Tamboran Resources NYSE: TBN began selling gas from its Beetaloo Basin pilot project in September, generating $1.8 million in sales during its fiscal first quarter as it works toward full pricing under a contract with the Northern Territory Government.
Managing Director and CEO Todd Abbott said on the earnings call that the company expects to enter the contract’s take-or-pay stage in the first quarter of calendar 2027. The agreement covers 40 terajoules per day of gross gas volumes at a fixed, inflation-adjusted price. Until the take-or-pay stage begins, gas sales are being priced at 75% of the contracted rate.
Tamboran sold 310 million cubic feet of net gas during the quarter. Abbott said volumes were limited by the government’s nominations and expected commissioning downtime at the Sturt Plateau compression facility. The facility met 98% of government nominations through the end of October, he said.
Additional wells needed for contract reliability
Construction of the compression facility is complete and tracking about $10 million under budget, according to Abbott. Tamboran is targeting completion of commissioning in the fourth quarter of 2026, with a performance test still to come.
During the question-and-answer session, Abbott distinguished facility commissioning from the steps needed to enter the take-or-pay stage. He said the company wants three additional wells completed and connected first to provide 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,” Abbott said.
Tamboran has completed drilling the three wells on the SS1 pad and plans to bring in Liberty Energy’s fracturing equipment to stimulate them. A downhole issue on the SS1 2H well required a sidetrack, but Abbott said the three-well program remained within its contingency capital budget.
Early well results and local sand test
Abbott said initial production from the SS2 pad supported the company’s assessment of well deliverability, while cautioning that longer-term performance remained to be established.
The SS2 2H well, reopened after being shut in for a year, produced an average of 10.2 million cubic feet per day over 720 hours of interrupted production. Adjusted to a 10,000-foot lateral, that equated to 18.4 million cubic feet per day, he said.
The SS2 3H and 5H wells recorded average 30-day initial production rates of 8.8 million and 10.0 million cubic feet per day, respectively. Abbott said those wells had been prioritized for continuous production to build a longer performance history, and their rates had been relatively steady.
He attributed the limited observed declines in part to stimulation water being recovered or moving away from the wellbore, improving the wells’ connection to the reservoir. The 3H and 5H wells were still producing substantial volumes of water, he said.
“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,” Abbott said in response to an analyst’s question.
Based on the initial results, Netherland, Sewell & Associates estimated a P50 estimated ultimate recovery of 17 billion cubic feet per 10,000-foot lateral. Abbott said Tamboran was not yet ready to publish a production type curve.
The 5H well also included 10 stages stimulated with local Beetaloo Red Sand. Abbott said early data showed no degradation in deliverability, and the company plans a similar test on one of the upcoming SS1 wells. Local sand could save about $4 million per well on a 10,000-foot lateral compared with imported sand, he said.
Partnership talks and funding
Tamboran ended the quarter with $165 million in cash and expects another $15 million from an acreage sale to Daly Waters Energy, subject to conditions. The company also drew another $7 million from its compression-facility debt facility during the quarter, bringing total drawings net to Tamboran to US$37 million.
Abbott said pilot project revenue and costs are being capitalized to the balance sheet until the take-or-pay contract begins, rather than flowing through the income statement.
The company is pursuing a strategic partnership as it plans further resource appraisal across the basin. Abbott described discussions as active with credible counterparties that have capital, technical expertise or market access, but declined to provide a timeline or identify potential partners. Options under consideration include a joint venture, infrastructure partnerships and capital solutions.
Tamboran also holds a 25% non-operated interest in Santos-operated EP 161, where a two-well appraisal program is underway. Abbott said pilot-hole logs were consistent with expectations and could help inform the outlook for Tamboran’s nearby acreage. The company has no drilling planned on its wholly owned acreage in 2027, he said.
About Tamboran Resources (NYSE:TBN)
Tamboran Resources 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.
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