EDGAR 10-K Filing

Company CIK: 1997652
Filing Year: 2025
Filename: 1997652_10-K_2025_0001628280-25-042774.json

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ITEM 1. BUSINESS
ITEMS 1 AND 2. BUSINESS AND PROPERTIES
General Development of Business and Corporate Reorganization
Headquartered in Sydney, Australia, we have been engaged in the development of Australian oil and natural gas reserves since our formation in 2009. Since 2014, we have focused our development activities within the Northern Territory.
TR Ltd. completed its initial public offering in Australia in July 2021 and was publicly listed on the ASX under the ticker “TBN.” Tamboran was incorporated in Delaware on October 3, 2023 for the purpose of effecting a scheme of arrangement under Australian law between Tamboran and TR Ltd., which we refer to as the “Corporate Reorganization.” On December 13, 2023, Tamboran implemented the Corporate Reorganization and acquired all of the outstanding ordinary shares of TR Ltd. in exchange for 1,716,672,600 CDIs representing beneficial interests in 8,583,363 shares of our common stock, with each CDI representing 1/200th of a share of our common stock. Concurrently, TR Ltd.’s ordinary shares were delisted from the ASX and our CDIs were listed on the ASX. Following the Corporate Reorganization, Tamboran’s assets consisted primarily of 100% of the ordinary shares of TR Ltd. Tamboran completed its U.S. initial public offering (“IPO”) in July 2024.
The description of our business included in this report as of the dates and for the periods prior to the Corporate Reorganization reflects the business of TR Ltd., and the description of our business as of the dates and for the periods from and after the Corporate Reorganization reflect the business of Tamboran and its consolidated subsidiaries, in each case unless otherwise expressly stated or the context otherwise requires. The consolidated financial statements and other financial information of Tamboran included in this report reflect the historical financial statements of TR Ltd., as retroactively adjusted to give effect to the Corporate Reorganization.
The terms “we,” “us,” “our” and the “Company,” as used herein and unless otherwise stated or indicated by context, refer to TR Ltd. and its subsidiaries prior to the Corporate Reorganization and to Tamboran and its subsidiaries after the Corporate Reorganization.
Overview
Tamboran is an early stage, growth-driven independent natural gas exploration and production company focused on an integrated approach to the commercial development of the natural gas resources in the Beetaloo Basin located within the Northern Territory of Australia. Through its subsidiaries, Tamboran holds approximately 1.9 million net prospective acres and is the largest acreage holder in the Beetaloo Basin. We believe natural gas will play a significant role in the transition to cleaner energy and are committed to supporting the global energy transition by developing commercial production of natural gas in the Beetaloo Basin with net zero equity Scope 1 and 2 emissions.
The Beetaloo Basin
The Beetaloo Basin, an area of approximately seven million acres (10,800 square miles), is believed to contain significant quantities of unconventional natural gas resources. The Beetaloo Basin is a structural component of the Greater McArthur Basin in the Northern Territory and is located approximately 300 miles southeast of Darwin, Northern Territory. The following image illustrates the location of the Beetaloo:
Preliminary results and third-party data indicate that natural gas produced in the Beetaloo generally has lower carbon dioxide content compared to natural gas produced elsewhere in Northern Australia and major fields supplying Australia’s East Coast gas market. We believe our application of U.S. drilling and completion technology will provide us with a competitive advantage to achieve natural gas production in compliance with the Australian government’s recently enacted GHG regulations. The Australian Federal government’s current policy is to target net zero carbon emissions economy-wide by 2050. The Australian government’s safeguard mechanism (legislation.gov.au) provides regulations that shale gas facilities will have a “zero baseline” meaning they must have Net Zero Scope 1 emissions by law (the “Safeguard Mechanism”). We have set a target to exceed these requirements by reaching net zero equity Scope 1 and 2 GHG emissions upon commencement of commercial production. We expect there to be a variety of means in which we could achieve our equity net zero Scope 1 and 2 goals, including but not limited to, utilizing carbon offsets, for which the prices are capped by applicable law, exploring opportunities to power our facilities with renewable energy sources, implementing methane leakage minimization technology in the design and operation of our production facilities and integrating a carbon capture storage hub with our proposed LNG project.
To date, our appraisal and development activities have focused on the dry gas shale target of the Middle Velkerri B formation. Regional data from exploration wells, initial results from our appraisal wells, including well log and core data, as well as available 2-D seismic data, indicate that the geological properties of the Middle Velkerri section in the Beetaloo Basin are widespread with geology similar to that of the Marcellus Shale of the Appalachian Basin in the northeastern United States (the “Marcellus”). In particular, the dry gas areas of the Marcellus qualify as an appropriate analogous reservoir to the Middle Velkerri shale of the Beetaloo, having similar rock and fluid properties (such as organic-rich source rock and similar thermal maturity), similar reservoir conditions (including depth, pressure gradient and temperature ranges), and drive mechanism (using pressure depletion and gas desorption). While the Marcellus is at a more advanced stage of development than the Beetaloo, we believe comparison to the Marcellus may assist in our estimations and interpretation of data.
Our Business Plan
Our business plan to develop the Beetaloo Basin consists of three phases. The focus of the first phase is on the transition from exploration activities to the commercialization of our properties by drilling and stimulating five wells and developing the Sturt Plateau Compression Facility (“SPCF”, collectively with the five wells, the “Shenandoah South Pilot Project”). During fiscal year 2025, we progressed our first phase towards the commercialization of our assets and accomplished significant milestones, including:
•drilling SS-2H ST1 and SS-3H with over 5,500 and 10,000-foot horizontals, respectively,
•safely executing a stimulation program,
•completing record Beetaloo Basin IP30, IP60 and IP90 flow rate tests on SS-2H ST1, and
•receiving Native Title Holder consent and Northern Territory Government (“NT Government”) approval to sell gas under the Beneficial Use of Gas (“BUG”) legislation, which allows Tamboran to sell gas under an exploration permit during the appraisal period.
Over the course of fiscal year 2026, we plan to progress our development activities towards gas sales from the Beetaloo Basin, which remains on track for mid-calendar year 2026, including:
•the drilling of the three additional Shenandoah South wells (SS-4H, SS-5H and SS-6H) in the Shenandoah South Pilot Project,
•the stimulation of the SS-4H well in 2025 and the SS-3H, SS-5H and SS-6H wells in 2026, and
•completing construction activities and commissioning of the SPCF.
Our goal is to achieve ~40 MMcf/d (gross) plateau production commencing in 2H 2026 from the Shenandoah South Pilot Project, subject to weather conditions and final stakeholder approvals.
Along with Daly Waters we entered a binding development agreement with APA Group (ASX: APA), Australia’s largest gas infrastructure company by volume whereby APA Group will build and operate the 12-inch diameter Sturt Plateau Pipeline (“SPP”). The 23-mile pipeline will connect the SPCF to the existing gas transmission network through the Amadeus Gas Pipeline (“AGP”). APA Group has commenced work on the pipeline activities and it is expected that the SPP will be available to receive gas from mid-2026.
Tamboran has commenced construction of the SPCF that will process the raw gas into sales gas, subject to the terms of the development agreement. To date, the long lead items of the dehydration and compression unit have been delivered to Australia and earthworks have comments on site as activities scale up to the construction period.
We intend to fund these costs with cash on hand as well as net cash proceeds from one or more debt or equity offerings.
The Shenandoah South Pilot Project can be expanded from 40 MMcf/d up to potentially 100 MMcf/d by progressing an expansion of the SPCF. There is currently sufficient capacity in the AGP to accommodate this expansion, providing a path to gas sales into the NT and East Coast gas markets.
The second phase of our business plan involves constructing a new high capacity pipeline to access the Australian East Coast domestic gas market as well as ullage in the existing East Coast LNG export facilities in Gladstone. Tamboran has partnered with APA Group to construct, own, and operate an approximately 1,000-mile pipeline to connect the Beetaloo to the main trunk line of the East Coast gas grid. We anticipate that this pipeline will reduce the cost of transporting gas from the Northern Territory to the East Coast by up to 50%.
Australia’s East Coast gas market currently has ~5 Bcf/d of demand, including ~1.3 Bcf/d domestic and ~3.6 Bcf/d LNG export capacity. A gas shortfall is forecast on the East Coast in the late-2020s, providing a near-term opportunity for Beetaloo Basin gas to fill an increasing supply gap. We have secured non-binding letters of intent from six of Australia’s largest energy retailers with respect to the purchase of natural gas from us, with an aggregate volume of 875 MMcf/d for a period of up to 10 to 15 years.
The third phase of our business plan aims to supply natural gas for export through the existing LNG plants in the Middle Arm Precinct (“MAP”) near Darwin and our proposed Northern Territory LNG export facility (“NTLNG”) to South and East Asian markets. The NTLNG project has completed Pre-FEED with Bechtel, the world’s leading LNG engineering, procurement and construction (“EPC”) contractor, assessing the potential first phase to consists of two 6 million tons of LNG per annum LNG trains, each train consuming approximately 1 Bcf/d of gas from the Beetaloo Basin.
Tamboran is also assessing opportunities to provide gas to existing LNG facilities. In consideration of our proposed NTLNG project, the government of the Northern Territory of Australia has awarded us exclusive use of an approximately 420-acre site for a term extending to December 31, 2027 under the Interim Agreement, with two one-year extension options to progress FEED studies with respect to NTLNG. We completed the Concept Select study in the first quarter of 2024 with Wood Group plc, which affirmed the feasibility of commencement of commissioning of the first LNG train in the early 2030s.
The MAP, an industrial complex adjacent to the city of Darwin, seeks to provide infrastructure focused on low emissions operations, for the export, processing, storage, shipping and rail transportation of LNG and other hydrocarbons. The MAP precinct is currently home to an export hub with two existing and operational LNG export terminals, the Darwin LNG terminal with a capacity of 3.7 MTPA and the Ichthys LNG terminal with a capacity of 8.9 MTPA. The Australian government has committed A$1.5 billion in investments to further develop MAP infrastructure and access, including dredging of the deepwater port and module offloading facility, construction of road and rail access and distribution of electricity. We estimate total time required for construction of the NTLNG project to be five years and have a non-binding memorandum of understanding with each of bp and Shell for 20-year LNG purchase contracts. We intend to seek additional strategic partners for the financing and development of these and other infrastructure projects.
Our business and development plans include the continuous focus on reducing costs while increasing production efficiencies. We believe that importing U.S. unconventional drilling and completion techniques, best-practices and technology, together with the right personnel, will reduce the incremental cost to drill and complete each subsequent well. We currently have a contract with Helmerich and Payne, Inc. (NYSE: HP) for one H&P FlexRig® with a 10-year option to contract for up to four additional rigs. We have entered into a two-year preferred arrangement with Liberty Energy Inc. (NYSE: LBRT) (“Liberty Energy”) to provide us dedicated frac fleets and personnel on market terms (as reasonably determined by the Beetaloo Joint Venture).
We estimate the drilling and completion costs of each of the remainder of the wells in the Shenandoah South Pilot Project will average approximately $30 million (gross), which includes the drilling, simulation and extended production testing (“EPT”) of the wells. As a result of our application of U.S. practices, longer lateral lengths and increased number of stimulated stages. We are targeting long-term development well costs of $16 million per well with horizontal sections of more than 10,000 feet with 60 stages. We believe by taking advantage of efficiencies related to economies of scale, continued infrastructure development in the Beetaloo and resource maturation, over time we will significantly reduce the cost to drill and complete our wells.
Competitive Strengths
We have a number of strengths that we believe will help us successfully execute our business strategy, including:
•Leading acreage holder and operator in the high-quality Beetaloo. Our Beetaloo Basin assets cover approximately 1.9 million net acres, the most extensive position currently reported in the basin. Over 5,000 miles of 2-D seismic data has been collected over the basin to date. Based on our seismic interpretation, we believe our acreage position consists of significant quantities of high-quality natural gas resources in what we believe to be the core of the Velkerri shale gas play. Our initial development area of the Middle Velkerri-B shale shows an average shale thickness of 230 feet across approximately 610,400-acres (approximately 950 square miles). We estimate the Middle Velkerri section to be continuous across the same area. The Beetaloo Basin has very few operators and no urban areas. The geographical features of the Beetaloo, our expansive contiguous acreage position and very few restrictive boundaries support more than 10,000-foot laterals and U.S. style unconventional drilling techniques. In addition, we believe our position as the leading acreage holder in the Beetaloo will support our efforts to establish commercial production in volumes sufficient to stimulate investment in in-basin frac sand and other services.
•Premium Markets. We expect the relative geographic proximity of the Beetaloo to the major population centers on the Australian East Coast and the Asian LNG markets to provide us with the opportunity to potentially obtain attractive prices for our natural gas relative to markets in North America based on historical pricing.
•High caliber and experienced management team with a track record of success. Our senior management team has extensive experience with vertical and horizontal drilling in unconventional plays and an average of over 25 years of experience in the upstream oil and gas industry. Additionally, our leadership team has significant experience managing integrated energy and power assets for large-scale enterprises, including companies such as BHP Billiton, Petrohawk, Unocal, Chevron, and Apache.
•Equity Net Zero Scope 1 and 2 emissions. Australian law requires that natural gas reserves in the Beetaloo be produced on a Scope 1 net zero basis once facilities are covered by the Safeguard Mechanism. We believe we are positioned to achieve net zero equity Scope 1 and Scope 2 emissions. We have a comprehensive sustainability program, which is overseen and directed by a Sustainability Committee composed of board members. We believe natural gas delivered from the Beetaloo will provide an attractive alternative for domestic and Asian economies seeking to reduce reliance on coal and reduce their own GHG emissions.
•High quality, blue-chip strategic partners. We have contracted H&P to exclusively provide drilling services for our wells in the Beetaloo. We have an agreement with Liberty Energy to provide a dedicated frac fleet and personnel. We are working with APA Group to progress access and approvals for a large diameter gas pipeline from the Beetaloo Basin to the Australian East Coast gas grid. In parallel we are working on a pipeline from the Beetaloo Basin to Darwin to deliver gas to our proposed NTLNG facility. Our memoranda of understanding with each of bp and Shell contemplate 20-year LNG purchase agreements from our proposed NTLNG development. We have entered into a gas sales agreement with the NT Government for gas sales of up to ~40 MMcf/d for a period of up to mid-2041. We also have non-binding letters of intent from six of Australia’s largest energy retailers with respect to the purchase of natural gas from us, with an aggregate volume of 875 MMcf/d for a period of up to 10 to 15 years. We are seeking to enter into definitive agreements with these strategic partners as we execute on subsequent phases of our business plan, and we will continue to seek additional strategic partnerships in the development of the Beetaloo. See “-Agreements Relating to the Development of our Assets” in this report and “Certain Relationships and Related Person Transactions” included in the 2025 Proxy Statement for further information.
•Pursue strategic acquisitions with substantial resource potential. As the leading acreage holder in the Beetaloo, we have a proven history of acquiring leasehold positions in the Beetaloo that have high-quality natural gas resource potential. We believe our executive team, with its extensive experience in the oil and gas industry, has a competitive advantage in identifying acquisition targets and a proven ability to evaluate resource potential. We regularly review acquisition opportunities and intend to pursue acquisitions that meet our strategic and financial targets.
Our Assets and Operations
We currently hold interests in six exploration permits (“EPs”) and one exploration permit application (“EP(A)”), each located in the Beetaloo Basin. See “-Title to Properties” for further information. Our key assets are (i) a 25% non-operated working interest in EP 161, (ii) a 38.75% working interest in EPs 76, 98 and 117, where we are the operator, and (iii) a 100% working interest in EPs 136, 143 and EP(A) 197, where we are the operator. The deepest portions of the Beetaloo Basin, and our strategic near-term focus are those areas covered by EPs 76, 98, and 117, which are held indirectly through TB1, a 50/50 joint venture with Daly Waters. TB1 holds interests in EPs covering four million gross (1.5 million net) acres.
On May 12, 2025, Tamboran, TR West, TR Ltd., DWE and TB1 entered a second amended and restated joint venture and shareholders agreement (the “TB1 A&R JVSA”). See “-Agreements Relating to the Development of our Assets - TB1 A&R JVSA”. Following the execution of the TB1 A&R JVSA, our assets are depicted by the blue colored areas in the map of the Beetaloo Basin below.
Summarized below are our interests, as of June 30, 2025, in exploration permits in Beetaloo Basin together with the wells drilled on such acreage and our associated net working interest. We consider all of our acreage as undeveloped, since even though we classify two of our appraisal wells as “productive,” acreage has not been allocated or assigned to such wells. Our acreage position and the scarcity of other operators or urban areas near the Beetaloo provide us with the space necessary to eventually drill pad wells with up to three to four-mile horizontal laterals, greatly increasing efficiencies and production from a relatively smaller number of wells.
Exploration Permit Gross / Net Acres Expiration Date
EP 76 346,700 / 134,346 May 30, 2028
EP 98 2,312,262 / 896,000 May 30, 2028
EP 117 1,380,864 / 535,085 May 30, 2028
EP 136 207,000 / 207,000 July 23, 2029
EP 143 512,000 / 512,000 March 4, 2028
EP 161 512,000 / 128,000 March 20, 2026
EP(A) 197 192,000 / 192,000 N/A
As of June 30, 2025, we have participated in 11 appraisal wells since fiscal year 2022, 9 of which we drilled as the operator, including drilling of the final three Shenandoah South wells (SS-4H, -5H and -6H).
