There is a lot of LNG infrastructure around Gladstone that is starting to look like it is running out of gas. I am wondering on the farm out, are you looking at some of those blocks around that EP 161 position, whether you could bring in some of these other companies?

[Adam Martin, Analyst at E&P]

Is that something you are actively considering, or is it more you are focused on just doing the Orion Block?

[Todd Abbott, Managing Director and CEO at Tamboran Resources]

No, I would say the conversations are wide-ranging. You can imagine the people that we talk to, they have their own strategic interests as well, and then there are some that fit naturally both directions, so to speak. This is not something where it's a farm out where we say, "This is the deal and this is what we're going to do." These are bespoke conversations with companies, and we kind of draw out the Venn diagram of our strategy and their strategy and see where the deal space exists. So no surprise, there's options including both areas, one or the other area. But again, we'll go back and we'll view all this kind of through that shareholder value lens and make the right long-term decision on it.

[Adam Martin, Analyst at E&P]

Okay. That sounds great, Todd. Thank you very much.

[Todd Abbott, Managing Director and CEO at Tamboran Resources]

Yeah, no worries.

[Operator]

Thank you. Our next question comes from the line of Anish Kapadia with Hannam. Please proceed with your question.

[Anish Kapadia, Analyst at Hannam]

Hi, Todd. I wanted to ask you about some of your wholly owned acreage. I was just wondering, are you planning any drilling on any of that 100% owned acreage during 2027? Is it to do with capital allocation? Is it prospect maturity, or is it waiting for a strategic partner to come in?

[Todd Abbott, Managing Director and CEO at Tamboran Resources]

Yeah. We have no requirements to drill that acreage in 2027. The Santos activity in that area will certainly provide some insight. There will be a time where we come back. We will eventually have some commitment wells that we will go and drill, but no activity planned in 2027, Anish.

[Anish Kapadia, Analyst at Hannam]

Okay. Just one other question. You've had a 17 Bcf EUR estimate for some time. I think NSAI has, in your report, is confirming that 17 Bcf estimate. Can you just provide some color on the type curve underpinning that estimate, and kind of the assumed initial production rates, decline rates? Do you see that as kind of fully supported by the production data you've collected so far?

[Todd Abbott, Managing Director and CEO at Tamboran Resources]

Yeah. I would say it's yes. We have done some work with NSAI recently and obviously addressed that in the remarks. It's too early for us to put out a decline curve right now. I could draw a dozen of them for you that are all plausible with similar EURs. The way our team approaches that is they'll run a bunch of different scenarios, but they all center around that 17 Bcf. We're not at the point where we're ready to put out a type curve.

[Anish Kapadia, Analyst at Hannam]

Okay. No problem. Thank you.

[Todd Abbott, Managing Director and CEO at Tamboran Resources]

Yeah, thank you.

[Operator]

We have reached the end of the question and answer session. I would like to turn the floor back to Todd Abbott for closing remarks.

[Todd Abbott, Managing Director and CEO at Tamboran Resources]

As always, thank you for the insightful questions. It has been a really good quarter for Tamboran. We are excited about the production results. As we talked about a couple times, we are progressing our JV conversations, and again, understand the excitement around that. Thank you for the time, thank you for the interest in the company, and hope to speak with each of you soon.

[Operator]

Thank you. This concludes today's conference, and we thank you for your participation.

Participants

Executives

• Todd Abbott, Managing Director and CEO

Analysts

• Scott Hanold, Analyst at RBC Capital Markets
• Charles Meade, Analyst at Johnson Rice
• Leo Mariani, Analyst at ROTH
• Mark Lear, Analyst at Scotiabank
• Paul Diamond, Analyst at Citi
• Adam Martin, Analyst at E&P
• Anish Kapadia, Analyst at Hannam