Tamboran Resources (NYSE:TBN) released third-quarter financial results and hosted an earnings call on Wednesday. Read the complete transcript below.

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The full earnings call is available at https://ir.tamboran.com/webcast-registration?event_id=10435

Summary

Tamboran Resources Corporation announced a significant farm-out transaction with Daily Waters Energy, involving 10,000 acres in the Beetaloo Basin, enhancing asset valuation and financial position.

The company progressed its strategy towards first gas production in the Beetaloo Basin, with the Stur Plateau compression facility nearing completion and first gas sales expected in the third quarter of 2026.

Tamboran raised $198 million through a public offer, significantly bolstering its financial flexibility with a pro forma cash position of $298 million.

Operational highlights include preparations for well stimulation in the Northern Territory and collaboration with Santos on the EP161 acreage for upcoming drilling activities.

Management emphasized the strategic importance of energy security in light of global geopolitical tensions, reinforcing the potential of the Beetaloo Basin as a significant gas resource.

Full Transcript

OPERATOR

Greetings. Welcome to Tamboran Resources third quarter financial year 2026 earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star-zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to Todd Abbott, Chief Executive Officer.

Thank you. You may begin.

Todd Abbott, Chief Executive Officer

Hello everyone and welcome to Tamboran Resources financial year 2026 third quarter earnings presentation. My name is Todd Abbott and I'm the Chief Executive Officer of Tamboran Resources. I'm joined here today by Chief Financial Officer Eric Dyer and Vice President Investor Relations and Corporate Development Chris Morbey. I'm going to take a different approach to our earnings call from now on and rather than go through each slide individually, I'm going to speak to key highlights, operational updates, upcoming catalysts and then move straight to the Q and A and the remainder of the presentation is going to be here for your information.

Moving to slide two, you can see our disclaimer which relates to forward-looking statements within the presentation and I encourage you to review that at your convenience. Slide 3, the March 2026 quarter was eventful for Tamboran and we saw several major steps forward as we continue to execute our Beetaloo Basin strategy and progress towards first production from the pilot area. In the third quarter of this calendar year, we announced a significant transaction with our Beetaloo Basin partners, Daily Waters Energy, to farm out approximately 10,000 acres across the pilot area and Beetaloo Central Development Area for a stage carry of up to 28.5 million US. This transaction was conducted on very similar economic terms to the farming agreement between Daily Waters Energy and INPEX, and the INPEX and Daily Waters transaction has placed a significant data point for high-quality core Beetaloo Basin acreage which mirrors our farm-out acreage across the lease line in the Orion Block and it also represents a significant step up from where Tamboran is currently trading. On completion of the transaction with Daily Waters Energy, we will hold a 44.375% interest in the pilot area and 10% interest in the Daily Waters Energy acreage.

We continue to progress our joint venture on the Orion Block north of the pilot area and a lot has changed since our last call. The INPEX transaction has re-rated the basin and our follow-on deal with Daily Waters Energy has provided a carry to our near-term capital program. Those are two of the most important advantages of any farm-out and I want to be clear we continue to believe a joint venture with a strategic partner is important and these discussions are continuing.

The upward movement in asset valuation markers, progress in de-risking the Beetaloo, first gas sales coming closer, strong interest in the Australian natural gas assets, and a number of additional tailwinds put us in a strong position. The ongoing events in the Middle East have also amplified the importance of energy security and highlight the value of the Beetaloo as a large, low in-situ CO2 gas resource in the Asia Pacific region. That, along with the entry of INPEX, a sophisticated and very credible international gas company, have significantly increased attention on the basin.

Given that some of these companies are well advanced in their understanding of the asset and some are just now engaging in their process, it's very difficult to predict the timing, but with our recent capital raise, we have financial flexibility to focus on the right partnership and the appropriate value while continuing to de-risk asset development activities for the pilot project. Progressed throughout the quarter despite the challenging weather conditions.