Well, Name1
Operator Non-Operator(s) Exploration
Permit Date Drilled Tamboran
Working
Interest
Tanumbirini #2H (“T2H”)
Santos Tamboran 161 May 2021 25 %
Tanumbirini #3H (“T3H”)
Santos Tamboran 161 August 2021 25 %
Maverick T463 A1-1 (“M1V”)
Tamboran N/A 136 September 2022 100 %
Amungee NW-2H (“A2H”)
Tamboran DWE & FOG 98 November 2022 38.75 %
Shenandoah S-1H (“SS1H”)
Tamboran DWE & FOG 117 July 2023 38.75 %
Amungee NW-3H (“A3H”)
Tamboran DWE & FOG 98 September 2023 38.75 %
Shenandoah S2-2H ST1 (“SS-2H ST1”)
Tamboran DWE & FOG 98 August 2024 47.5 %
Shenandoah South 3H (“SS-3H”)
Tamboran DWE & FOG 98 November 2024 47.5 %
Shenandoah South 4H (“SS-4H”)
Tamboran DWE & FOG 98 July 2025 50.0 %
Shenandoah South 5H (“SS-5H”)
Tamboran DWE & FOG 98 July 2025 50.0 %
Shenandoah South 6H (“SS-6H”)
Tamboran DWE & FOG 98 July 2025 50.0 %
(1) Our interest in the A2H, SS1H, SS-2H ST1, A3H, SS-3H, SS-4H, SS-5H and SS-6H are held through TB1, which holds an undivided 77.5% working interest.
As of June 30, 2025, we operated six gross (approximately 3.1 net) natural gas wells (the SS-2H ST1, SS1H, SS-3H, A2H, A3H, and MIV wells) and hold interests in an additional two gross (approximately 0.5 net) non-operated wells (the T2H and T3H wells). Although none of the wells drilled in the Beetaloo to date are currently flowing to sales, we successfully completed flow testing of our SS1H and SS-2H ST1 wells and believe these wells are currently productive. We believe the T2H, T3H, and A2H wells are likely capable of producing sufficient quantities of gas to justify completion or recompletion at a future date with further investment and workover. Our A3H well is capable of being stimulated but is currently drilled but uncompleted. Subsequent to June 30, 2025, Tamboran commenced three wells as part of the Shenandoah South Pilot Project drilling program with the spudding of SS-4H and followed by SS-5H and SS-6H. The three wells being drilled back to back with a total combined horizontal section of 30,000 feet. These three wells are the last remaining wells required to be drilled as part of Tamboran’s commitment to deliver 40 MMcf/d to the local market under our gas sales contract with the NT Government.
Ownership of the proposed North FDSA (as shown in the map above titled “Northern Pilot Area”), the focus for initial gas production in the Northern Territory, remained unchanged (Tamboran 47.5% operator, DWE 47.5% and Falcon 5%) with expansion into the South FDSA (as shown in the map above titled “Southern Pilot Area”), (Tamboran 38.75%, DWE 38.75% operator and Falcon 22.5%) anticipated in accordance with the terms of the Asset Sale Agreement (as defined below). Falcon elected not to participate in the 2025 three well program and will reduce their working interest to nil on completion of the three wells.
In conjunction with the Checkerboard (as defined below), Tamboran and DWE entered into an agreement whereby DWE would acquire a non-operating and non-controlling interest across 100,000 acres within two areas of Tamboran's post-checkerboard acreage position for a consideration of $15 million, see “-Agreements Relating to the Development of our Assets - Asset Sale Agreement”. Tamboran reserved 406,693 gross acres (236,370 net acres) as the Phase 2 Development Area, where Tamboran plans to focus development on supplying gas into Australia's East Coast domestic gas market. On completion of the Asset Sale Agreement to DWE, Tamboran is expected to hold 236,370 net acres (58.12% operated interest) over the Phase 2 Development Area, with DWE (19.38%) and Falcon (22.5%) holding the remaining interest.
Tamboran’s net prospective acres across its Beetaloo Basin assets following the completion of the Checkerboarding Strategy (as defined below) and the Asset Sale Agreement (as defined below) include:
Area Description Gross/Net Acres Interest
Proposed North FDSA Subject to the Completion of both SS-2H ST1 and SS-3H on the Shenandoah South Pad. 20,309/9,647 47.50 %
Proposed South FDSA 20,309/7,870 38.75 %
Phase 2 Development Area 406,693/236,370 58.12 %
Proposed Retention Lease 10 219,030/148,568 67.83 %
Remaining ex-EP 76,98 and 117 acreage 1,487,418/1,152,749 77.50 %
EP 136 207,000/207,000 100 %
EP 161 512,000/128,000 100 %
Royalty Owners
We will be required to pay a statutory royalty to the NT Government of 10% of the gross value, at the well-head, of all petroleum produced in connection with a production license or EP in a project area. The gross value of that petroleum is determined by the Petroleum Royalty Act (NT). Additionally, we will pay royalties of between 6% to 11% to other third parties under certain commercial arrangements. See “-Environmental Matters and Regulation” and “-Agreements Relating to the Development of our Assets” in this report and “Certain Relationships and Related Person Transactions” included in the 2025 Proxy Statement for further information.
Mr. Sheffield, our largest shareholder, holds a 2.3% overriding royalty interest (“ORRI”) through Daly Waters Royalty over all of our Beetaloo assets.
Sweetpea has granted a 4% ORRI in favor of the Tom Dugan Family Limited Partnership, LLP, Territory Oil & Gas, LLC; Malcolm John Gerrard, and Longview of all petroleum produced from the Sweetpea Assets and the land subject to the Sweetpea Assets.
Sweetpea has granted PetroHunter Energy Corporation an ORRI of 2% of the petroleum produced from the land over which the EP 136 and EP 143 were originally granted and EP(A) 197 was applied for.
Sweetpea has granted an undivided 1% ORRI in favor of Jeffrey J Rooney as trustee of the Siegel Dynasty Trust of all petroleum produced from the Sweetpea Assets and the land subject to the Sweetpea Assets. The beneficiaries of the Siegel Dynasty Trust are Emily Siegel and Robert Siegel, who are the children of David N. Siegel, who is a director of the Company. The ORRI extends to all extensions or renewals of each Sweetpea Assets (as applicable) and to any production licenses or subsequent rights to produce petroleum, from those lands, which are granted or issued to Sweetpea, its successors or assignees.
Tamboran B2 Pty Ltd (formally Origin Energy B2 Pty Ltd) granted 0.775% ORRI in favor of the Bayless Group, comprising Tom Dugan Family Limited Partnership, Territory Oil & Gas LLC and Malcolm John Gerrard over EP 76, 98 and 117.
Middle Arm Development
In July 2024, we were granted an Interim Agreement by the NT Government over its 420-acre (170-hectare) site at Middle Arm Precinct (the “Interim MAP Agreement”). The Interim MAP Agreement provides us with future exclusivity over the Wirraway North land until the end of 2027 with two 1-year extension periods and maps out how the Crown Lands department will work with Tamboran for future development of the site. The Interim MAP Agreement is expected to be in place until it is replaced by a commercial lease document just prior to the final investment decision (“FID”). We believe the associated infrastructure at MAP provides us with the opportunity to initially export up to 6 MTPA per train through our proposed NTLNG development. We intend to seek strategic partners in financing and developing the proposed NTLNG development. In June 2023, we announced two non-binding memoranda of understanding with bp and Shell to each purchase up to 2.2 MTPA over a 20-year period from the proposed NTLNG development.
In August 2024, we awarded Bechtel Corporation (“Bechtel”) pre-FEED engineering studies for the NTLNG development. Bechtel are the world’s leading LNG EPC contractor delivering more than 140 MTPA of LNG (30% of the global LNG production), including nine LNG trains in Australia, with an additional 45 MTPA of capacity currently under
EPC, globally. Pre-FEED activities were completed by Bechtel in April 2025 ahead of progression toward FEED phase engineering.
Our Joint Venture Partner
Our largest shareholder is Bryan Sheffield. Mr. Sheffield, through Sheffield Holdings, LP, first began acquiring interests in TR Ltd. in November 2021, has made three subsequent equity investments, and has now grown to become Tamboran’s largest shareholder, currently holding beneficial ownership of approximately 17.6% of outstanding common stock. Mr. Sheffield has significant investment experience in the U.S. unconventional energy sector. He previously served as the Chairman, CEO and Founder of Parsley Energy Inc., a major independent unconventional oil and gas producer in the Permian Basin in Texas. Parsley Energy was acquired by Pioneer Natural Resources Company in January 2021 for $7.3 billion. He is currently the Managing Partner of Formentera Partners, an energy private equity firm.
In September 2022, Mr. Sheffield, through Daly Waters, partnered with TR Ltd. through a newly formed 50 / 50 joint venture, TB1, to acquire a 77.5% interest in EPs 76, 98, and 117 covering approximately four million gross acres (1.5 million net acres).
Agreements Relating to the Development of our Assets
Capitalized terms used but not defined in this section or elsewhere in this report have the meanings ascribed to them in the applicable agreement.
TB1 A&R JVSA
We are a member of TB1, a 50/50 joint venture, through our wholly owned subsidiary, TR West, with Daly Waters, an entity controlled by Bryan Sheffield. TB1 in turn wholly owns TB1 Operator.
On May 12, 2025, we entered into the TB1 A&R JVSA. The following summary of the TB1 A&R JVSA does not purport to be complete and is qualified in its entirety by reference to the full text of the TB1 A&R JVSA, a copy of which is attached as Exhibit 10.27 to this report.
Under the terms of the TB1 A&R JVSA, TB1 is governed by a board (the “TB1 Board”) of not more than six members, with the number of directors appointed by the joint venture parties in respect of their proportion of equity ownership. The parties have no right to designate directors at such time as such party’s ownership falls below 10% of the outstanding equity interests in TB1. The TB1 Board currently consists of four board members; two designated by the Company (Eric Dyer and Patrick Elliott) and two designated by Daly Waters (Stephanie Reed and Blake London).
We are the manager of TB1 with responsibility to carry out day to day operations, including managing the activities of the TB1 Operator in operating the properties and complying with the Beetaloo JOA. The manager is also responsible for submitting work plans and budgets with respect to the development of the properties by the TB1 Operator, in accordance with the terms of the Beetaloo JOA, and submitting production and retention licenses. Under the TB1 A&R JVSA, we have agreed to use all reasonable endeavors to apply for a production license for certain permit areas, by July 15, 2025. The parties have agreed to push this timeframe out to mid-October 2025.
Subject to the conditions and procedures set forth in the TB1 A&R JVSA, DWE may unilaterally replace the Manager if:
•certain production licenses have not been applied for by 15 July 2025 (the parties have agreed to extend this deadline to mid-October 2025);
•certain permits have not been transferred to Tamboran and DWE (or their nominees) by 31 December 2025;
•we fail to drill, complete, and tie-in the required Commitment Wells (as defined below) within agreed timeframes; or
•Tamboran’s midstream affiliates default under the midstream unitholders’ deed.
If replaced as Manager, we are required to provide transitional services to DWE for up to six months.
Special Approvals
Under the TB1 A&R JVSA, TB1 is not permitted to take any of the following actions without the affirmative consent of 75% or more of the total number of votes cast by directors present and entitled to vote at a duly convened meeting of the TB1 Board:
•entering into any partnership or joint venture;
•entering into any new borrowing facility in excess of $5 million;
•decisions to dispose of or vary the terms of a permit or apply for any new permit;
•decisions to proceed to development or production;
•sell or otherwise dispose of assets valued at A$5 million or more;
•entering into any material agreement with any director, shareholder or any affiliate of the foregoing;
•approval of any work program and budget, or any revision of the scope of any approved work program and budget, or approval of variances to any such work program or budget;
•approval under the Beetaloo JOA of any authority for expenditure in excess of $250,000;
•approval to award any contract for Joint Operations over $250,000; and
•all decisions under, or any amendment or variation of, the Gas Sale Agreement between TB1 and Origin Retail dated September 18, 2022 (the “Origin GSA”).
In addition, without the prior approval of shareholders holding 75% or more of the total number of votes cast by shareholders present and entitled to vote at a duly convened meeting of the shareholders, TB1 will not take any of the following actions:
•amendment of the constitution;
•loans or financial accommodations with shareholders;
•incurring liability under any guarantee or indemnity;
•issuing new shares or other securities not contemplated by the TB1 A&R JVSA;
•changing the issued share capital;
•cessation of or material alteration of the scale of operations;
•disposal or encumbering of the shares in a subsidiary; and
•seeking an initial public offering on any securities exchange.
Cash Call and Dilution
If a party fails to make a required cash call, the other party may elect to make the contribution on such defaulting party’s behalf and cause the contributed amount to constitute debt owing from the non-contribution party bearing interest at consistent with the Agreed Interest Rate defined in the Beetaloo JOA, defined generally as average quote rate for 90-day Australian bills of exchange plus 4%. Alternately, a party may make the contribution on such defaulting party’s behalf and cause the contributed amount to constitute additional equity, receiving additional shares in TB1 at a value of A$1.00 per share.
Technical Committee
The shareholders shall maintain a committee to supervise and be responsible for providing recommendations to the TB1 Board in respect of technical and other matters relating to the exploration, development and operation of the TB1 Operator. If the Technical Committee is split on any recommendations to be made to the TB1 Board, members of the
Technical Committee representing Daly Waters shall have the right to make the final decision on which such recommendations shall be made to the TB1 Board. The right to convert a defaulting party’s funding shortfall into equity is subject to the procedures described in the TB1 A&R JVSA.
Conversion to Checkerboard
Checkerboard Strategy means an approach to dealing with EPs 76, 98 and 117 whereby Tamboran and Daly Waters pursue a split of 50% of TB1 Operator’s interest in the Permits such that the title and ownership of the Permits will be split evenly, as between Tamboran and Daly Waters, in terms of equity interest and operated blocks in respect of the specific area.
At any time, following approval of a Development Plan, either joint venture party may direct the Technical Committee to provide a recommendation to the TB1 Board in relation to the proposed Checkerboard Strategy and the Technical Committee must, acting in good faith, consider the best approach to implementing the Checkerboard Strategy.
The Checkerboarding Strategy is divided into three tranches.
In Tranche 1, Tamboran and Daly Waters must apply for retention licenses for both the North and South First Strategic Development Areas (“FSDAs”) by mid-October 2025 (as extended). The North FSDA will remain with TB1, while the South FSDA will be split equally (38.75% each) between Tamboran and DWE, with DWE (or its nominee) acting as Operator. Both retention licenses must be granted and transferred by December 31, 2025. If either deadline is missed, subject to the terms and conditions in the TB1 A&R JVSA, DWE has the right to take over as Manager and/or acquire Tamboran’s entire interest in the South FSDA for A$1.00.
In Tranche 2, the parties must apply for retention licenses over the Dev A++ and Dev B areas by March 31, 2026, with the grants and transfers to be completed by September 30, 2026. After the retention licenses are granted, Tamboran will remain the operator of Dev A++, and DWE will become the operator of Dev B. If these deadlines are not met, DWE receives the same rights as in Tranche 1: to replace the Manager and/or acquire Tamboran’s interest.
Tranche 3 covers the remaining “Checkerboard” permit areas. Tamboran and DWE will take turns selecting paired blocks and applying for Retention or Production Licenses until all acreage is allocated. Tamboran must select the Checker 10 area as its first choice.
In conjunction with the Checkerboard, the Company and DWE entered into an Asset Sale Agreement - See “Asset Sale Agreement”.
Gas Marketing and Midstream Rights
The TB1 A&R JVSA grants DWE an option to back-in for 50% of any new gas sale agreement (“GSA”) covering the first 0.5 Bcf/d of sales entered into by Tamboran or its affiliates until 24 months after all Checkerboard Blocks are licensed.
DWE (or its nominee) is granted a 50% option, on identical commercial terms, to participate in any Beetaloo-related infrastructure project (pipelines, processing, sand, water, etc.) undertaken by Tamboran or its affiliates, exercisable within 90 days of receiving detailed commercial terms.
TB1’s right-of-first-refusal over expansions of SPP and the SPCF are prioritized for the FSDAs gas; if only one shareholder supports an expansion, that shareholder may utilize 100% of the added capacity.
Commitment Wells; Development Obligations
The TB1 A&R JVSA requires six horizontal “Commitment Wells” (minimum 7,500 ft laterals; ≥45 stages) to be drilled, completed, and tied-in over three consecutive work-program years (2025-2027). DWE will select all Commitment Well locations, with at least four wells required in the North FSDA. If Tamboran does not fully participate (including any Falcon default interest) or if any Commitment Well milestones are missed, DWE may: (i) replace Tamboran as Manager; and/or (ii) acquire Tamboran’s entire South FSDA interest for A$1.00.
Other
Where retention license in the North FSDA and/or the South FSDA remain uncompleted, Daly Waters may elect to have us buy-back or otherwise convert its 50% interest in TB1 into a 38.75% direct participating interest in the Beetaloo Joint Venture prior to December 31, 2026.
Following the end of any fiscal year, provided profits are available for distribution, TB1 must pay a dividend in respect of each of TB1’s members’ respective equity interest. TB1 will distribute all profits, provided that profits may be retained to meet any capital adequacy or solvency requirements and is able to pay its debts as and when they fall due, or as required by applicable law or specified in an approved work plan.
Each of the members of TB1 have certain pre-emptive rights. Each joint venture party has a right of first offer and right to match any third party offers in connection with any proposed transfer of equity interests in TB1. The TB1 A&R JVSA also permits a party to “drag” the other in a sale of the joint venture if that selling party holds at least 75% of the equity interests in TB1. Each party likewise has the right to participate or tag along in any sale by the other party of 75% or more of the equity interests.
