Introduction & Market Context
Tamboran Resources Corp (NYSE:TBN), an Australian natural gas developer focused on the Beetaloo Basin in Australia’s Northern Territory, presented its Q2 FY25 results on February 12, 2025, highlighting operational progress toward first gas production targeted for the first half of 2026.
The company, which holds approximately 1.9 million net acres in the Beetaloo Basin—a position comparable to major U.S. independent gas producers—is advancing its Shenandoah South (SS) Pilot Project while simultaneously pursuing strategic partnerships to enhance its development timeline and market opportunities.
Quarterly Performance Highlights
Tamboran achieved several significant milestones during the quarter, including the successful drilling, casing, and cementing of the SS-3H well with a 10,000-foot horizontal section. The company also completed the SS-2H ST1 well across 35 stages, delivering record proppant intensity for the basin.
On the strategic front, Tamboran entered binding agreements with APA Group (ASX:APA) for the construction, ownership, and operation of a 12-inch Sturt Plateau Pipeline, a critical component for the proposed SS Pilot Project, with first gas remaining on track for the first half of 2026.
The quarter’s achievements were summarized in the company’s presentation:
Operational Progress
Tamboran demonstrated significant improvement in drilling efficiency with the SS-3H well, which was completed in just 25 days at an average drilling speed of 843 feet per day—43% faster than the SS-2H well. This efficiency gain contributed to a total drilling cost of US$10.3 million (A$16.6 million) for the SS-3H well.
The company’s drilling performance has shown consistent improvement across its well program, as illustrated in the following comparison:
The SS-2H ST1 well was successfully completed across 35 stages over a 5,483-foot horizontal section, with an average proppant intensity of approximately 2,710 lb/ft—26% higher than the SS-1H well. The company reported that 18 of the 35 stages successfully exceeded 2,800 lb/ft and 90-100 bpm, meeting Tamboran’s v2 design specifications.
For the SS-3H well, the company is taking precautionary steps to reinforce a stress point in the casing connection before resuming stimulation activities in Q2 2025. This pause will allow Tamboran to incorporate lessons from the SS-2H ST1 campaign to increase efficiency for the longer SS-3H well.
The company’s completion design has evolved across its well program, with each well targeting progressively higher flow rates:
Strategic Initiatives
Beyond its immediate operational activities, Tamboran is pursuing several strategic initiatives to maximize the value of its Beetaloo Basin assets.
The company has commenced procurement for a 40 MMcf/d Sturt Plateau Compression Facility and is on track with its pipeline development through the agreement with APA Group. The SS Pilot Project is expected to reach final investment decision (FID) by mid-2025, with first gas planned for the first half of 2026.
Tamboran is also evaluating a data center opportunity as part of an expanded Phase 1 development. The company notes that the Northern Territory is well-positioned to become a regional hub for data centers in the Asia-Pacific region, with existing fiber optic cables passing within approximately 30 miles of Tamboran’s Shenandoah South development.
Additionally, Tamboran has signed a non-binding memorandum of understanding with Santos (ASX:STO) to undertake technical studies relating to a potential Darwin LNG Train 2 expansion and collaboration in their joint EP 161 asset. This partnership could integrate with Tamboran’s Phase 3 NTLNG Development plans.
Financial Position
As of December 31, 2024, Tamboran reported a cash balance of US$59.4 million, following several significant cash inflows during the period, including US$8.0 million from the sale of a U.S. rig, US$7.4 million from the IPO Greenshoe, and US$6.2 million from an R&D tax credit.
The company’s cash position is illustrated in the following chart:
Tamboran stated that it is fully funded to deliver IP30 flow test results from both the SS-2H ST1 and SS-3H wells by mid-2025, despite an anticipated impact of US$0.5 million related to SS-3H evaluation and remediation.
Forward-Looking Statements
Tamboran outlined several upcoming catalysts that will drive its progress toward production from the proposed 40 MMcf/d (gross, 19 MMcf/d net) Pilot Project:
The company expects to commence flow testing of the SS-2H ST1 well in March 2025, with IP30 flow test results expected in April 2025. For the SS-3H well, stimulation and flow testing are planned for April/May 2025, with IP30 results anticipated by mid-2025.
Following these results, Tamboran plans to make a final investment decision on the SS Pilot Project by mid-2025, commence drilling and construction of facility and pipeline infrastructure in the second half of 2025, and achieve first gas from the proposed SS Pilot Project in the first half of 2026.
The company’s normalized flow test results from its SS-1H well have outperformed other wells in the Beetaloo Basin, providing confidence in the productivity potential of its upcoming wells. With its substantial acreage position and improving operational efficiency, Tamboran is positioning itself as a significant player in Australian natural gas development as it moves toward production in 2026.
Full presentation:
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