Construction on the Stur Plateau compression facility was 88% complete at the end of April with strong progress made on the installation of electrical instrumentation controls and piping and importantly, we remain within the P50 budget and schedule forecast for the project with first gas on track for the third quarter of this calendar year. The APA-owned pipeline connecting the facility to the Northern Territory Gas Network is undergoing final commissioning ahead of tie-in to the SPCF and full credit goes to the Tamboran Operations team and contractors for the safe execution of the project.

The remaining three wells required to deliver initial gas sales of approximately 40 million cubic feet per day gross to the Northern Territory Government under the long-term CPI Escalated Gas contract are being prepared for stimulation in the coming weeks. The program is expected to include a total of 180 stages across 30,000 feet of stimulated length. Simulation will be undertaken by the Liberty Energy fleet with the SS4H and 5H wells to be zipper fracked.

We're also planning on testing multiple stages with local sand from the Beetaloo Basin during the campaign which if successful will be a major driver of our cost reduction strategy. This could reduce stimulation costs by 4 million US on future wells assuming 60 stage 10,000 foot horizontals. The operations team is also preparing for the two-well program on the SS1 pad approximately three miles south of the SPCF that's planned to commence in mid-2026.

The two commitment wells with Daily Waters will be tied into the SPCF infrastructure during the second half of the calendar year and we're also participating in two wells with our partner Santos in the EP161 acreage in the Beetaloo East Depot center where we hold a 25% non-operating interest. Santos is currently upgrading the Ensign 971 rig ahead of drilling activities scheduled to commence in the third quarter of this calendar year. The two wells are each planned to be simulated with 60 stages across 10,000 feet and flow tested for up to 30 days.

We are very excited to participate with Santos on progressing the development opportunity and look forward to continuing this partnership to unlock value of the Beetaloo East Depot center acreage. Since our last call, we significantly strengthened our balance sheet, raising 198 million US via an underwritten public offer and an institutional and retail entitlement offer. This was on top of the US 32 million received in the pipe transaction in January of this year.

The funds from the raises solidify the balance sheet and provide us significant financial flexibility. At the end of the quarter, Tamboran had a US 95 million in cash and US 39 million in undrawn debt net to Tamboran for funding of the SPCF. The pro forma cash position following the recent equity raise increases our cash liquidity to US 298 million which includes the 188 million raised net of fees and the US 15 million we expect to receive from Daily Waters relating to the acreage sale of May 25, which remains subject to certain conditions, precedent and finally, just a quick update on the Falcon transaction.

We received approval from both Tamboran and Falcon shareholders to progress the acquisition of Falcon subsidiaries and approval from the Supreme Court of British Columbia with respect to certain amendments of the Plan of Arrangement. We expect this transaction to conclude imminently as we have now received the remaining regulatory approvals to consummate the deal, including those related to OFAC licensing subject to finalizing mechanics for the delivery of the Tamboran shares to eligible Falcon shareholders.

The transaction is anticipated to close by the end of the month and moving to slide 4. As you can see, we have a number of significant catalysts to deliver in 2026, the most significant being the delivery of first gas sales from the Beetaloo Basin in the third quarter of this calendar year. Initial gas sales from the pilot project deliver royalties to the Northern Territory government and native title holders. Tamboran already employs a significant local workforce and we anticipate this will continue to grow as activity levels increase over the coming years.

And importantly, these gas sales enable us to deliver the first long-term production data seen in the Basin. That's an important milestone for Tamboran, the Beetaloo Basin and the Northern Territory, reinforcing the basin's potential to deliver long-term economic benefits for all stakeholders. The 2026 Beetaloo Basin Program represents a key inflection point with Tamboran planning to participate in the stimulation of five wells and then drilling the four wells across the basin.

We look forward to providing further update on our activities at our earnings call in September. And with that, I will hand it over to the operator for questions. Thanks.

OPERATOR

Thank you. 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 if you would like to remove your question from the queue. And for participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question is from Scott Hanold with RBC Capital Markets. Please proceed.