Upon the occurrence of any default under the TB1 A&R JVSA (which includes the failure to pay amounts due), the other party may elect to purchase all of the defaulting party’s equity in TB1 at a price equal to 95% of fair market value.
Falcon Agreements
The TB1 Operator is also a party to a joint operating agreement with Falcon (the “Beetaloo JOA”). The Beetaloo JOA establishes the respective rights and obligations of the TB1 Operator and Falcon in connection with EP 76, 98, and 117. The TB1 Operator is designated as the operator under the Beetaloo JOA. Pursuant to the Beetaloo JOA, Falcon capped its participation to 5% in the Shenandoah South Pilot Project and TB1 has agreed to pick up Falcon’s interest.
Asset Sale Agreement
On May 12, 2025, TR West, as seller, and the Company, as seller guarantor, and DWE entered into a binding agreement whereby DWE acquired a non-operating and non-controlling interest across 100,000 acres within two areas of Tamboran's post-checkerboard acreage position for consideration of $15 million. The transaction is subject to certain conditions precedent including, but not limited to, DWE obtaining approval from the Formentera Australia Fund, LP’s Limited Partner Advisory Committee, Tamboran shareholder approval and regulatory approvals.
McArthur Joint Operating Agreement
On December 11, 2012, we entered into a joint operating agreement (the “McArthur JOA”) with Santos QNT under which Santos serves as the operator of EP 161. The McArthur JOA will remain in effect as long as the permits remain in force in the names of two or more parties. Our current working interest under the McArthur JOA is 25%. We must continue to contribute our proportionate share of expenditures to maintain our proportionate interest in the underlying permit. Before incurring any commitment or expenditure greater than A$2,000,000, Santos must receive approval from an operating committee consisting of a representative from each of Tamboran and Santos. We have committed approximately $2.3 million through March 2026 based on minimum work requirements.
Drilling Contract with H&P
On September 9, 2022, we, through a wholly owned subsidiary, entered into a drilling contract with H&P (as amended, the “Drilling Contract”). The term of the Drilling Contract commenced on July 1, 2023. Under the Drilling Contract, and associated agreements, we granted H&P a 10-year preferential right to provide drilling services to us in connection with our exploration and production activities in Australia. We paid H&P a mobilization fee of $15,000 per day plus all associated costs for shipping from Houston, Texas to the first location being the SS1H well pad. The total import cost for rig 469 was $7.5 million. We will also pay an operating rate of $39,500 per day. The contract also provides for us to pay H&P a demobilization fee equal to the documented trucking and mobilization costs to a mutually-agreed location in Australia. Under the Drilling Contract we have an option to contract for up to four additional rigs.
Strategic Arrangement with Liberty Energy Inc.
We have entered into a two-year preferred arrangement with Liberty Energy to provide us dedicated frac fleets and personnel on market terms (as reasonably determined by the Beetaloo Joint Venture), which includes Liberty Energy’s latest sand mining and handling management solution. We believe that a strategic arrangement with Liberty Energy will
enable us to reduce delays typically experienced in transporting equipment to worksites, while increasing completion efficiencies and reducing costs. The equipment was first used to successfully conduct over 35 stimulation stages across a 5,483-foot (1,671-metre) horizontal section in the Mid Velkerri B Shale within SS-2H ST1 well and is planned to be used for 10,000-foot lateral sections of wells planned for stimulation in 2H 2025.
APA Group Agreements
Tamboran entered into agreements with APA Group whereby APA will build, own and operate the 23-mile (37 kilometer) 12-inch diameter Sturt Pipeline Project (“SPP”) for the Shenandoah South Pilot Project. The SPP will connect the SPCF to the existing APA-owned AGP, the delivery point for gas volumes under the Gas Sales Agreement with the Northern Territory Government (“NTGGSA”).
Tamboran and DWE have contracted all foundation capacity on the SPP from the commencement of operations until at least 2041, which reflects the term of the NTGGSA and have competitive access and pricing rights to contract capacity following completion of the initial term. Long-lead items have been ordered, detailed design is nearing completion, and the approvals process continues to progress. The project remains on schedule to deliver gas into the Northern Territory by 2H 2026, subject to weather conditions and final stakeholder approvals.
Tamboran also entered into an Early Development Agreement with APA Group for a pipeline from the Beetaloo to the East Coast Pipeline (the “BEC EDA”) to progress discussions relating to the construction of a large natural gas pipeline (the “BEC Pipeline Project”) to connect a central point in our Beetaloo acreage to the Australian east coast network of gas pipelines owned or operated by the APA Group (“East Coast Grid”) and the provision of gas transportation services on the BEC Pipeline Project to enable connection of the Beetaloo to the East Coast Grid. The delivery of the BEC Pipeline Project will be the subject of a future development agreement and the gas transport services will be the subject of a future gas transportation agreement. APA Group has commenced the Early Works defined in the BEC EDA, which include certain efforts to obtain access and approvals, along with developing revised project schedules and estimates.
Under the BEC EDA, APA Group has agreed to continue evaluation of the proposed pipeline with early works expenditure of up to A$5 million on the basis that we continue to progress and achieve certain agreed milestones conditions, such as the availability of sufficient financial resources to drill additional wells and us taking material steps toward the drilling of additional wells. The BEC EDA is a preliminary agreement related to the development of the BEC Pipeline Project, and as such, neither we nor APA Group will have material binding obligations until definitive agreements are signed.
Origin Retail Gas Sales Agreement
On September 18, 2022, the TB1 Operator entered into the Origin GSA whereby the TB1 Operator has agreed to supply, and Origin Retail has agreed to purchase up to 5.97 Mmboe per annum (2.99 Mmboe per annum net to Tamboran), gas sourced from EP 98, 76, or 117. The start date of the supply period under the Origin GSA must be between January 1, 2025 and December 31, 2028, and the end date is 10 years following the start date unless extended. Origin Retail is not obligated to perform under the Origin GSA until the TB1 Operator has satisfied certain conditions precedent, including making positive final investment decisions to proceed with the development of gas permits of a certain quantity sufficient to produce a minimum of ~30 MMcf/d; and to proceed with constructing a pipeline from those permits to any location with physical capacity to transport that volume; and all required regulatory approvals are received. We are not obligated to perform under the Origin GSA until a quantity greater than ~50 MMcf/d is sold from EPs 98, 76 or 117.
NT Government Gas Sales Agreement
On April 23, 2024, the Beetaloo Joint Venture signed the NTGGSA to supply the NT Government with 40 Tj/d (equivalent to ~40 MMcf/d or ~19 MMcf/d net to Tamboran) from the proposed Shenandoah South Pilot Project for an initial term that expires at the end of 2034, with the first gas supply expected in mid 2026. The Buyer has an option to extend the NTGGSA for a further 6.5 years through to mid 2041.
The NTGGSA includes a conditions precedent that require satisfaction for the agreement to become binding. Specifically, the NTGGSA is conditional on the Beetaloo Joint Venture entering into a binding gas transportation agreement with APA Group on the SPP, a binding gas processing agreement for the proposed SPCF, reaching a final investment decision on the Shenandoah South Pilot Project which we anticipate occurring in Q3 2025, and receiving key regulatory and stakeholder approvals. Once the NTGGSA becomes binding, the Beetaloo Joint Venture is required to deliver the daily quantity of gas available each day unless excused under the contract as part of permitted interruptions or
Force Majeure. If there is an unexcused supply shortfall, the Beetaloo Joint Venture may be liable to pay shortfall liquidated damages.
Customers and Marketing
We plan to market our natural gas under long-term agreements. Our ability to market natural gas will depend on many factors beyond our control, including the extent of domestic production and imports of natural gas, available storage, the proximity of our natural gas production to pipelines and corresponding markets, the available capacity in such pipelines, the demand for natural gas, the effects of weather, and the effects of state and federal regulation. There is no assurance that we will always be able to market all of our production or obtain favorable prices.
Seasonality
Weather conditions have a significant impact on the demand for natural gas used for heating loads and natural gas-fired power generation. Demand for natural gas is generally at its lowest during the spring and fall months and peaks during the summer and winter months. Demand in the winter season peaks due to residential and commercial heating load demand, while the summer season peaks due to cooling loads, which calls on increased natural gas fired power generation loads. However, seasonal anomalies such as warmer than normal winters or cooler than normal summers can lessen the magnitude of the seasonal fluctuations in demand. In addition, natural gas storage facilities are utilized to bring additional supply to the market that is utilized to meet peak demand levels during both winter and summer seasons. The Northern Territory also typically experiences greater rainfall from November to April. Although this season does present challenging conditions for operations, operators have drilled, stimulated and tested through the wet season successfully.
Competition
The oil and natural gas industry is intensely competitive, and we compete globally with other companies that have greater resources. Many of these companies not only explore for and produce natural gas but also carry on midstream and refining operations and market petroleum and other products on a regional, national or worldwide basis. These companies may be able to pay more for productive oil and natural gas properties or to define, evaluate, bid for and purchase a greater number of properties and prospects than our financial or human resources permit. In addition, these companies may have a greater ability to continue exploration activities during periods of low natural gas market prices. Our ability to acquire additional properties and to discover reserves in the future will be dependent upon our ability to evaluate and select suitable properties and to consummate transactions in a highly competitive environment. In addition, because we have fewer financial and human resources than many companies in our industry, we may be at a disadvantage in evaluating and bidding for oil and natural gas properties.
There is also competition between natural gas producers and other industries producing energy and fuel, including coal, other petroleum products and renewables. Furthermore, competitive conditions may be substantially affected by various forms of energy legislation and/or regulation considered from time to time by the government of Australia. It is not possible to predict the nature of any such legislation or regulation which may ultimately be adopted or its effects upon our future operations. Such laws and regulations may substantially increase the costs of developing natural gas and may prevent or delay the commencement or continuation of a given operation. Our larger or more integrated competitors may be able to absorb the burden of existing, and any changes to, federal, state and local laws and regulations more easily than we can, which would adversely affect our competitive position.
Human Capital Resources
As of June 30, 2025, we employed 46 people full time and one person part-time. We hire independent contractors on an as needed basis. We believe we have good relations with our employees. We and our employees are not members of any labor union. We prioritize local hiring for both employees and contractors, particularly in areas of field operations, to support employment opportunities in our local communities.
Safety and Training
Safety is our highest priority, including the prevention of any releases from our operations. We conduct routine maintenance and inspections at our facilities, and we have established practices and operational infrastructure to control and mitigate potential spills or discharges. We also provide training to our staff and contractors that cover spill response and reporting and take steps to ensure our teams are fully trained on our response plan in the event of any releases. We believe these measures continue to strengthen our process safety culture. We have a full-time Senior Manager of Health,
Safety and Environmental who is responsible for training, evaluation and risk mitigation as well as implementing safety measures.
Compensation and Benefits
We recognize that our employees are our most valuable resource and that we must provide competitive compensation to ensure we attract and retain top talent. We believe we offer competitive and comprehensive compensation and benefits packages that include access to financial, health and wellness programs, a matched 401(k) plan, short-term and long-term incentive plans, medical, dental, and vision insurance coverage, and paid time off for holidays, sick leave, and vacation. We continue to survey and update our pay structure to stay competitive with our peers. Our compensation packages are reviewed annually by Meridian and Korn Ferry Compensation Consulting firms, which are leading independent global compensation consultants.
Sustainability and ESG
Sustainability is a central component of our ESG corporate strategy, including continued focus on the Company’s impact on the environment, and relationships with Traditional Owners, key stakeholders and employees. As an energy company with assets in the pre-development stage, we have the opportunity to integrate environment, community and social matters into the center of what the Company delivers. By focusing on the sustainable development of our Beetaloo natural gas project, we aim to grow local jobs, strengthen communities and deliver a positive social impact. We are committed to respecting the unique environment in the Northern Territory and working closely with the local communities to understand their diverse views on development and the impact on the environment. To highlight the importance of Sustainability and ESG, the Company has a Six-Pillar Sustainability Plan, which includes: (i) Community: Partnering with local and host communities to share value through the creation of local jobs and business opportunities; (ii) Climate Change: Playing an effective role in the transition to a lower carbon economy through the production of low CO2 natural gas resources (primarily through committing to equity net zero Scope 1 and 2 emissions and integrating renewable energy and carbon offsets into developments); (iii) Environment: Applying technologies to minimize environmental impacts; (iv) Health and Safety: Prioritizing the health and safety of people; (v) People: Aiming to attract, develop and retain an inclusive, and competent workforce; and (vi) Economic Sustainability: Generating economic growth and value for investors, employees, customers and communities. The Safeguard Mechanism (legislation.gov.au) provides regulations that shale gas facilities will have a “zero baseline” meaning they must have Net Zero Scope 1 emissions by law.
Environmental Matters and Regulation
We are, and our future operations will be, subject to various stringent and complex international, foreign, federal, state and local environmental, health and safety laws and regulations governing matters including the emission and discharge of pollutants into the ground, air or water; the generation, storage, handling, use and transportation of regulated materials; and the health and safety of our employees, which are subject to change from time to time. These laws and regulations may, among other things:
•require the acquisition of various approvals and permits before drilling or other regulated activities commence;
•enjoin some or all of the operations of facilities deemed not in compliance with permits or approvals;
•restrict the types, quantities and concentration of various substances that can be released into the environment in connection with natural gas drilling, production and transportation activities;
•limit or prohibit drilling activities in certain locations lying within protected or otherwise sensitive areas; and
•require remedial measures to mitigate pollution from our operations.
These laws and regulations may also restrict the rate of natural gas production below the rate that would otherwise be possible. Compliance with these laws can be costly; the regulatory burden on the natural gas industry increases the cost of doing business in the industry and consequently affects profitability.
Moreover, public interest in climate change and the protection of the environment has increased in recent years. Drilling in some areas has been opposed by activists, including environmental groups, and, in some cases, been restricted. Our operations could be adversely affected to the extent laws are enacted or other governmental action is taken that
prohibits or restricts offshore drilling or imposes environmental requirements that result in increased costs to the natural gas industry in general, such as more stringent or costly waste handling, disposal or cleanup requirements.
Regulatory Framework
The following is a summary of the more significant existing onshore gas laws, as amended from time to time, to which our business operations are or may be subject and for which compliance may have a material adverse impact on our capital expenditures, results of operations or financial position.
Many of these laws require us to obtain permits or other authorizations from state and/or federal agencies before initiating exploration, certain drilling, construction, production, operation, or other natural gas activities, and to maintain these permits and compliance with their requirements for on-going operations. These permits are generally subject to protest, appeal, or litigation, which can in certain cases delay or halt projects and cease production or operation of wells, pipelines, and other operations.
Regulation of our Exploration Activities
The Petroleum Act requires Tamboran to hold EPs in all areas where its exploration activities are proposed. The Petroleum Act is the principal legislation dealing with petroleum exploration and production activities onshore and in the territorial waters of the Northern Territory (“NT”). In particular, the Petroleum Act provides the legal framework for: (i) the grant of permits for exploration, production, and ancillary activities associated with exploiting petroleum, (ii) the renewal or transfer of those permits, (iii) the promotion of active exploration for petroleum, and (iv) the appraisal of discoveries and of the development of petroleum production if commercially viable by persons granted production licenses. Further, the Petroleum Act provides for the assessment of proposed technical works programs for the exploration, appraisal, recovery or production of petroleum, including an assessment of the financial capacity of persons proposing to carry out those programs. The Petroleum Act provides for ministerial directions regarding resource management, approval of activity and infrastructure plans before production, audit activities by regulators, and includes a financial assurance framework that encompasses environmental securities, monitoring and compliance levies and an orphan well levy.
The objectives of the Petroleum Regulations 2020 (NT) (“Petroleum Regulations”) are to provide for land access agreements between interest holders and the owners or occupiers of land covered by petroleum interests, to support and enhance the integrity of onshore petroleum wells, petroleum surface infrastructure by ensuring that risks are reduced to as low as reasonably practicable, and the strategic management of petroleum production. In accordance with the Petroleum Regulations, Tamboran is required to enter into land access agreements with the owners or occupiers of the land on which it conducts its activities before it conducts regulated operations. The Petroleum Regulations govern the minimum conditions of entry into these access arrangements with the owners or occupiers. The Petroleum Regulations also prescribe the fees Tamboran must pay relating to the general administration of its petroleum titles, including fees for the grant, renewal and variation of EPs, retention licenses and production licenses.
The object of the Petroleum (Environment) Regulations 2016 (NT) (“Petroleum Environment Regulations”) is to ensure that regulated activities are carried out in a manner that is consistent with the principles of ecologically sustainable development, and by which the environmental impacts and risks of the activities will be reduced to a level that is as low as reasonably practicable and acceptable. The Petroleum Environment Regulations require the preparation of environment management plans for regulated activities and mandates such plans be approved by the Minister. Tamboran, as the permit holder, has environment management plans (“EMP”) in place in respect of all its regulated activities. These activities include conducting seismic surveys, the construction, operation, modification, decommissioning, dismantling or removal of a wells or other facilities, drilling, hydraulic fracturing, the release of contaminants or waste, and the storage and transportation of petroleum and hazardous waste. Tamboran’s EMPs are publicly available on the NT Government Department of Lands, Planning and Environment website www.environment.nt.gov.au/onshore-gas/environment-management-plan/approved-emps. The EMPs describe how our regulated activities might impact the environment in which the activity occurs and establishes Tamboran’s obligations to ensure those impacts are managed to an environmentally acceptable level. Civil and criminal penalties apply under the Petroleum Environment Regulations for conduct which results in a contravention of an EMP, as well as for undertaking regulated activity for which there is no approved EMP.