Scott Hanold, RBC Capital Markets

Yeah, thanks. Good morning. Good afternoon. You know, that deal that INPEX had with Daily Waters certainly was a vote of confidence and validation of what's going on in the Beetaloo. It feels like there's a lot of momentum picking up, especially as you cited the ongoing issues in the Middle East. And can you just give a general idea of how has that framed your thoughts about the short, medium and long-term kind of progression of the Beetaloo and where as you start thinking about phase one, phase two, just give us a sense of what that means for pricing on some of those potential contracts and outlets, whether it's backfill, LNG or anything else.

Yeah, no thanks, Scott. Yeah, just kind of reiterating a little bit from the remarks there. When you look at what's going on kind of overseas conflicts in the Middle East, it has certainly amplified the focus on energy security. And we hear that loud and clear from the people that we talk to. And the way I describe it is like, look, you know, it would be wonderful if that conflict was resolved today. And even if it is, that new awareness of the importance of energy security isn't going away.

So it certainly focuses puts a sharp focus on an asset like the Beetaloo that's a large gas resource, you know, in a jurisdiction like Australia, in the neighborhood of the Asia Pacific, has a very low in situ CO2. There's just a lot of things that make it really important. So we hear that rhetoric loud and clear. When I think about kind of short, medium, long term, I'll kind of give you a sense of how I see the play evolving. I can't comment on pricing.

You know, there are active discussions on there. So I can't get into that. But look, in the near term we're focused on that delivery to the Northern Territory. That's the 40 million a day. You know, that's a CPI escalated price but it is confidential in the term so we can't disclose that either unfortunately. But that will go, we'll take that off in the third quarter of this year. There are opportunities to expand our throughput through there. I would call that the medium term.

That pipeline is capable of 100 million a day. We can twin the compressor there and move an additional 50 million a day through a second compressor. So total of 100. That incremental gas could go some to Darwin, you know, some could go north to you know, INPEX following the daily waters and INPEX deal. Some could go to other manufacturing and mining operations in the area. An important thing to understand about all that is that our gas and the daily waters gas is jointly marketed by agreement.

So we're all aligned on moving that longer term. Now we're talking about large format pipelines, you know, north and east. Those pipelines are commercial. Those pipelines, you know, I think we're all confident those will happen. The timing is yet to be defined on it but they are commercial. And an asset of this scale needs multiple outlets. Hope that answers your question.

Todd Abbott, Chief Executive Officer

Yeah, no, I appreciate all that context. Obviously there's a lot going on so I appreciate any kind of color there. My follow up question was going to be on the cost savings. I want to delve in a little bit more. You talked about obviously the, you know, testing some of the local sand. Can, you know, obviously you've been here now a few months. Can you give a sense of what other opportunities do you see to lower cost and you know, as you look into next year, what is the hope to get, you know well cost down to.

Scott Hanold, RBC Capital Markets

Yeah, I would. So first I'll thank you for bringing up the local sand. We'll have 10 stages put in on the upcoming completion program on local sand and we'll have tracers and all that so we can see the relative contribution. Just to kind of confirm that works. We like what we're seeing in the lab data so we're very optimistic there. Assuming that works, that's a US 4 million kind of savings on each completion. You know that's a, that's a 10,000 foot 60 stage well, so good movement there.

When we think about other stuff on the drilling side you're thinking about moving into things like oil based mud, synthetic oil based mud. We're using water based mud right now. But as we get waste disposal facilities in the basin that can handle oil based cuttings that will, that will help, that will increase our rope, that will shorten our drill times. There are certainly other optimizations there to make, Scott, but really until we're kind of up at pace with a full time program, we're not going to see everything that you would see kind of in a more mature US Shale basin.

That's just not the stage we're at right now.

Todd Abbott, Chief Executive Officer

Yeah. Do you have a sense of where you think costs could be by next year?

Scott Hanold, RBC Capital Markets

No, next year is going to be a little bit hard to say because we're drilling a limited number of wells. We have the two wells we'll drill total of four wells next year. So that's going to include kind of some of the same bringing the rig on, taking the rig back a little bit of the stop and start. So you're not going to be at full efficiency there. But you know, going forward, as we get more wells and a more sustainable program, that's when you're really going to start seeing the lower cost.

Todd Abbott, Chief Executive Officer

Okay, understood.

OPERATOR

Our next question is from Charles Mead with Johnson Rice. Please proceed.

Charles Mead, Johnson Rice

Yes, Todd, good day to you and the rest of your team there. I wanted to go back to your. Thank you. Your prepared remarks and I appreciate that was great color on the close of the Falcon and I want to ask a question about that and the timing of the farm out. It makes sense to me that your farm out you'd wait to close the Falcon deal before you finalize the farm out. But it looks like you're sliding, you know, now you're expecting Falcon close in the month of May if I heard you correctly.

But it looks like you're kind of sliding the farm out more to back half of 26. And you know, is that the right read on the sequence here and what implications does that have for the competition in that deal or the people are going to be worried you slide it? It seems like it's not. I should put a risk of this not happening, but perhaps it's because there's more people who are in the data room who weren't involved before.

Todd Abbott, Chief Executive Officer

Yeah. And that last part is the really current read, Charles. Yeah, look, the Falcon deal, exciting news. So it's good to have that kind of near the end. We've got Rowan on the line. He can answer any detailed questions that you have there. But that's been a lot of work by the team in a very complex deal and kind of be here where we see light at the end of the tunnel is exciting. Look, that was certainly a question in the farm out process, you know, by other potential partners.

You know, they want to know what the status of that is and certainly wanted confidence that that was going to close. So it answers a question, you know, but, but there's more to it than that. There's more complexity to it. So a lot of things have happened since we've announced that farm out process. We talked about all the stuff in the Middle East and we don't have to rehash that. The INPEX daily waters deal has been important and our tag into it that is re-rated the basin.

It has brought in a very credible third party that's not only sophisticated but very well informed. So that adds a lot of enthusiasm and a lot of confidence to the people that are interested in this type of asset. So we are seeing renewed conversations and additional conversations and following the capital raise, we have a lot of financial flexibility and the ability to be patient on this. And my focus is less about getting a quick timing. I understand how it can be kind of read in the market, but my focus is not on timing.

My focus is on getting the right partner at the right value for us and giving some of these other parties time to get up to speed and understand the asset gives us the best position to do that. So I understand it can be frustrating that the answer isn't quite there yet, but we're being very thoughtful and we're really confident about the position we're in right now.

Charles Mead, Johnson Rice

That is a great insight on your thinking and your process. Thank you for that. And then as a follow up, this is about the two wells you're going to drill with Santos. You know, this is another, it looks like, you know, these two wells are going to be in another deep part of the basin, you know, but it's, but it's a different operator. And so I'm curious if you can talk about how perhaps how Santos is approaching, is approaching, you know, the drilling and completion of these wells differently. I mean, they have a different rig, they have an ancient rig. I think in your, on your slide 8 it says they're going to flow test the wells for 12 months. And maybe that's because they're going to, or maybe they're going to tie into those pipelines as part of the flow test.

But can you just talk about how they're approaching differently and if there's any cross pollination between your team and their team and you know, anything that might come of that.

Todd Abbott, Chief Executive Officer

So I'll step back a little bit. And the 161 acreage is really good acreage. Right. There's potential four benches there. It's something we're very excited about. Santos is going to drill the two 10,000 foot wells. They've got, you know, kind of a full modern completion, a little bit different than the last wells. It's going to have larger casing which will give them better kind of a better completion job, a better frac job on it. So we're optimistic about the results of the wells. The duration of the flow test, frankly, hasn't been finalized yet. You know, I could tell you how kind of we would do it if we're operating it. We're not operating at Santos is. So that's going to be a discussion between the two companies. But that hasn't been set yet. So I'd kind of be talking out of school if I told you kind of where I think that was going to land. Exactly.