The Petroleum Environment Regulations contain record-keeping and reporting requirements. Specifically in relation to our hydraulic fracturing activities, Tamboran is required to provide the Minister with a report about flowback fluid within six months of the flowback occurring. This report must contain a full human health risk assessment relating to any chemical found in the flowback fluid or water produced. Reporting is also required for incidents arising from regulated activities that have or have the potential to cause material environmental harm. Failure to comply with these reporting requirements may result in significant financial penalties.
The Code of Practice: Onshore Petroleum Activities in the NT (the “Code of Practice”) provides minimum standards that the onshore petroleum industry in the Northern Territory must adhere to. The Code of Practice applies to all of Tamboran’s regulated activities including those associated with both unconventional gas and exploration, appraisal and production activities. Tamboran’s Well Drilling, Hydraulic Fracture Stimulation and Well Testing EMPs must demonstrate compliance with the Code of Practice and will not be approved or renewed if they are not compliant with the requirements of the Code of Practice.
The Petroleum Royalty Act 2023 (NT) (“Royalty Act”) imposes a royalty rate, paid to the NT Government, for petroleum produced from a project area of 10% of the gross value of the petroleum at the well head (including petroleum produced from a production project area that is used or lost through venting or flaring or other means, but excluding petroleum used by the licensee for incidental purposes, petroleum used in the project area for processing or compression, or preparing petroleum for sale, petroleum returned or reinjected into a natural reservoir in the project area from which it was extracted/recovered, and petroleum produced from an exploration project area that is used or lost through venting or flaring or other means). “Petroleum” means a naturally occurring hydrocarbon, whether in gaseous, liquid or solid state.
As onshore gas extraction moves toward production in the Northern Territory, there could be an increased risk of litigation in the form of challenges to Ministerial approvals of EMPs, which could lead to costs and delays with respect to regulated activities. The failure to comply with record-keeping and reporting requirements of the Petroleum Environment Regulations can also attract financial penalties. Tamboran’s competitors in the Northern Territory are subject to the same risks and requirements that affect Tamboran’s operations.
Regulation of GHG Emissions
The National Greenhouse and Energy Reporting Act 2007 (Cth) (“NGER Act”) establishes the legislative framework for reporting GHG emissions, greenhouse gas projects and energy consumption and production by corporations in Australia. The objects of the NGER Act are to introduce a single national reporting framework for the reporting and dissemination of information related to greenhouse gas emissions, greenhouse gas projects, energy consumption and energy production of corporations and to contribute to the achievement of Australia’s greenhouse gas emissions reduction targets. Under the NGER Act, Tamboran will report Scope 1 GHG emissions from its operations to the Australian Government’s Clean Energy Regulator (CER). Furthermore, the Safeguard Mechanism, a legislative instrument sitting under the NGER Act, is designed to reduce emissions from large industrial facilities. It sets legislated limits, known as baselines, on the greenhouse gas emissions of certain facilities. The Safeguard Mechanism applies to industrial facilities emitting more than 100,000 tonnes of CO2-e per year and requires that all emissions form the Beetaloo be offset with Australian Carbon Credit Units or Safeguard Mechanism Credits once the 100,000 tonnes CO2-e trigger is exceeded.
The Safeguard Mechanism requires that all Beetaloo facilities covered by the Safeguard Mechanism have Net Zero Scope 1 emissions. Accordingly, the Safeguard Mechanism will apply to Tamboran. Tamboran’s ability to achieve Net Zero Scope 1 emissions will depend on it being able to economically manage its carbon emissions, which could, for example, be impacted by availability of future revenues to fund various carbon initiatives, market pricing of carbon offsets, technological developments affecting operations and costs of implementing sustainable practices. Under the Safeguard Mechanism, upon exceeding the 100,000 tonnes CO2-e trigger in a given fiscal year, all Scope 1 emissions in that fiscal year are required to be offset. The Australian Federal Government has established an A$82.68 carbon offset price cap for FY26. The offset price cap increases by CPI plus 2% each year. While we are unable to predict the future costs or impact of compliance with the Safeguard Mechanism, we do have established procedures for the ongoing evaluation of our operations to identify costs, potential exposures and to track compliance with this legislation.
On April 17, 2018, the NT Government announced that it accepted all 135 of the recommendations set out in The Scientific Inquiry into Hydraulic Fracturing in the Northern Territory. The implementation of the recommendations has resulted in a more rigorous regulatory regime by placing additional obligations on oil and gas companies including the introduction of a stricter code of practice for decommissioning onshore shale gas wells, requiring tenement holders to provide a non-refundable levy prior to granting any further production approvals and introducing no go zones where a person cannot explore or drill for petroleum resources.
Although it is not possible at this time to predict how new laws or regulations in Australia that may be adopted or issued to address GHG emissions would impact our business, any such future laws, regulations or legal requirements imposing reporting or permitting obligations on, or limiting emissions of GHGs from, our equipment and operations could require us to incur costs to comply with new requirements and to reduce emissions of GHGs associated with our operations as well as delays or restrictions in our ability to permit GHG emissions from new or modified sources. In addition, substantial limitations on GHG emissions could adversely affect demand for natural gas we aim to produce.
Regulation of Environmental and Occupational Safety and Health Matters
Our operations are subject to stringent Australian Federal Government and territory laws and regulations governing occupational safety and health aspects of our operations, the discharge of materials into the environment and the protection of the environment and natural resources (including threatened and endangered species and their habitat and certain other protected sites). Numerous governmental departments have the power to enforce compliance with these laws and regulations and the permits issued under them, often requiring difficult and costly actions.
These laws and regulations may, among other things (i) require the acquisition of permits to conduct drilling and other regulated activities; (ii) restrict the types, quantities and concentration of various substances that can be released into the environment or injected into formations in connection with natural gas drilling and production activities; (iii) limit or prohibit drilling activities on certain lands lying within wilderness, wetlands and other protected areas; (iv) require remedial measures to mitigate pollution from former and on-going operations, such as specific waste removal requirements; (v) apply specific health and safety criteria addressing worker protection; and (vi) impose substantial liabilities for pollution resulting from drilling and other regulated activities. Any failure to comply with these laws and regulations may result in the assessment of administrative, civil and criminal penalties, the imposition of corrective or remedial obligations, the occurrence of delays or restrictions in permitting or performance of projects, and the issuance of orders enjoining performance of some or all of our operations.
These laws and regulations may also restrict the rate of natural gas production below the rate that would otherwise be possible. The regulatory burden on the natural gas industry increases the cost of doing business in the industry and consequently affects profitability. The trend in environmental regulation has been to place more restrictions and limitations on activities that may affect the environment, and thus any changes in environmental laws and regulations or re-interpretation of enforcement policies that result in more stringent and costly well drilling, construction, completion or water management activities, or waste handling, storage transport, disposal, or remediation requirements could have a material adverse effect on our financial position and results of operations. We may be unable to pass on such increased compliance costs to our customers once we commence production. Moreover, accidental releases or leaks may occur in the course of our operations, and we cannot assure you that we will not incur significant costs and liabilities as a result of such releases or spills, including any third-party claims for damage to property, natural resources or persons. The cost of continued compliance with existing requirements is not expected to materially affect us. However, there is no assurance that compliance costs will remain the same in the future for such existing or any new laws and regulations or that costs related to such future compliance will not have a material adverse effect on our business and operating results.
The following is a summary of the more significant existing and proposed environmental and occupational safety and health laws, as amended from time to time, to which our business operations are or may be subject and for which compliance may have a material adverse impact on our capital expenditures, results of operations or financial position.
Any of our activities which have the potential to cause a significant impact to the environment are required to be referred to the NT Environment Protection Authority (“ NT EPA”) for assessment under the Environment Protection Act 2019 (NT) (“Environment Protection Act”). Tamboran has completed a self-assessment for its current environmental impact and considers its potential environmental impact to not be significant. However, it is anticipated that future developments by Tamboran could trigger a referral to, and assessment by, the NT EPA, and require Tamboran to obtain approvals under the Environment Protection Act (an “Environmental Approval”) to conduct the activity. Civil proceedings could be brought by any person who is affected by an alleged act or omission that contravenes the Environment Protection Act. Contraventions of an Environmental Approval can attract penalties currently ranging from $67,760 to $3,386,240. Contravention can also result in revocation of the Environmental Approval.
The Environment Protection Act was amended to introduce environmental chain of responsibility provisions. Environmental chain of responsibility laws are a regulatory approach that has been developed to protect the Australian government and taxpayers from inheriting financial liabilities that arise when Environmental Approval holders for petroleum activities contravene statutory compliance obligations, such as the costs associated with cleaning up environmental damage, by redirecting liability to a related person with a relevant connection who may not have otherwise been liable (depending on the circumstances, such as directors, shareholders and associated entities). A petroleum activity is an activity for which an EP, retention license or production license is required. The chain of responsibility amendment permits a compliance notice to be issued to a related person with a relevant connection to a high risk entity conducting a petroleum activity. For corporations, contraventions of a relevant notice can attract a fine of between A$67,760 and A$3,386,240 (based on current penalty unit amounts) depending on the intentions and recklessness in contravening the notice and the severity of harm to the environment caused by failure to comply.
The Environment Protection and Biodiversity Conservation Act 1999 (Cth) (“EPBC Act”) is Australia’s primary federal environmental legislation, which provides for the protection and conservation of matters of national environment significance (“MNES”) and heritage. This includes the protection and management of national and internationally important plants, animals, habitats and places. The objects of the EPBC Act are to promote ecologically sustainable development through the conservation and ecologically sustainable use of natural resources, the conservation of biodiversity and co-operative approach to the protection and management of the environment involving governments, the community, landholders, and Indigenous peoples. Any person who proposes to take an action which involves a coal seam gas development or a large coal mining development that will have, or is likely to have, a significant impact on a water resource is required to submit a referral to the Australian Government Department of the Environment for a decision by the Minister on whether assessment and approval is required for that action under the EPBC Act. We have completed self-assessments as part of certain EMP applications to determine whether an MNES is likely to be impacted by the proposed activities and concluded that significant impacts to water resources and other MNES are not anticipated to occur. However, it is anticipated that any future development could require referral and assessment under the EPBC Act.
The Water Act 1992 (NT) (“Water Act”) controls and licenses the taking of groundwater for petroleum operations and the disposal of hydraulic fracturing waste. Specifically, the Water Act provides for the investigation, allocation, use, control, protection, management and administration of water resources in the Northern Territory and imposes restrictions and strict controls with respect to the discharge of pollutants, including spills and leaks of hazardous substances. The Water Act requires Tamboran to obtain permits to extract groundwater for petroleum operations and controls the contact of hydraulic fracturing waste with water that is not contained in the geologic formation target by the process of hydraulic fracturing. It also prohibits taking surface water and releasing wastewater into surface water. Tamboran has obtained a Water Extraction License “WEL GRF 10285 (450 ML/year)” (WEL) and Sweetpea Petroleum also has a Water Extraction License “WEL GRF 10346 (299 ML/year)” covering previous water usage for exploration activities over specific parcels of land in the Northern Territory. WELs are renewed periodically to support operational activities. The WEL will be increased to cover the future proposed exploration activities.
The Waste Management and Pollution Control Act 1998 (NT) (“Waste Management Act”) governs the management of waste and pollution prevention and control practices for related purposes. Tamboran is required to store, transport and dispose of waste in compliance with the requirements of the Waste Management Act. For instance, the transportation and disposal of waste may only be completed by a licensed contractor and at a licensed disposal facility. Any interstate disposal should be completed with an approved consignment authority. The Waste Management Act does not apply in relation to a contaminant or waste that results from, directly or indirectly, the carrying out of a petroleum exploration activity or petroleum extraction activity by a person on land on which the activity is authorized under the Petroleum Act, and where that contaminant or waste is confined within the land on which the activity is being carried out. Where any contaminant or waste is not confined within the land on which the activity is being carried out, the Waste Management Act imposes certain duties on Tamboran to take all measures that are reasonable and practicable to prevent or minimize pollution or environmental harm and reduce the amount of the waste, if it conducts an activity or performs an action that causes or is likely to cause pollution resulting in environmental harm or that generates or is likely to generate waste. We currently own, lease, or operate numerous properties that have been used for natural gas exploration for many years. Although we believe that we have utilized operating and waste disposal practices that were standard in the industry at the time, hazardous substances, waste, or petroleum hydrocarbons may have been released on, under, or from, the properties owned or leased by us, or on, under, or from, other locations, including offsite locations, where such substances have been taken for treatment or disposal. In addition, some of our properties have been operated by third parties or by previous owners or operators whose treatment and disposal of hazardous substances, waste, or petroleum hydrocarbons were not under our control. These properties and the substances disposed or released on, under or from them may be subject to the Environment Protection Act and analogous laws. Under such laws, we could be required to undertake corrective measures, which could include removal of previously disposed substances and waste, cleanup of contaminated property, or performance of remedial plugging or pit closure operations to prevent future contamination, the costs of which could be substantial.
The Work Health and Safety (National Uniform Legislation) Act (NT) 2011 (“WHS”) seeks to secure the health and safety of workers and workplaces imposing general duty of care obligations, seeking the elimination or minimization of risks arising from work or from specified types of substances or plant, providing for workplace representation and consultation in relation to work health and safety, encouraging organizations to take a constructive role in work health and safety practices, promoting the provision of advice and training and providing for compliance and enforcement measures. Tamboran has a Safety Management Plan that outlines how it achieves the requirements of the WHS in relation to its activities. This includes the management of chemical storage dossiers, safety data sheets and appropriate procedures and controls to prevent worker exposure to hazards.
The Bushfires Management Act 2016, amongst other things, establishes bushfire fuel management programs and prohibits certain activities during high fire risk periods to prevent the outbreak and spread of bush fires. During total fire ban periods, Tamboran is prohibited from undertaking flaring and is required to obtain a permit for flaring to take place during declared fire danger periods. This could lead to costs and delays with respect to Tamboran’s regulated activities. In accordance with the Code of Practice: Onshore Petroleum Activities in the NT, Tamboran is required to maintain a Bushfires Management Plan which includes bushfire preventative and response measures.
The Northern Territory Aboriginal Sacred Sites Act 1989 (NT) (“Sacred Sites Act”) establishes a procedure for the protection and registration of Aboriginal sacred sites, provides for entry onto sacred sites and the conditions to which such entry is subject, and establishes a procedure for the avoidance of sacred sites in the development and use of land. The Sacred Sites Act establishes the Aboriginal Areas Protection Authority (“AAPA”) for the purposes of administering the Sacred Sites Act and a procedure for the review of decisions of the AAPA by the Minister. Tamboran conducts detailed sacred sites assessments with traditional owners prior to conducting any activities and applies to the AAPA for Authority Certificates. These assessments are typically designed to identify sacred places, such as dreaming tracks, song lines, and women’s business places, which must be protected. The locations of sacred sites are indicated on maps and Tamboran may not conduct activities that could disturb sacred sites without first obtaining clearance and authorization from the traditional owners. An Authority Certificate can be issued by the AAPA under the Sacred Sites Act where it is satisfied that in relation to an application, the work or use of the land could proceed or be made without there being a substantive risk of damage to or interference with a sacred site on or in the vicinity of the land, or an agreement has been reached between the custodians and the applicant. Subject to the conditions (if any) of the Authority Certificate, the holder of the Authority Certificate may enter and remain on that or those parts of the land and carry out the work proposed in the application. Due to long distance direction drilling giving flexibility as to drilling pad locations, we consider that the presence of sacred sites should not interfere with future production.
The Heritage Act 2011 (NT) (“Heritage Act”) provides for the conservation of the Northern Territory’s cultural and natural heritage. Specifically, the Heritage Act provides for the protection of Aboriginal, European and Macassan archaeological places and archaeological objects. Any interference with an archaeological place or object is strictly regulated under the Heritage Act.
The Native Title Act 1993 (Cth) (“Native Title Act”) recognizes and protects native title by providing that native title cannot be extinguished contrary to the Native Title Act. The objects of the Native Title Act are to provide for the recognition and protection of native title, establish ways in which future dealings affecting native title may proceed and to set standards for those dealings and mechanisms for determining claims to native title and to provide for, or permit, the validation of past acts, and intermediate period acts, invalidated because of the existence of native title. The Right to Negotiate with Native Title Owners are the most relevant provisions of the Native Title Act to Tamboran’s operations. The Right to Negotiate process was applied to the grant of Tamboran’s explorations permits, resulting in Section 31 Agreements which provide for the consent of traditional owners for its activities. The traditional owners are and continue to be represented by the Native Land Council (“NLC”) in respect of the Agreements. Tamboran continues to implement EPs in collaboration with the NLC, with all work programs being reviewed and approved by traditional owners.
Aboriginal Land Rights (Northern Territory) Act 1976 (Cth) (“ALRA”) applies to the Northern Territory and provides for the grant of certain land as Aboriginal land and the protection of sacred sites. Under ALRA the exploration for, and production of, petroleum on Aboriginal land is subject to a regime of consent being required by traditional Aboriginal owners of the land and subject to agreements being entered into with the relevant land council representing the traditional Aboriginal owners.
Compliance with the above regulations and their requirements has the potential to delay the development of natural gas projects and increase our costs of development and production, which costs could be significant. In addition, our failure to comply with any of the regulatory obligations could subject us to monetary penalties, injunctions, conditions or restrictions on operations and criminal enforcement actions.
Other Facilities
Our corporate headquarters are located at Suite 01, Level 39, Tower One, International Towers Sydney, 100 Barangaroo Avenue, Barangaroo NSW 2000, and our telephone number at such address is +61 (2) 8330-6626. Our corporate headquarters and field office facilities are leased, and we believe that they are adequate for our current needs.
Operating Hazards and Insurance
Natural gas operations are subject to many risks, including well blowouts, craterings, explosions, uncontrollable flows of oil, natural gas or well fluids, fires, pipe, casing or cement failures, abnormal pressure, pipeline leaks, ruptures or spills, vandalism, pollution, releases of toxic gases, adverse weather conditions or natural disasters and other environmental hazards and risks.
In accordance with industry practice, we maintain insurance against some, but not all, of the operating risks to which our business is exposed. We cannot provide assurance that any insurance we obtain will be adequate to cover our losses or liabilities or that such coverage will continue to be available, or available on acceptable terms or at acceptable rates. We have elected to self-insure for certain items for which we have determined that the cost of available insurance is excessive relative to the risks presented. In addition, certain pollution and environmental risks are not fully insurable. The occurrence of an event not fully covered by insurance could have a material adverse effect on our financial position, results of operations and future cash flows.
Title to Properties
Under the Petroleum Act, all petroleum on or below the surface of land within the NT is and shall be deemed always to have been the property of the Crown (as described in the Petroleum Act). The property in petroleum produced from a well on an area to which a petroleum interest relates passes to the interest holder at the wellhead (and a royalty is payable by the interest holder to the Crown). Petroleum interests under the Petroleum Act primarily take the following forms: Exploration Permits, Retention Licenses and Production Licenses.
Exploration Permits
Rights to conduct natural gas exploration within the Northern Territory are based on EPs. An EP grants the holder the exclusive right to explore for petroleum and to carry on such operations and execute such works as are necessary for that purpose, in the exploration permit area. This includes the rights to carry out the technical works program and other exploration for petroleum in the exploration permit area. Activities under an EP are subject to any conditions imposed on the permit by the Minister.
During the EP(A) phase, the permit holder consults with government authorities and the appropriate native title holders for the area (if there is native title land) and/or traditional owners (where the land is Aboriginal Land) in a negotiation process that determines the terms upon which the native title holders will consent to the grant of the license, including the amount of financial compensation that the permit holder will provide to the native title holders/traditional owners during the exploration period. The negotiations over Aboriginal Land are facilitated by the government regulatory body, in this case the Northern Land Council, who is responsible for assisting Aboriginal People in the Northern Territory to manage their traditional lands. After an agreement is reached, which often takes between 3-5 years, the permit holder provides a work program and may receive an EP under which the permit holder has three five-year periods in which to meet or amend its obligations proposed under the EP.
The Petroleum Act requires an EP holder to notify the Minister as soon as possible of a discovery of petroleum within a permit area and within three days provide the particulars of the discovery. Upon discovery of a commercially exploitable petroleum discovery, the permit holder will enter into further discussions with local native title holders (if native title land) (including traditional owners) to enter into an agreement which satisfies the requirements of the Native Title Act that, among other things, determines the royalty payments to the local traditional owners. Where the Minister is satisfied that the petroleum resources are potentially of a commercial quality and quantity, a permit holder is entitled to apply for either: (a) a production license, in relation to the whole or part of its EP if the discovery is an accumulation of petroleum that is commercially able to be immediately exploited; or (b) one or more retention licenses.
Production Licenses
An EP holder is entitled to apply for a production license if a commercially exploitable petroleum discovery is made. An application for a production license is required to include certain information regarding the license area, a proposed technical works program for the proposed license area and evidence that the applicant has the appropriate technical and financial capability.
A production license under the Petroleum Act is a statutory right which constitutes personal property. A production license (or an interest in a production license) may be transferred with the approval of the Minister and is capable of being given as security for financial accommodation or other commitments. There are processes and limits related to the
Minister’s ability to terminate the production license before the expiry of its term due to a default of the production license holder and the production license cannot be compulsorily acquired by the Northern Territory or the Australian Federal Government without the payment of just terms compensation to the license holder.
A production license holder has exclusive rights to explore for petroleum, recover it from the license area, and to carry out such operations in the license area as are necessary for the exploration for, and recovery of, petroleum. The Minister may grant the production license subject to such conditions as the Minister deems appropriate and may direct the holder of a production license to maintain, increase or reduce the rate of recovery of petroleum from the area.
A production license may be granted for an initial term of 21 or 25 years and may be renewed.
Retention Licenses
A retention license grants the licensee the exclusive right to carry on in the license area such geological, geophysical, and geochemical programs and other operations and works, including appraisal drilling, as reasonably necessary to evaluate the prospective resources in the license area. Where the Minister has received an application for a retention license and is satisfied that the applicant has complied with the requirements of the Petroleum Act the Minister will decide whether to grant or refuse to grant the retention license.
The initial term of a retention license is five years and may be renewed for subsequent periods, subject to the Minister’s approval.
Conditions of EPs Granted under the Petroleum Act
An EP is granted subject to conditions that the EP holder must comply with, including meeting minimum work obligations and conducting all operations with reasonable diligence and in accordance with good oilfield practice and the approved technical work program. Each Instrument of Grant for each of EP 76, EP 98, EP 117, EP 136, EP 143 and EP 161 contains standard conditions, including as follows:
•Condition 5 of each Instrument of Grant provides that “the permittee shall indemnify and hold indemnified at all times the Territory and its servants and agents from claims, actions, suits and demands whether debt, damages, costs or otherwise arising out of a breach of the duties and obligations, whether express or implied, of the permittee at common law, or of the Claim or of any law in force in the Territory that is applicable and whether such breach shall be that of the permittee or any of its subcontractors, servants, employees or agents”;
•Condition 10 of each Instrument of Grant allows “the Minister to require, at any time, the title holder to provide security in the form and for the amount that the Minister thinks fit for the purpose of securing the title holder’s performance of its obligations under the relevant EP, to secure the permittee’s compliance with these permit conditions and/or for securing the payment by the permittee compensation that may be payable for the effect of the grant, renewal or variation of the permit on native title rights and interests”; and
•each Instrument of Grant also provides that “the title holder must not commence any seismic survey or drilling of a well unless the Minister is provided with the relevant details (including the geographic position of the well or area of the seismic survey) and the necessary approval has been obtained from the Minister.”
Variation, Suspension or Waiver of a Condition of an EP
An EP holder may lodge an application for a variation, suspension or waiver of a condition of an EP. Under the guidelines “Criteria for Assessment of Petroleum Exploration Permit Applications” issued by the Department of Industry Tourism and Trade, an application to suspend, extend, waive or vary EP conditions is required to be submitted within three months prior to expiry of the current work program year. Generally, work programs cannot be reduced by a variation. All variations are subject to the discretion of the Minister and are considered on a case-by-case basis.
An EP holder may apply to the Minister to suspend and extend the period for completing the permit holder’s work program commitments.
A suspension will defer the end date of a current permit year but will not change the end date of subsequent permit years. A suspension and extension will defer the end date of the current permit year and all subsequent permit years. Where a condition of an EP is suspended the Minister may extend the term of the permit by a period not exceeding the period of
the suspension. The terms of each of the EPs have previously been extended via applications to the Minister for suspension and extension of the dates for completion of the minimum work program obligations.
Ministerial Approval in Relation to Dealings and Transfers
Any instrument by which a legal or equitable interest in or affecting an existing or future EP is or may be created, assigned, affected or dealt with, whether directly or indirectly must be approved by the Minister and an entry made in the Public Register in order to be effective.
Statutory Annual Fees
An EP holder is required to pay an annual fee in relation to each EP. There are no outstanding annual fees payable in respect of the EPs.
Term and Renewals of the Exploration Permit
An EP remains in force for a five-year term commencing on the day on which it was granted or last renewed. An EP may be renewed for a maximum of two subsequent terms.
An application for renewal must, amongst other things, be in an approved form and manner and be accompanied by a report specifying the permittee’s restoration and rehabilitation plan of the land with respect to the blocks that may be affected by the permittee’s operations. The Minister will not accept an application for renewal of an EP if an application is received after expiration of the permit.
As part of the Minister’s decision to renew an EP, the Minister may reduce the number of blocks in respect of which the permit is in force. If the Minister proposes to act in this way, the Minister must issue a notice to the permittee inviting the permittee to make a submission regarding the reduction (within the period specified in the notice). A title holder seeking a renewal can apply for an exemption, for a period not exceeding 12 months, from the requirement to reduce the number of blocks in a renewal application. An exemption may provide for: (a) a deferral of the reduction in the permit area; or (b) a reduction in the permit area by a lesser number of blocks.
The Minister may refuse to renew the permit where an EP holder has not complied with the Petroleum Act, any directions, or the conditions to which the EP is subject, or the Minister is not satisfied that circumstances exist to justify the renewal of the permit.
Surrender of a Permit
A permittee may apply to surrender all or part of a permit area, subject to the requirements of the Petroleum Act. The Petroleum Act provides that an application for surrender of all or part of a permit area may not be made unless: (a) all operations carried on in the proposed surrender area have ceased; (b) all of the environmental outcome required under the Petroleum Act or another Act, including remediation and rehabilitation of land (including affected adjacent land), have been met; and (c) any approved environment management plan that applied in relation to the proposed surrender area ceases to be in force in relation to the proposed surrender area.
The Minister may require that further conditions be complied with before accepting a surrender, or where the Minister is satisfied that the circumstances justify the acceptance of a surrender, accept a partial surrender where the retained area is not one discrete area, or is less than the minimum allowable size.
EP Conditions
Each EP is subject to minimum work obligations. Except for EP(A) 197, each EP contains specific minimum work obligations. The minimum work obligations for EP(A) 197 will be agreed between Sweetpea and the NT Government prior to grant of the EP. The minimum work obligations in respect of the EPs that need to be completed in the near future include:
•EP 76: that between May 31, 2023 and May 30, 2026 the following work is completed with an estimated expenditure of A$750,000: (a) formation evaluation of acquired data and integration of new core data into exploration models; (b) static and dynamic reservoir modelling based on updated petrophysical and geological models; and (c) geological and geophysical studies;
•EP 98: that between May 31, 2023 and May 30, 2026 the following work is completed with an estimated expenditure of A$73,750,000: (a) drill, complete and suspend one horizontal exploration well; (b) drill and hydraulic fracture stimulate three horizontal exploration/appraisal well; (c) LiDAR, 2D seismic (test line), and 3D seismic surveys; and (e) formation evaluation of acquired data;
•EP 117: that between May 31, 2023 and May 30, 2026 the following work is completed with an estimated expenditure of A$32,250,000: (a) drilling one vertical (pilot) well and side-track one horizontal multistage fracture stimulated well; (b) formation evaluation of acquired data; (c) further static and dynamic reservoir modelling; and (d) LiDAR and 3D seismic surveys;
•EP 136: that between July 24, 2024 and July 23, 2025 the following work is completed with an estimated expenditure of A$250,000: (a) planning, design and operational readiness for drilling and hydraulic fracture stimulate one horizontal well;
•EP 143: that between April 5, 2023 and December 31, 2026 the following work is completed with an estimated expenditure of A$3,300,000: (a) performing geological and geographical studies and integration of 2D seismic data; (b) assessing commercialization opportunities; (c) conducting desktop baseline environmental assessments; (d) preparing and commencing negotiations of land access; (e) designing and planning for 125km of 2D seismic survey; (f) finalize land access agreement for regulated activities; and (g) acquired, process and interpret 100km of 2D seismic data;
•EP 161: that between March 21, 2023 and March 20, 2026 the following work is completed with an estimated expenditure of A$12 million: (a) acquiring processing and interpreting 190km of 2D seismic data; (b) drill 2 two (2) vertical exploration wells; and (c) geological and geophysical studies.
A failure to comply with these conditions may result in the Minister: (a) cancelling the permit in relation to any or all of the blocks the subject of the permit; or (b) refusing an application for renewal of the Tenement.
If these obligations are not able to be met by the required dates, the Company may be able to apply to the Minister to request that the work program be varied in accordance with the process described in the “Variation, Suspension or Waiver of a Condition of an EP” section above. However, a variation may not necessarily be granted.
Overlapping Tenements
Generally, the existence of overlapping tenure in respect of the different types of resources governed by separate statutes is expected and not uncommon in the Northern Territory. The same land shares different use and may contain concurrent extraction rights. For example, Tamboran owns petroleum extraction rights in the Beetaloo, but there are also multiple pastoral leaseholders who lease the rights to graze livestock on the surface. Additionally, there are various mineral rights such as precious metal (gold, silver) and base metal (iron ore, copper, nickel) rights overlayed in the Beetaloo, along with deep geothermal rights, sand and aggregate mining rights.
The Northern Territory legislative regime does not prescribe a general order of precedence or priority of any particular form of tenure over another. Instead, there are general obligations in the Mineral Titles Act 2010 (NT) that the holder of an EP must conduct authorized activities in relation to the title area in a way that interferes as little as possible with the rights of other occupiers of land in the vicinity of the title area. Furthermore, the Energy Pipelines Act 1981 (NT) imposes restrictions on people undertaking certain works within the vicinity of a pipeline including crossing it with certain machinery or detonating explosives in the region. Additionally, the Geothermal Energy Act 2009 (NT) imposes an obligation on the holders of geothermal titles to consult with the petroleum title holders before conducting geothermal activities on land that is subject to mining or petroleum titles. The Petroleum Act provides that the Minister must not grant an EP over an area that is already the subject of another EP or a license. Aside from the requirement that EPs and other petroleum permits cannot overlap, the Petroleum Act is silent on the question of overlapping tenements with respect to non-petroleum permits, other than that it provides for exclusivity of interest to the title holder. Each of our EPs were issued under the Petroleum Act. If there is any doubt as to whether an activity proposed to be carried out on the tenements will interfere with the rights of another permit holder, an appropriate consultation process will need to take place with the relevant titleholder.
Unit Development
If the Minister is satisfied that a petroleum pool extends beyond a license area and it is desirable, for the purpose of securing economy and efficiency, that the petroleum pool should be worked as one unit, the Minister may, amongst other
things, require the licensee and the licensee of each adjacent area to enter into a scheme for registration under the Petroleum Act to work and develop the petroleum pool as one unit. Where a scheme is not furnished within the time specified or where the Minister does not approve the scheme furnished to him, the Minister must prepare a scheme and supply it to each permit holder and that scheme must be complied with. An agreement must be registered under the Petroleum Act in order to have effect. This type of agreement, similar to forced pooling or unitization, has not occurred for shale in Australia to date.
Access Authorities
An EP holder may apply for an access authority to conduct certain activities in an area outside the permit holder or licensee’s permit area. An access authority authorizes the holder to carry on in the access authority area exploration for petroleum or operations relating to the recovery of petroleum in or from the EP, license, lease or petroleum title in respect of which the application was made and any other operations specified in the access authority.
Reserved Blocks / ‘No-go Zones’
A Reserved Block (also called a “no-go zone”) is an area where a person cannot explore or drill for petroleum resources. These areas can include towns, parks, reserves and areas of high ecological value. Under the Petroleum Act, the Minister can declare that a block (not being a block in relation to which an EP or license is in force) will not be the subject of a grant of an EP or license. If there is a declaration in force in relation to a block, the Minister cannot grant an EP or license over the block. There are two Reserved Blocks that are located adjacent to the areas covered by EP 98 and EP 143, these include Reserved Block 200 and Reserved Block 85.
Reserved Block 200 was previously included within the area covered by EP 98. Reserved Block 200 is comprised of an area of 115.8 km2 and includes the entire area of the Bullwaddy Conservation Reserve. Reserve Block 200 has been relinquished from EP 98 and no longer forms part of this EP. The area of EP 143 includes the 2 km buffer around the Town of Newcastle Waters. The Reserved Block 85 is located within the buffer area comprising 0.238 km2 near the Town of Newcastle Waters. The buffer area near the Town of Newcastle Waters was always excluded from the area covered by EP 143.
Royalties under the Royalty Act
Under the Royalty Act, the Company is required to pay an overriding statutory royalty to the NT Government of 10% of the gross value (net of certain expenses), at the well-head, of all petroleum produced from our assets. The gross value of that petroleum at the well-head means the sales value of the petroleum, minus the lesser of the deductible costs of the petroleum in the royalty year and the deductible cap for the petroleum for the royalty year. The costs that constitute deductible costs are post-wellhead treatment, processing, refining, storage, transport and sales costs. The deduction cap is 75% of the sales value of petroleum. Deductible costs which exceed the deduction cap can be carried forward to be deducted in future periods.
Recent Developments
See “Item 7 - Management’s Discussion and Analysis of Financial Condition and Results of Operations-Recent Developments-Recent Developments” for further information regarding our recent developments.
Available Information
The Company’s website is www.tamboran.com. The Company’s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, can be obtained from this site at no cost. The SEC maintains a website at www.sec.gov that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.
The Company’s Corporate Governance Guidelines, Code of Business Conduct and Ethics and the charters of the Audit & Risk Management, Compensation, Nominations & Governance and Sustainability Committees are also available on the “Corporate Governance” section of the Company’s website at https://www.tamboran.com/corporate-governance-statements/. Copies of these documents are available in print to share owners upon request, addressed to the Corporate Secretary at the address above. The information on the Company’s website is not part of this or any other report that the Company files with, or furnishes to, the SEC.