Charles Mead, Johnson Rice

Got it. Thank you.

OPERATOR

Our next question is from Paul Diamond with Citi. Please proceed.

Paul Diamond, Citi

Thank you. Good morning all. Thanks for taking the call. Just a quick one for me. So we seem to be in a bit of a catalyst heady environment. If you kind of look through this a bit, talk about post all of this, like once, you know, pilot phase is up and running, what is, I guess what does the next operational stage look like? Is that, you know, Operation Kitty phase two?

Todd Abbott, Chief Executive Officer

Paul, I'm sorry, I'm having a hard time hearing you. Could you move a little bit closer to the phone maybe?

Paul Diamond, Citi

Oh, sure. Hang on one sec. Better?

Todd Abbott, Chief Executive Officer

Yeah, much better, thank you.

Paul Diamond, Citi

Okay. Sorry about that. No, I was asking about. We're in a catalyst. Can you also hear me?

Todd Abbott, Chief Executive Officer

Yes. Gotcha.

Paul Diamond, Citi

Okay. Sorry. No, I mean we're in a catalyst heavy environment, but can you kind of look through this a bit? Is the, this is a laid out strategy as we kind of the best path we know, is it on the phase to ramp that up with the work over or ramp it up with the farming wrap up phase two, be a day or do you see, I mean, is there any like long term supply deals, you know, adjacent to that or further M and A or I guess how do you see the structure beyond you kind of full ramp of phase one.

Todd Abbott, Chief Executive Officer

Okay, sorry, I think I called most of that, Paul, but if I don't answer your question exactly like steer me on it, I think you're asking about kind of mid and longer term strategy for the asset, Is that right?

Paul Diamond, Citi

Yes, exactly. Yeah. So yeah, I mean near term, I think we've talked through the near term strategy pretty well. So, you know, most people understand that the key piece of data in the near term strategy-wise that we're all looking for is the long-term production data. Right. So once we get that, it clarifies a lot of things for a lot of people. Longer term, de-risking the Orion asset and defining resource is important. Same in the Eastern Depot center along with Santos.

And our 136 acreage defining resource is going to be really important for attracting those large diameter pipelines that we need for the basin. So that's kind of the intermediate phase. As those come in, then you're in a mode where once you get clarity on in-service dates for both of those pipelines, that's ramping up kind of the larger scale drilling program to build volumes into those pipelines. And I think that's the moment that we're all getting.

That's where we get all excited about it. Right, because that's when you have full-time drilling programs, you know, probably multiple rigs and you're building into something pretty aggressively. So our focus in the near term is on the production test and the production data and the deliveries to Darwin. Next is de-risking resource to FID pipelines and then third, it's developing the resource into those pipelines. Did I get your question right? Did I hear it right?

Scott Hanold, RBC Capital Markets

Yeah, you did. Sorry, the connection must be on my end. But yeah, that answers. No, no, that's it for me. Appreciate your time. I'll leave it there.

Paul Diamond, Citi

All right, thanks Paul.

OPERATOR

Our final question is from Aneesh Capita with Hammond. Please proceed.

Aneesh Capita (Equity Analyst)

Hi Todd, just the first question on. Yeah, first question on NT LNG. I was just wondering if you had any updates on that and whether given the current environment and the increased, I suppose the increased appetite for local projects from Asia, given the Middle East outage, if there's any kind of push to accelerate the NT LNG project at the moment.

Todd Abbott, Chief Executive Officer

Yeah, thanks for the question. As you know, we've done the pre-feed studies there and we've defined the opportunity there at Middle Arm for NT LNG that comes up in many of the conversations that we have and it kind of just depends on the partner and the partner's capability, their interest level and something like that. It's certainly a credible option that's out there and certainly becomes part of those discussions. In the near term though, we don't intend to allocate capital towards that to progress kind of, for instance, a full feed or to start material work until we understand exactly who that joint venture partner is and what their needs are. So that's kind of the staging on that is first establish who that joint venture partner is and then two, let's look together and what role does NT LNG play in our joint strategy?