Information About our Executive Officers
In the following table, the Company sets forth certain information regarding those persons currently serving as executive officers of the Company as of September 25, 2025.
Name and Age Position
Richard Stoneburner (71) Interim Chief Executive Officer and Chairman of the board of directors. Richard (Dick) Stoneburner served on the board of directors of TR Ltd. since May 2016, was named Chairman of TR Ltd. in February 2021 and Chairman of the Company in December 2023. Mr. Stoneburner was appointed as the Company’s Interim Chief Executive Officer in July 2025. Mr. Stoneburner has approximately 45 years of experience in upstream oil and gas exploration and production. Since 2013, Mr. Stoneburner has been a Partner and Senior Advisor for Pine Brook Partners, a private equity firm focusing on investments in the energy sector. Mr. Stoneburner was a Co-Founder and former President and Chief Operating Officer of Petrohawk Energy Corporation from 2003-2011 and President - North America Shale Production Division for BHP Billiton Petroleum from 2011-2012. Prior to co-founding Petrohawk in 2003, Mr. Stoneburner was Executive Vice President Exploration for 3TEC Energy Corporation and worked for several E&P companies, including Hugoton Energy Corporation, Stoneburner Exploration Inc., Weber Energy and Texas Oil & Gas. Mr. Stoneburner previously served on the board of Sitio Royalties Corp. (NYSE: STR) (formerly Brigham Minerals, Inc.; NYSE: MNRL), from 2018-2025 where it was recently acquired by Viper Energy, Inc. (NASDAQ: VNOM), a subsidiary of Diamondback Energy, Inc. (NASDAQ: FANG). He also previously served on the board of Yuma Energy, Inc. (NYSE American: YUMA) from 2014-2020 and currently serves on the boards of private companies in the oil and gas industry. Mr. Stoneburner received a Bachelor in Science in Geological Sciences from the University of Texas at Austin and a Master of Science in Geology from Wichita State University.
Eric Dyer (42) Chief Financial Officer. Eric Dyer joined TR Ltd. as Chief Financial Officer in November 2019 and has served as Chief Financial Officer of the Company since October 2023. Mr. Dyer has over 20 years of experience in finance in the energy, infrastructure, and sustainability sectors. Prior to joining the Company, Mr. Dyer worked at EAS Advisors LLC, a boutique investment bank in New York, from December 2010 to November 2019, where he served as Head of Energy. Prior to EAS Advisors, he served in various investment banking and capital markets roles with firms such as Atlantic-Pacific Capital, Execution LLC, IHS Markit Ltd. and RBC Capital Markets. Mr. Dyer received a Bachelor of Science in Finance from the University of Minnesota.
Faron Thibodeaux (64) Chief Operating Officer. Faron Thibodeaux joined TR Ltd. as Chief Operating Officer in February 2021. Mr. Thibodeaux has over 40 years of technical and operations experience in the energy industry. Mr. Thibodeaux previously worked at Apache Corporation from April 2008 to November 2020, where he ultimately held the position of Vice President of Drilling, Completions and Engineering of Apache Corporation. He was also formerly General Manager for Apache Australia and a board member of the Permian Basin Petroleum Association. Prior to working with Apache, Mr. Thibodeaux worked for Chevron. Mr. Thibodeaux received a Bachelor of Science in Petroleum Engineering from the University of Louisiana at Lafayette.

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ITEM 1A. RISK FACTORS
ITEM 1A. RISK FACTORS
Investing in our common stock involves risks. You should carefully consider the information in this report, including the matters addressed under “Cautionary Note Regarding Forward-Looking Statements,” the following risks and all of the other information set forth in this report before making an investment decision. The risks and uncertainties described below are not the only ones we face. Additional risks not presently known to us or that we currently deem immaterial may also impair our business operations. If any of the following risks actually occur, our business, financial condition and results of operations could be materially and adversely affected, and we may not be able to achieve our goals. We cannot assure you that any of the events discussed in the risk factors below will not occur. The trading price of our common stock could decline due to any of these risks, and you may lose all or part of your investment.
Risks Related to Our Business and Industry
We are an early stage development company with no material revenue expected until 2026, at the earliest. We have a limited operating history, and our future performance is uncertain. Our ability to successfully drill and complete the wells identified for our current capital plan will depend on a variety of factors.
We are an early stage development company with no material revenues or reserves currently. To date we have drilled and completed only four wells as operator. We have observed lower normalized flow rates in one well compared to other wells that we have participated in drilling in the Beetaloo. We currently only have one well that we believe based on initial flow rates is a productive well, meaning it is capable of producing sufficient quantities of gas to justify completion. Companies in the early stages of operations face substantial business risks and may suffer significant losses. We face challenges and uncertainties in financial planning as a result of the unavailability of historical data and uncertainties regarding the nature, scope and results of our future activities. In the event that our drilling program is delayed, our operating results will be adversely affected, and our operations will differ materially from the activities described in this report.
Our business strategy includes importing and successfully utilizing U.S. drilling and completion techniques to the Northern Territory. We may not be successful in implementing that strategy or in completing the development of the infrastructure necessary to conduct our business as planned. Our ability to successfully maximize the benefits of U.S. technology and techniques depends on a variety of factors, including avoiding delays in procuring equipment and the ability to attract and train employees qualified to operate with U.S. best practices. As a result, we cannot assure you that we will achieve a rate of drilling success that is in line with, or even comparable to, expectations for natural gas development in the United States.
Our business plan requires substantial additional capital, which we may be unable to raise on acceptable terms in the future, or at all, which may in turn limit our ability to execute on our plans.
We have working interests in three wells that we are currently drilling, and estimate gross expenses of approximately $30 million to drill and complete each of those wells. Our ability to raise the capital required to fund the various phases of our development plan will depend on many factors, including:
•our success in attracting third party strategic and financial partners and investors to significantly fund our midstream and LNG terminal development goals;
•the scope, rate of progress and cost of our development activities;
•natural gas prices;
•our ability to produce natural gas from our properties;
•the terms and timing of any drilling and other production-related arrangements that we may enter into;
•the infrastructure available and developed near our properties;
•the cost and timing of governmental approvals and/or concessions; and
•the effects of competition by other companies operating in the oil and natural gas industry.
We do not currently have any commitments for future external funding, and we do not expect to generate any revenue from production until mid-calendar year 2026, at the earliest, which will depend upon successful drilling results,
additional and timely capital funding, further regulatory approvals, and access to suitable infrastructure. Additional financing may not be available on favorable terms, or at all. Even if we succeed in selling additional securities to raise funds, at such time the ownership percentage of our existing stockholders would be diluted, and new investors may demand rights, preferences or privileges senior to those of existing stockholders. If we raise additional capital through debt financing, the financing may involve covenants that restrict our business activities. If we choose to farm-out interests in our property, we may lose operating control over such property.
In addition, limitations on new share issuances under ASX rules may limit or prevent us from raising additional capital by issuing and selling shares of common stock or other securities when such additional capital is required. See “Our ability to raise additional capital may be significantly limited by listing rules of the ASX that limit the amount of common stock that we are permitted to issue without stockholder approval.”
Our business plan contemplates delivering natural gas to the Northern Territory, the Australian East Coast as well as select markets in South and East Asia. Our ability to deliver natural gas in significant quantities to these markets depends on the construction of additional pipeline capacity. We cannot assure you that we will be able to secure sufficient take-away capacity on our timing or at all.
The anticipated production from our business plan will exceed the capacity of the existing pipeline infrastructure that services the Beetaloo. We cannot assure you that we will reach a mutually satisfactory agreement with APA Group for the construction of the required take-away capacity or the satisfaction to the conditions of any such obligation. The delivery of the BEC Pipeline Project will be the subject of a future development agreement and the gas transport services will be the subject of a future gas transportation agreement. The failure to contract for the construction of additional take-away capacity will adversely affect the ability to execute our proposed business plan. In addition, even if we are able to contract for sufficient take-away capacity, we may not be able to contract for gathering and compression services, storage facility capacity, and interconnections to the major pipelines.
We have no proved reserves at this time and areas that we decide to drill may not yield natural gas in commercial quantities or quality, or at all.
We presently have no proved reserves and have not sold any natural gas produced. Based on petrophysical analysis, we have identified locations and drilled appraisal wells that indicate prospective resources. However, our appraisal wells may not be indicative of future results. Additionally, the areas we have drilled, or may decide to drill in the future, may not yield natural gas in commercial quantities or quality, or at all. All of our current property is undeveloped and in various stages of evaluation that will require substantial additional seismic data reprocessing and interpretation. Accordingly, we do not know if our properties will contain natural gas in sufficient quantities or quality to recover drilling and completion costs or to be economically viable. Even if natural gas is found on our property in commercial quantities, construction costs of natural gas pipelines, associated infrastructure, and transportation costs may prevent such property from being economically viable.
Additionally, the analogies drawn by us from available data from other wells may not prove valid in respect of additional wells on our property. If a significant portion of our property does not prove to be successful, our business, financial condition and results of operations will be materially adversely affected.
We face substantial uncertainties in estimating the characteristics of our property, so you should not place undue reliance on any of our estimates.
In this report, we provide estimates of the characteristics of our properties, such as implied production volumes (including our 2.0 Bcf/d gross production goal and the normalization of initial production rates to longer lateral lengths), in the Beetaloo. These estimates may be incorrect, as the accuracy of these estimates is a function of the available data, geological interpretation and our judgment. We may not achieve our 2.0 Bcf/d gross production goal on our proposed timeline or at all, and the wells we have drilled or will drill may not achieve ultimate recoveries within the ranges we have estimated. To date, only four wells on our property have been drilled with us as an operator. Any analogies drawn by us from other wells or producing fields may not prove to be accurate indicators of the success of developing reserves from our property. Furthermore, we have no way of evaluating the accuracy of the data from analog wells or properties produced by other parties that we may use. Any significant variance between actual results and our assumptions could materially affect the quantities of natural gas attributable to any particular group of properties.
Drilling wells is speculative, often involving significant costs that may be more than our estimates, and may not result in any discoveries or additions to our future production or reserves. Any material inaccuracies in drilling costs, estimates or underlying assumptions will materially affect our business.
Exploring for and developing natural gas reserves involves a high degree of operational and financial risk, which precludes definitive statements as to the time required and costs involved in reaching certain objectives. The budgeted costs of drilling, completing and operating wells are often exceeded and can increase significantly when drilling costs rise due to a tightening in the supply of various types of natural gas field equipment and related services. Drilling may be unsuccessful for many reasons, including geological conditions, weather, cost overruns, equipment shortages and mechanical difficulties. Exploratory and appraisal wells bear a much greater risk of loss than development wells. Moreover, the successful drilling of a natural gas well does not necessarily result in a profit on investment. For example, during the drilling operations in the Shenandoah South Pilot Project, a downhole mechanical issue in SS-2H led to it being plugged and sidetracked, SS-2H-ST1, despite achieving a record horizontal section in the Mid Velkerri B Shale. Additionally, the completion operations for the SS2-4H well were paused due to detected stress in the casing connection, necessitating reinforcement activities before further stimulation activities can proceed in 2026. A variety of factors, both geological and market-related, can cause a well to become uneconomic or only marginally economic. Our initial drilling sites, and any potential additional sites that may be developed, require significant additional exploration and development, regulatory approval and commitments of resources prior to commercial development. If our actual drilling and development costs are significantly more than our estimated costs, we may not be able to continue our business operations as proposed and we would be forced to modify our plan of operation.
We intend to import and implement U.S. practices and technology for use in the development of our properties in the Northern Territory. There is limited experience with these practices and technology within the workforce in the areas we operate. The ability to attract and train a qualified workforce could hamper our present operations and limit our ability to grow.
Our operations are mechanically complex and must be performed in remote geographic locations. We believe that our success depends upon our ability to employ and retain a sufficient number of technical personnel who have the ability to utilize, enhance and maintain our natural gas development equipment. Our ability to maintain and expand our operations depends in part on our ability to utilize, replace, supplement and increase our skilled labor force. The supply of skilled workers is limited in the Beetaloo, and it is not guaranteed that we will be able to access a sufficient skilled labor force. A significant increase in the wages paid by competing employers domestically and abroad could result in a reduction of our skilled labor force or cause an increase in the wage rates that we must pay or both. Employee turnover may also lead to lost productivity and decrease employee engagement, which could adversely impact our business.
Additionally, our ability to hire, train and retain qualified personnel may become more challenging as we grow and to the extent energy industry market conditions are competitive. Our ability to successfully implement U.S. practices and technology is dependent on finding, training and retaining qualified personnel within Australia for work in the Northern Territory. When general industry conditions are favorable, the competition for experienced operational and field technicians increases as other energy and manufacturing companies’ needs for the same personnel increases. Our ability to grow or even to continue our current level of operations could be adversely impacted if we are unable to successfully hire, train and retain these important personnel. In addition, effective succession planning for our employees and expansion planning are important to our long-term success. Failure to achieve these plans could hinder our strategic planning and execution and have a material adverse impact on our business, financial condition or results of operations.
Our inability to access appropriate equipment and infrastructure in a timely manner may hinder our access to natural gas markets and delay the phases of our business plan.
Our ability to market our natural gas will depend substantially on the availability and capacity of gathering systems, pipelines and processing facilities owned and operated by third parties not within our control. Our failure to obtain such services on acceptable terms could materially harm our business. The success of our business plan depends on importing and implementing U.S. practices and technology for use in the development of our properties in the Northern Territory. The delivery of the further drilling rigs may be delayed or canceled, and we may not be able to gain continued access to suitable rigs in the future. We may be required to shut in natural gas wells because of the absence of a market or because access to pipelines, gathering systems or processing facilities may be limited or unavailable. If that were to occur, then we would be unable to realize revenue from those wells until arrangements were made to deliver the production to market, which could cause significant delays to the phases of our business plan and have a material adverse effect on our results of operations and financial condition.
In the Beetaloo, as our development is in its preliminary stage, we have no binding agreements for the gathering and processing of our potential future production. As a result, our business plan is dependent on third parties to develop the infrastructure for our natural gas gathering needs. Capital constraints could limit the construction of new pipelines and gathering systems. Until this new capacity is available, we may experience delays in producing and selling our natural gas. In such an event, we might have to shut in our wells while awaiting a pipeline connection or additional capacity, which would adversely affect our results of operations. Even when available, the ultimate costs of gathering and transportation systems may prevent some of our properties from being economically viable.
A portion of our natural gas production may be interrupted, or shut in, from time to time for numerous reasons, including weather conditions, accidents, loss of pipeline or gathering system access, field labor issues or strikes, or we might voluntarily curtail production in response to market conditions. If a substantial amount of our production is interrupted at the same time, it could materially adversely affect our cash flow.
Drilling, completions, workover and hydraulic fracturing operations are operationally complex activities which present certain risks that could adversely affect our business, financial condition or results of operations.
In our drilling operations, from time to time we experience certain issues and encounter risks, including, for example, mechanical and instrument or tool failures; drilling difficulties associated with drilling in swelling clay or shales and unconsolidated formation; wellbore instability and other geological hazards; loss of well control and associated hydrocarbon release and/or natural gas clouds; loss of drilling fluids circulation; surface spills of various drilling or well fluids; subsurface collision with existing wells; proximity of adjacent water wells or aquifers; inability to establish drilling fluid circulation; loss or compromise of drill pipe or casing integrity; surface pumping operations and associated pressure and hydrocarbon hazards; stuck and lost-in-hole tools, drill pipe or casing; large drilling equipment and machinery including electrical hazards; insufficient cementing of casing causing unwanted casing pressure or fluid migration; surface overpressure events from large machinery (horsepower), equipment or well pressure; fines and violations related to relevant laws and regulations; fires and explosions; personnel safety hazards such as working at heights, driving or equipment operation, energy isolation, excavation and trenching and more; structural damage and collapse to large equipment and machinery; major damage or malfunction to key equipment or processes; in certain instances, close proximity of operations to residences and/or communities; among other typical shale basin drilling challenges and risks.
In our hydraulic fracturing, workover and completions activities, from time to time we experience certain issues and encounter risks, including, for example, mechanical and instrument or tool failures; loss of well control and associated hydrocarbon release and/or natural gas clouds; well kick or flowback during completion or fracturing operations; lost or stuck in hole wireline, coiled tubing or workover strings and tools; loss or compromise of workover string, tubing or casing integrity; large completions, wireline, coiled tubing and workover rig equipment and machinery including electrical hazards; insufficient cementing of casing causing unwanted casing pressure or fluid migration while fracturing or thereafter; proximity of adjacent water wells or aquifers and adjacent producing wells; surface spills of various fracturing, freshwater or well fluids or chemicals; surface pumping and flowback operations and associated pressure and hydrocarbon hazards; surface overpressure events from large machinery (horsepower), equipment or well pressure; fines and violations related to relevant laws and regulations; fires and explosions; personnel safety hazards such as working at heights, driving or equipment operation, energy isolation, excavation and trenching and more; structural damage and collapse to large equipment and machinery; major damage or malfunction to key equipment or processes; in certain instances, close proximity of operations to residences and/or communities; among other typical fracturing, workover and completion challenges and risks.
Our industry requires us to navigate many uncertainties that could adversely affect our financial condition and results of operations.
Our financial condition and results of operations depend on the success of the development of our assets, which are subject to numerous risks beyond our control, including the risk that development will not result in commercially viable production or uneconomic results or that various characteristics of the drilling process or the well will cause us to abandon the well prior to fully producing commercially viable quantities.
Our actual development cost for a well could significantly exceed planned “authorization for expenditure” levels. Further, many factors may curtail, disrupt, delay or cancel our scheduled drilling projects and ongoing operations, including the following:
•reductions of sustained declines in natural gas prices; and
•regulatory compliance, including limitations on wastewater disposal, discharge of greenhouse gases and hydraulic fracturing.
In addition, our assets are anticipated to be developed over several years, making them susceptible to uncertainties that could materially alter the occurrence or timing of their drilling, the scope, rate of progress and cost of our exploration and production activities. Our ability to drill and develop our assets depends on a number of factors, including the availability of equipment and capital, seasonal conditions, regulatory approvals, obtaining land access agreements for regulated operations, natural gas prices, costs and drilling results. Because of these uncertainties, we do not know if our properties will be drilled within our expected timeframe or at all or if we will be able to economically produce natural gas from these or any other potential drilling locations. As such, our actual drilling activities may be materially different from our current expectations, which could adversely affect our results of operations and financial condition.
Natural gas prices are volatile. A reduction or sustained decline in prices may adversely affect our business, financial condition or results of operations and our ability to meet our financial commitments or raise capital.
Our future growth is dependent on the continued economic importance of the natural gas development and production industry in Australia and global demand (as it relates to LNG trade). Any substantive and prolonged changes to the current economic importance of natural gas development and production industry in Australia would be likely to have an adverse effect on our business, financial condition and profits.
Prevailing natural gas prices heavily influence our potential revenue, profitability, access to capital, growth rate and value of our properties. Further, although we do not produce oil, to the extent oil prices rise considerably, the cost of services we incur may also increase. As a commodity, natural gas prices are subject to wide fluctuations in response to relatively minor changes in supply and demand. Historically, the natural gas market has been volatile. Our revenue, profitability and future growth are highly dependent on the prices we receive for our natural gas production, and the levels of our production, which depend on numerous factors beyond our control. These factors include, but are not limited to, the following:
•worldwide and regional economic conditions impacting the global supply of and demand for natural gas, including economic growth expectations, inflation and hostilities in Ukraine and the Middle East;
•the actions of OPEC, its members and other state-controlled oil companies relating to oil price and production controls;
•the level of global oil and natural gas exploration and production;
•the level of global oil and natural gas inventories;
•prevailing prices on local price indexes in the areas in which we operate and expectations about future commodity prices;
•extent of natural gas production associated with increased oil production;
•the proximity, capacity, cost and availability of gathering and transportation facilities;
•localized and global supply and demand fundamentals and transportation availability;
•weather conditions across the globe;
•technological advances affecting energy consumption;
•speculative trading in natural gas markets;
•end-user conservation trends;
•petrochemical, fertilizer, ethanol, transportation supply and demand balance;
•the price and availability of alternative fuels;
•domestic, local and foreign governmental regulation and taxes; and
•liquefied petroleum products supply and demand balances.
In particular, because of our higher operating costs than U.S. producers, our business model is dependent on the higher natural gas prices we receive from Asian and domestic Australian markets relative to U.S. prices. If commodity prices decrease or we experience widening of basis differentials, our cash flows and refinancing ability will be reduced. We may be unable to obtain needed capital or financing on commercially reasonable terms. Lower commodity prices may also reduce the amount of natural gas that we can produce economically. Additionally, a significant portion of our projects could become uneconomic and require us to abandon or postpone our planned drilling. As a result, a reduction or sustained decline in natural gas prices may materially and adversely affect our financial condition, results of operations, liquidity and our ability to finance capital expenditures.
We may not be able to manage our future growth effectively, which could make it difficult to execute our business strategy.
Our expected future growth could create a strain on the organizational, administrative and operational infrastructure. Our ability to manage our growth effectively will require us to continue to improve our operational, financial and management controls, as well as reporting systems and procedures. Our current team is small, and we will have to hire additional employees to achieve our expected future growth. Our business strategy will be difficult to execute, which may impact our ability to effectively attract employees. As we grow, any failure of our controls or interruption of our facilities or systems could have a negative impact on our business and financial operations. Our future development plan, including the potential development of pipelines, and LNG export facility, will affect a broad range of business processes and functional areas. The time and resources required to implement these new extensions of our business are uncertain, and failure to complete these activities in a timely and efficient manner could adversely affect our operations. If we are unable to manage growth effectively, it may be difficult for us to execute our business strategy.
Our business plan contemplates the execution of midstream contracts with certain third parties in order to allow us to supply our own natural gas to the Northern Territory, the Australian East Coast, and/or for export out of Darwin. We cannot assure you that we will be successful in obtaining the commercial contracts necessary to facilitate direct delivery of our natural gas production on commercially reasonable terms, or at all.
We cannot assure you that we will succeed in any effort to establish midstream contracts that would allow us to supply our own natural gas for export out of Darwin or directly to the Australian East Coast. Even when the physical infrastructure exists to supply our own natural gas directly to Darwin and the Australian East Coast, our ability to utilize that infrastructure depends on whether we can successfully negotiate and enter into midstream contracts on commercially reasonable terms or at all. If we fail to enter into such contracts on commercially reasonable terms or at all or are otherwise subject to capacity constraints, it could have a material adverse effect on our business, financial condition, results of operations and cash flows.
Construction of midstream projects subjects us to risks of construction delays, cost over-runs, limitations on our growth and negative effects on our financial condition, results of operations, cash flows and liquidity.
The second and third phase of our business requires the construction of midstream projects, including pipelines to access the East Coast and our proposed NTLNG terminal, some of which may take a number of years before commercial operation. These projects are complex and subject to a number of factors beyond our control, including delays from third-party landowners, the permitting process, government and regulatory approval, compliance with laws, unavailability of materials, labor disruptions, environmental hazards, financing, accidents, weather and other factors. Any delay in the completion of these projects could have a material adverse effect on our financial condition, results of operations, cash flows and the ability to pay dividends on our common stock. The construction of these midstream facilities requires the expenditure of significant amounts of capital, which may exceed our estimated costs. Estimating the timing and expenditures related to these development projects is very complex and subject to variables that can significantly increase expected costs. Should the actual costs of these projects exceed our estimates, our liquidity and financial condition could be adversely affected. This level of development activity requires significant effort from our management and technical personnel and places additional requirements on our financial resources and internal financial controls. We may not have the ability to attract and/or retain the necessary number of personnel with the skills required to bring complicated projects to successful conclusions.
The construction of midstream projects also requires the support of third-party strategic partners, who may have differing goals and strategies. If our strategic partners do not cooperate in the construction of the midstream projects, we may be unable to market our future natural gas production.
If our assessments of the Beetaloo are materially inaccurate, it will have a fundamental impact on our business.
Our assessment of our property may be inherently inexact and may be inaccurate, including the following:
•the time it takes to bring the Beetaloo to commercial development phase;
•the amount of recoverable reserves;
•timing of development of takeaway capacity and access to other infrastructure, including LNG terminals, on an economically viable basis;
•geological complexity;
•applicable governmental rules and regulations;
•native title holders and traditional Aboriginal owners;
•estimates of operating costs;
•estimates of future development costs;
•estimates of the costs and timing of plugging and abandonment; and
•potential environmental and other liabilities.
Our assessments will not reveal all existing or potential problems, nor will it permit us to become familiar enough with the breadth of the territory we hold license to in order to assess fully their capabilities and deficiencies. We plan to undertake further development of our properties through the use of cash flow from existing production. Therefore, a material deviation in our assessments of these factors could result in less cash flow being available for such purposes than we presently anticipate, which could either delay future development operations (and delay the anticipated conversion of reserves into cash), or cause us to seek alternative sources to finance development activities.
Numerous uncertainties exist in estimating quantities of proved and possible reserves and any such estimates may be inaccurate.
Reserve engineering is a process of estimating commercially recoverable amounts of petroleum that remain in known accumulations that cannot be measured in an exact way. The accuracy of any reserve estimate depends on the quality of available data, the interpretation of such data and price and cost assumptions made by reserve engineers. In estimating probable reserves, it should be noted that those reserve estimates inherently involve greater risk and uncertainty than estimates of proved reserves. Any estimates of proved and probable reserves presented in this report have not been adjusted for risk due to their uncertainty of recovery and are not comparable to measures of proved and probable reserves that we or any other company may provide. In addition, amounts of proved and probable reserves provided by us or any other company should not be summed into total amounts due to the aforementioned uncertainties.
We are dependent on certain members of our management and technical team.
Investors in our common stock must rely upon the ability, expertise, judgment and discretion of our management and the success of our technical team in developing our future natural gas reserves. Our performance and success are dependent, in part, upon key members of our management and technical team, and their loss or departure could be detrimental to our future success. In making a decision to invest in our common stock, you must be willing to rely to a significant extent on our management’s discretion and judgment. There can be no assurance that our senior management will remain in place. The loss of any of our management and technical team members could have a material adverse effect on our results of operations and financial condition, as well as on the market price of our common stock.
We have limited control over properties and investments operated by others or through joint ventures.
Certain of our properties are operated by other companies and may involve third-party working interest owners. We have limited influence and control over the operation or future development of such properties and investments, including compliance with environmental, health and safety regulations or the amount and timing of required future capital expenditures. In addition, we conduct certain of our operations through joint ventures in which we may share control with third parties, and the other joint venture participants may have interests or goals that are inconsistent with those of the joint
venture or us. These limitations and our dependence on such third parties could result in unexpected future costs or liabilities and unplanned changes in operations or future development, which could adversely affect our financial condition and results of operations.
Our financial performance is subject to our counterparties’ or joint venture partners’ performance of their obligations under the relevant contracts, including the joint venture agreements. If one of our counterparties or joint venture partners fails to perform its contractual obligations, it may result in loss of earnings, termination of other related contracts, disputes and/or litigation that could impact our financial performance.
Currently, we are not the operator of EP 161, which is operated by Santos. As we carry out our exploration and development programs, we may enter into arrangements with respect to existing or future properties that result in a greater proportion of our properties being operated by others. As a result, we may have limited ability to exercise influence over the operations of the properties operated by our partners. Dependence on the operator could prevent us from realizing our target returns for those properties. Further, it may be difficult for us to pursue one of our key business strategies of minimizing the cycle time between discovery and initial production with respect to properties for which we do not operate. The success and timing of exploration and development activities operated by our partners will depend on a number of factors that will be largely outside of our control, including:
•the timing and amount of capital expenditures;
•the operator’s expertise and financial resources;
•approval of other participants in drilling wells;
•selection of technology; and
•the rate of production of reserves, if any.
This limited ability to exercise control over the operations of some of our properties may cause a material adverse effect on our results of operations and financial condition.
All of our assets and operations are located in the Beetaloo, making us vulnerable to risks associated with operating in one geographic area.
Our operations are geographically concentrated in the Northern Territory of Australia, and specifically the Beetaloo. As a result, we may be disproportionately exposed to the impact of regional supply and demand factors in the Beetaloo caused by significant governmental regulation, curtailment of production or interruption of the processing or transportation of natural gas produced from wells in this area. In addition, the effect of fluctuations on supply and demand may become more pronounced within a specific geographic natural gas producing area such as the Beetaloo, which may cause these conditions to occur with greater frequency or magnify the effects of these conditions. Due to the concentrated nature of our operations, we could experience any of the same conditions at the same time, resulting in a relatively greater impact on our revenue than they might have on other companies that have more geographically diverse operations.
We may be unable to make accretive acquisitions or successfully integrate acquired businesses or assets, and any inability to do so may disrupt our business and hinder our growth potential.
Our ability to grow may in the future depend in part on our ability to make acquisitions that result in an increase in cash available for distribution. There is intense competition for acquisition opportunities in our industry, and we may not be able to identify attractive acquisition opportunities. Even if we do identify attractive acquisition opportunities, we may not be able to complete the acquisition, do so on commercially acceptable terms or obtain sufficient financing to do so. Competition for acquisitions may increase the cost of, or cause us to refrain from, completing acquisitions. The success of any completed acquisition will depend on our ability to integrate effectively the acquired business into our existing operations. The process of integrating acquired businesses may involve unforeseen difficulties and may require a disproportionate amount of our managerial and financial resources. Our failure to achieve consolidation savings, to successfully integrate the acquired businesses and assets into our existing operations or to minimize any unforeseen operational difficulties could have a material adverse effect on our financial condition and results of operations.
Our business is subject to operating hazards that could result in substantial losses or liabilities for which we may not have adequate insurance coverage.
Natural gas operations are subject to many risks, including well blowouts, craterings, explosions, uncontrollable flows of natural gas or well fluids, fires, pipe, casing or cement failures, abnormal pressure, pipeline leaks, ruptures or spills, vandalism, pollution, releases of toxic gases, adverse weather conditions or natural disasters and other environmental hazards and risks. If any of these hazards occur, we could sustain substantial losses as a result of:
•injury or loss of life;
•severe damage to or destruction of property, natural resources and equipment;
•pollution or other environmental damage;
•investigatory, monitoring, and cleanup responsibilities;
•regulatory investigations and penalties or lawsuits;
•loss of, or delay in revenue;
•suspension or impairment of operations; and
•repairs to resume operations.
We maintain insurance against some, but not all, potential losses or liabilities arising from our operations in accordance with what we believe are customary industry practices and in amounts and at costs that we believe to be prudent and commercially practicable. Our insurance includes deductibles that must be met prior to recovery, as well as sub-limits and/or self-insurance. Additionally, our insurance is subject to exclusions and limitations. Our insurance does not cover every potential risk associated with our operations, including the potential loss of significant revenues. We can provide no assurance that our coverage will adequately protect us against liability from all potential consequences, damages and losses.
We maintain insurance coverage that is considered appropriate for a company of our size operating in the gas exploration phase, subject to policy terms and conditions. This includes insurance coverage related to general and product liability, property, workers compensation, cyber, terrorism and malicious acts, operator’s extra expenses for control of well, seepage and pollution, cleanup and contamination, evacuation expenses and making the well safe.
We may elect not to obtain insurance if we believe that the cost of available insurance is excessive relative to the risks presented. Some forms of insurance may become unavailable in the future or unavailable on terms that we believe are economically acceptable. No assurance can be given that we will be able to maintain insurance in the future at rates that we consider reasonable, and we may elect to maintain minimal or no insurance coverage. If we incur substantial liability from a significant event and the damages are not covered by insurance or are in excess of policy limits, then we would have lower revenues and funds available to us for our operations, that could, in turn, have a material adverse effect on our business, financial condition and results of operations.
Additionally, we will rely to a large extent on transportation infrastructure owned and operated by third parties and damage to, or destruction of, those third-party infrastructure will affect our ability to process, transport and sell our production.
We are subject to numerous risks inherent to the exploration and production of natural gas.
Natural gas exploration and production activities involve many risks that a combination of experience, knowledge and careful evaluation may not be able to overcome. Our future success will depend on the success of our exploration and production activities and on the future existence of the infrastructure that will allow us to take advantage of our findings. Additionally, our natural gas properties are located in an area without significant existing infrastructure, which generally increases the capital and operating costs, technical challenges and risks associated with natural gas exploration and production activities. As a result, our natural gas exploration and production activities are subject to numerous risks, including the risk that drilling will not result in commercially viable natural gas production. Our decisions to purchase, explore, develop or otherwise exploit properties will depend in part on the evaluation of seismic data through geophysical and geological analyses, production data and engineering studies, the results of which are often inconclusive or subject to varying interpretations.
Furthermore, the marketability of expected natural gas production from our property will also be affected by numerous factors. These factors include, but are not limited to, market fluctuations of prices, proximity, capacity and
availability of pipelines, the availability of processing facilities, equipment availability and government regulations (including, without limitation, regulations relating to prices, taxes, royalties, allowable production, importing and exporting of natural gas, environmental protection and climate change). The effect of these factors, individually or jointly, may result in us not receiving an adequate return on invested capital.
In the event that our drilling programs are developed and become operational, they may not produce natural gas in commercial quantities or at the costs anticipated, and our projects may cease production, in part or entirely, in certain circumstances. Drilling programs may become uneconomic as a result of an increase in operating costs to produce natural gas. Our actual operating costs may differ materially from our current estimates. Moreover, it is possible that other developments, such as increasingly strict environmental, health and safety laws and regulations and enforcement policies thereunder and claims for damages to property or persons resulting from our operations, could result in substantial costs and liabilities, delays, an inability to complete our drilling programs or the abandonment of such drilling programs, which could cause a material adverse effect on our results of operations and financial condition.
Our identified drilling locations are scheduled out over several years, making them susceptible to uncertainties that could materially alter the occurrence or timing of their drilling.
Our management team has identified and scheduled drilling locations on our acreage over a multi-year period. Our ability to drill and develop these locations depends on a number of factors, including the availability of equipment and capital, seasonal conditions, regulatory approvals, natural gas prices, costs and drilling results. The final determination on whether to drill any of these drilling locations will be dependent upon the factors described above as well as, to some degree, the results of our drilling activities with respect to our appraisal wells. Because of these uncertainties, we do not know if the drilling locations we have identified will be drilled within our expected timeframe or at all. As such, our actual drilling activities may be materially different from our current expectations, which could adversely affect our results of operations and financial condition.
The development schedule of natural gas projects, including the availability and cost of drilling rigs, equipment, supplies, personnel and natural gas field services, is subject to delays and cost overruns.
Historically, some natural gas projects have experienced delays and capital cost increases and overruns due to, among other factors, the unavailability or high cost of drilling rigs and other essential equipment, supplies, personnel and natural gas field services. The cost to develop our projects has not been fixed and remains dependent upon a number of factors, including the completion of detailed cost estimates and final engineering, contracting and procurement costs. Our construction and operation schedules may not proceed as planned and there may be delays or cost overruns. Any delays may increase the costs of the projects, requiring additional capital, and such capital may not be available in a timely and cost-effective fashion.