Aneesh Capita (Equity Analyst)

Okay, great. And then just one second one. I suppose there's several players in the basin now. There's several partnerships in the basin. I was just wondering really how much of a competition is there to get gas to market over the coming years? And kind of within that context, how are you thinking about your 100% owned acreage?

Todd Abbott, Chief Executive Officer

Yeah, I'll kind of take those separately. So and let's talk about it near term and long term on the marketing side. So near term if you look at the western acreage where we're partnered with Daily Waters, that's where our pilot activity is. That's where the SDCF is. That's where we'll be flowing gas third quarter with the infrastructure there is limited to about 100 million a day. And if we twin that compressor we can get to the hundred million a day.

But at that point you're kind of plateaued until you get a larger format pipeline there. There are multiple outlets for that gas over there. You know the first gas will go to domestic use to Darwin and we think there's an opportunity to push those rates up a little bit. Then we have other domestic markets like manufacturing, mining in the area that we can move gas to. And then the last is because of the impacts deal with Daily Waters. There's likely some opportunities to move gas to Ichthys from there.

But in total we're going to be limited to 100 million a day. And as I mentioned earlier this is an important point. The gas like our agreements with Daily Waters all require that we joint market our gas. So all of it moves together. We're fully aligned on making all that work. Over on the eastern side on the non-operated piece with Santos and 161 and then our acreage around it with Block 136 and the Checker 10, there's less infrastructure there so there are less options to move that gas.

Currently it's going to take some work. Kind of following up on the prior question about, you know, what is the, what is going to be the production test plan for 161. There's just less infrastructure there right now. So that's a little bit of a longer term problem for both sides of the base and both depot centers. We do need the longer term large format pipelines and a little bit different than pipelines in the US. These pipelines are built with the idea of common access so there won't be one party that just monopolizes a pipeline.

That's not really how it's going to work here. We'll all work together and the goal of the companies is to be efficient in capital so that we can get a pipeline each direction of the right size to utilize the capital and spread that cost out over the large volume. So feel good about both situations. Near term is good, especially where we're producing and longer term, just the way the pipeline regulations work here in Australia we're in a good spot.

Oh, sorry. You also asked about our intent with the other acreage. I would say our near term focus is first on the pilot area where we're drilling development wells, wells that would go to production. Also 1, 6 well I'll put 161 and Orion together. Those are areas where we're de-risking resource. So those kind of three areas are our primary focus. I could also add the BCDA area, the Daily Waters operated stuff to the south of the pilot. We'll be participating in wells there as they move forward with their INPEX work program.

Beyond that, the other positions out there certainly perspective they're a little bit longer term though. Our goal is to use kind of those core areas that I mentioned to FID to pipelines.

Aneesh Capita (Equity Analyst)

Thanks, that's very clear.

Todd Abbott, Chief Executive Officer

Yeah, no, thanks.

OPERATOR

There are no further questions at this time. I would like to turn the floor back over to Todd for closing remarks.

Todd Abbott, Chief Executive Officer

First, I appreciate the questions and I appreciate the engagement. I just wanted to send some comments out to the team. The team has done amazing work this quarter. It's been a busy quarter for us, lots of transactions there and now we're pivoting to the operations. And while I think the investment community is anxiously awaiting all those operations, I can tell you our operations team has not taken a break. They've been working this the entire time.

So thanks to the team at Tamboran and thanks for the support of our investor community through the capital raise and on the call.

OPERATOR

Thank you. This will conclude today's conference. You may disconnect at this time and thank you for your participation.

Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company's SEC filings and official press releases. Corporate participants' and analysts' statements reflect their views as of the date of this call and are subject to change without notice.