Part of our business strategy involves using some of the latest available horizontal drilling and completion techniques, which involve risks and uncertainties in their application.
Difficulties that we face while completing our wells include:
•the ability to fracture stimulate the planned number of stages with the planned amount of proppant;
•the ability to run tools through the entire length of the wellbore during completion operations; and
•the ability to successfully clean out the wellbore after completion of the final fracture stimulation stage.
In addition, certain of the new techniques we are adopting may cause irregularities or interruptions in production. If our development and production results are less than anticipated, the return on our investment for a particular well may not be as attractive as we anticipated, and its value could decline in the future.
We also may be subject to additional costs or shortages of equipment and labor because of the necessity of importing certain equipment or hiring talent from the United States. The unavailability or high cost of drilling rigs, completion crews, equipment, supplies, personnel and oilfield services could adversely affect our ability to execute our development plans within our budget and on a timely basis.
Shale gas completions require significant amounts of water that is subject to delays in regulatory approval from certain aquifers and the cost of utilization of aquifer water may increase over time.
The demand for drilling rigs, completion crews, pipe and other equipment and supplies, including sand and other proppant used in hydraulic fracturing operations and acid used for stimulation can fluctuate significantly, often in correlation with commodity prices or drilling activity in our area of operation and in other shale basins, causing periodic shortages of supplies and needed personnel and rapid increases in costs. Increased drilling activity could materially increase the demand for and prices of these goods and services, and we could encounter rising costs and delays in or an inability to secure the personnel, equipment, power, services, resources and facilities access necessary for us to conduct our drilling and development activities, which could result in production volumes being below our forecasted volumes. In addition, any such negative effect on production volumes, or significant increases in costs could have a material adverse effect on our future cash flow and profitability.
Our recurring losses from operations, negative cash flows and substantial cumulative net losses raise substantial doubt about our ability to continue as a going concern.
In Note 1 titled “Nature of the Organization and Business” of our audited consolidated financial statements for fiscal years 2024 and 2025 included elsewhere in this report, we disclose that there is substantial doubt about our ability to continue as a going concern. In addition, our independent registered public accounting firm included an explanatory paragraph in its report on our consolidated financial statements for fiscal years 2024 and 2025, which stated that there are factors that raise substantial doubt on our ability to continue as a going concern. We have incurred significant operating losses and negative cash flows from operations and expect to continue incurring increasing losses for the foreseeable future as we further our development program. Further, we had accumulated a deficit of $130.4 million as of June 30, 2024 and $167.3 million as of June 30, 2025. These conditions raise substantial doubt about our ability to continue as a going concern. Our consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Our ability to become a profitable operating company is dependent upon our ability to generate revenue and obtain financing adequate to fulfill our development and commercialization activities and achieving a level of revenue adequate to support our cost structure. We have plans to obtain additional resources to fund our currently planned operations and expenditures through additional debt and equity financing, however, there is no guarantee we will obtain financing at all or on commercially acceptable terms. We may not continue as a going concern if we do not raise additional capital. We believe that the proceeds raised from the private placements of our common stock in May and July 2025 provide us with the capital necessary to continue as a going concern through calendar year 2025, and the amount of proceeds, together with our existing cash on hand and future expected inflows, will be sufficient to fund our planned drilling and testing program at least through the end of fiscal year 2026. Our plans are substantially dependent upon the success of commercial production in the Beetaloo, which is still in the early stages of development, and are dependent upon, among other things, the success of our drilling program and infrastructure development in the Beetaloo. If we are unable to obtain sufficient funding, our financial condition and results of operations will be materially and adversely affected, and we may be unable to continue as a going concern. Future financial statements may disclose substantial doubt about our ability to continue as a going concern. If we seek additional financing to fund our business activities in the future and there remains substantial doubt about our ability to continue as a going concern, investors or other financing sources may be unwilling to provide additional funding to us on commercially reasonable terms or at all.
Our long-term business plan contemplates the development of an additional LNG export terminal on the northern coast of Australia. Our ability to develop such a facility is dependent on our ability to attract a third-party partner as well as securing the necessary permits.
We anticipate commencing construction of the NTLNG project as early as fiscal year 2028 with completion occurring as early as 2033. Our ability to commence construction of the NTLNG project on schedule is dependent on a number of factors outside of our control, including the willingness of potential third-party partners to commit to the project. Although we have entered into memoranda of understanding with subsidiaries of each of bp and Shell with respect to long-term contracts for the purchase of a total of 4.4 MTPA from the NTLNG project, these memoranda of understanding are not binding obligations of bp or Shell and either may decide not to pursue our project. We cannot assure you we will be successful in the negotiating or execution of definitive agreements. Failure to do so could cause significant delays to the phases of our business plan and have a material adverse effect on our results of operations and financial condition.
A financial crisis or deterioration in general economic, business or industry conditions could materially adversely affect our results of operations and financial condition.
Concerns over global economic conditions, stock market volatility, energy costs, geopolitical issues, changing regulatory environment and tariffs and trade policies, inflation and elevated interest rates, the availability and cost of credit,
and slowing of economic growth in the United States and fears of a recession have contributed and may continue to contribute to economic uncertainty and diminished expectations for the global economy.
As a result of inflation, we experienced supply chain constraints and inflationary pressure on our cost structure throughout fiscal years 2024 and 2025. Principally, commodity costs for steel and chemicals required for drilling, higher transportation and fuel costs and annual wage increases have increased our operating costs for fiscal year 2025 compared to fiscal year 2024. We cannot predict the future inflation rate but to the extent inflation remains elevated and supply chain constraints remain, we may experience cost increases in our operations, including costs for drill rigs, workover rigs, hydraulic fracturing fleets, tubulars and other well equipment, as well as increased labor costs. Some supply chain constraints and inflationary pressures could persist into fiscal year 2026 but are expected to plateau, however we cannot accurately predict future supply chain constraints and inflation. If we are unable to manage our supply chain, our ability to procure materials and equipment in a timely and cost-effective manner, if at all, may be negatively impacted, which could materially adversely impact our results of operations and financial condition.
Similarly, we cannot predict the impact that high market volatility and instability in the banking sector could have on economic activity and our business in particular. The failure of banks and financial institutions and measures taken, or not taken, by governments, businesses and other organizations in response to these events could adversely impact our business, financial conditions and results of operations.
In addition, continued hostilities between Russia and Ukraine, the conflict between Israel and Hamas, other hostilities in the Middle East, and the occurrence or threat of terrorist attacks in Australia or other countries could adversely affect the economies of Australia and other countries. The ongoing conflict in Ukraine and Israel could continue to have repercussions globally by continuing to cause uncertainty, not only in the natural gas markets, but also in the capital markets. Such uncertainty could result in stock price volatility and supply chain disruptions, as well as higher natural gas prices which could potentially result in increased inflation worldwide and could negatively impact demand for natural gas, NGLs, oil and electricity.
Our business, results of operations and financial condition may be adversely affected by uncertainty and changes in U.S. regulatory environment and trade policies, including tariffs, trade agreements or other trade restrictions imposed by the U.S. or other governments. Tariffs or other trade restrictions may lead to continuing uncertainty and volatility in U.S. and global financial and economic conditions and commodity markets, declining consumer confidence, inflation and diminished expectations for the economy, which could impact the demand for and price of oil and natural gas, increase the price of supplies and raw materials that we rely on to conduct our business, and could impact interest rates. Changing regulatory environment and trade and tariffs policies could ultimately impact our results of operations and financial condition.
Concerns about global economic growth can result in a significant adverse impact on global financial markets and commodity prices. In addition, any financial crisis may cause us to face limitations on our ability to access the debt and equity capital markets and complete asset purchases or sales.
Further, if there is a financial crisis or the economic climate in Australia or abroad deteriorates, worldwide demand for hydrocarbon-based products could materially decrease, which could impact the price at which natural gas from our properties are sold, affect the ability of vendors, suppliers and service providers associated with our properties to continue operations and ultimately materially adversely impact our results of operations, financial condition and ability to pay dividends on our common stock.
Events outside of our control, including an epidemic or outbreak of an infectious disease, terrorism, geopolitical instability, and security threats, could have a material adverse effect on our business, liquidity, financial condition, results of operations, and/or cash flows.
We face risks related to pandemics, epidemics, outbreaks or other public health events, or the threat thereof, that are outside of our control and could significantly disrupt our business and operational plans and adversely affect our liquidity, financial condition, results of operations, cash flows and ability to pay dividends on our common stock.
The nature, scale and scope of the above-described events, combined with the uncertain duration and extent of governmental actions, prevent us from identifying all potential risks to our business. We believe that the known and potential impacts of pandemic-related events include, but are not limited to, the following:
•disruption in the demand for natural gas, NGLs and oil and other petroleum products;
•intentional project delays until commodity prices stabilize;
•a potential future downgrade of our credit rating and potentially higher borrowing costs in the future;
•a need to preserve liquidity, which could result in reductions, delays or changes in our capital expenditures;
•supply chain and shipping lane disruptions, resulting in shortages of, and increased pricing pressures on, among other things, equipment, services and labor;
•liabilities resulting from operational delays due to decreased productivity resulting from stay-at-home orders affecting our workforce or facility closures;
•future asset impairments, including impairment of our natural gas properties and other property and equipment; and
•infections and quarantining of our employees and the personnel of vendors, suppliers and other third parties.
A terrorist attack or armed conflict targeting our systems or natural gas infrastructure generally could materially adversely impact our operations.
Growing geopolitical instability and armed conflicts (including the armed conflict between Russia and Ukraine and between Israel and Hamas as well as other hostilities in the Middle East) has resulted in energy infrastructure becoming a more prominent target of attack by terrorists and conflicting countries. Natural gas, NGLs and oil related facilities, including those operated by us or our service providers, could be direct targets of physical or cyber-attacks, and, if infrastructure integral to our operations is destroyed or damaged, we may experience a significant disruption in our operations. Any such disruption could materially adversely affect our financial condition, results of operations and cash flows. Costs for insurance and other security may increase as a result of increased threats, and certain insurance coverage may become more difficult to obtain, if available at all.
Our business could be negatively affected by security threats and disruptions, including electronic, cybersecurity or physical security threats and other disruptions.
We rely on computer systems, hardware, software, technology infrastructure and online sites and networks for both internal and external operations that are critical to our business (collectively, “IT Systems”). We own and manage some of these IT Systems but also rely on third parties for a range of IT Systems and related products and services. Our business faces numerous and evolving security threats, including cybersecurity risks that threaten the confidentiality, integrity and availability of our IT Systems and information that we collect, maintain and process, including personal, confidential and other types of proprietary or sensitive information (collectively, “Confidential Information”); threats to the security of our facilities and infrastructure or third-party facilities and infrastructure, such as processing plants and pipelines; and threats from terrorist acts, civil unrest and similar acts. The potential for such security threats has subjected our operations to increased risks that could have a material adverse effect on our business. In particular, our implementation of various procedures and controls to monitor and mitigate security threats and to increase security for our information, facilities and infrastructure may result in increased capital and operating costs. Moreover, there can be no assurance that such procedures and controls will be sufficient to prevent security threats, incidents or disruptions from occurring. Security incidents could lead to losses of Confidential Information, critical infrastructure or capabilities essential to our operations, or otherwise impact the availability, integrity or confidentiality of our IT Systems and Confidential Information and could have a material adverse effect on our reputation, financial position, results of operations and cash flows.
There can be no assurance that our efforts to secure our IT Systems will be effective in protecting such IT Systems, facilities, infrastructure and Confidential Information, or that future attempted cybersecurity attacks, incidents, or disruptions would not be successful or damaging. Cybersecurity attacks and risks in particular are becoming more varied, and include threats from diverse vectors such as social engineering/phishing, malware (including ransomware), malfeasance by insiders, human or technological error, as a result of malicious software or malicious code embedded in open-source software, misconfigurations, bugs or other vulnerabilities in commercial software that are integrated into our (or our third party’s) IT Systems. The threat landscape is constantly evolving as threat actors become increasingly sophisticated in using techniques and tools - including artificial intelligence and other emerging technologies - that circumvent security controls, evade detection and remove forensic evidence. As a result, we may be unable to detect, investigate, remediate or recover from future attacks or incidents, or to avoid a material adverse impact to our IT Systems, Confidential Information or business. We and certain of our third-party vendors and suppliers have in the past experienced
cyberattacks and other incidents, and we expect such incidents to continue to varying degrees. While to date no incidents have had a material impact on our operations, we cannot guarantee that material incidents will not occur in the future.
Any adverse impact on the availability, integrity or confidentiality of our IT Systems or Confidential Information, including any attempts to gain unauthorized access to information and systems and other security incidents or breaches, could lead to disruptions in critical systems, unauthorized release of information and corruption of data. They could also damage our reputation, lead to legal claims or proceedings, regulatory investigations and enforcement actions, significant costs from remedial actions, loss of business or potential liability. We cannot guarantee that any costs and liabilities incurred in relation to an attack or incident will be covered by our existing insurance policies or that applicable insurance will be available to us in the future on economically reasonable terms or at all.
Loss of or compromise to our information and computer systems could adversely affect our business.
We are heavily dependent on our IT Systems, including computer-based programs, and those of third parties, including our well operations information, seismic data, electronic data processing and accounting data. If any of such systems or programs were to experience service interruptions, fail or create erroneous information in our hardware or software network infrastructure, possible consequences include our loss of communication links, inability to find, produce, process and sell natural gas and inability to automatically process commercial transactions or engage in similar automated or computerized business activities. Any such consequence could have a material adverse effect on our business. We may be involved in legal proceedings that could result in substantial liabilities.
We may be involved in legal proceedings that count result in substantial liabilities.
Like many energy companies, in the ordinary course of our business, we are from time to time involved in various disputes and disagreements that may lead to legal and other proceedings, such as title, royalty or contractual disputes, regulatory compliance matters, land access disputes, appeals and judicial reviews of regulatory approvals, personal injury or property damage matters. Such legal proceedings are inherently uncertain, and their results cannot be predicted. Regardless of the outcome, such proceedings could have an adverse impact on us because of legal costs, diversion of management and other personnel and other factors. In addition, it is possible that a resolution of one or more such proceedings could result in liability, penalties or sanctions, as well as judgments, consent decrees or orders requiring a change in our business practices, which could materially and adversely affect our business, prospects, financial condition, results of operations, cash flows and ability to pay dividends on our common stock. Accruals for such liability, penalties or sanctions may be insufficient, and judgments and estimates to determine accruals or range of losses related to legal and other proceedings could materially change from one period to the next.
We are subject to risks related to corporate social responsibility, including the risk that our expectations or estimates regarding environmental, social and governance matters may not be achieved or may be incorrect.
Our business, as well as those of other companies, faces increasing public scrutiny related to ESG activities, which are increasingly considered to contribute to the long-term sustainability of a company’s performance.
We risk damage to our brand and reputation if we fail, or are perceived to fail, to act responsibly in a number of areas, such as environmental stewardship and corporate governance and transparency. Adverse incidents with respect to ESG activities could impact the value of our brand, the cost of our operations and relationships with investors, all of which could adversely affect our business and results of operations. For example, we have been in the past, and may in the future be, subject to claims of “greenwashing” (e.g., if our carbon footprint is alleged to be greater than what we claim, or if our ESG claims (including our claims in relation to our goals in respect of equity net zero Scope 1 and 2 emissions) turn out to be false or misleading). Our expectations and estimates regarding ESG matters, including the potential environmental impact of our development and initiatives, may not be achieved or may ultimately prove to be incorrect or out of keeping with evolving best practices, which may lead to additional claims or liability. The law in relation to false and misleading claims about ESG matters and statements about “net zero” emissions goals is evolving, and there continues to be risk that statements we have made could be deemed to be in breach of the Australian Consumer Law and other similar legislation in Australia or other jurisdictions. Breaches of these laws can result in significant financial penalties and other enforcement action.
Some of our ESG efforts may ultimately rely on the right to claim certain emissions offsets or other environmental attributes or to package such attributes with the natural gas we produce. This may be affected by evolving approaches to these matters, complex calculations or commercial agreements, and any disputes or ambiguities regarding such environmental attributes may negatively affect perceptions of our operations and products, subject us to litigation or
stakeholder activism, require us to incur additional costs to procure replacement attributes, or otherwise adversely impact our operations.
We are also subject to evolving expectations on ESG matters from various stakeholders, including regulators, investors, customers, and business partners. Further, in response to the evolving regulatory environment and investor expectations, or due to our acquisitions of other companies or assets, we may, periodically, make adjustments to our environmental targets or goals. See “Increased attention to ESG matters and environmental conservation measures may adversely impact our business.”
Risks Related to Environmental, Legal Compliance and Regulatory Matters
We are subject to complex federal, local and other laws and regulations that could adversely affect the cost, manner or feasibility of conducting our operations or expose us to significant liabilities.
Exploration and production activities in the oil and natural gas industry within Australia are subject to extensive local, state, federal and international laws and regulations that are subject to change from time to time. We may be required to make material expenditures to comply with governmental laws and regulations, particularly in respect of the following matters:
•approvals for drilling operations and other regulated activities;
•land access;
•royalties and royalty increases;
•drilling and development bonds;
•cost recovery for regulatory approvals;
•securities and orphan well levies;
•reports concerning operations;
•the spacing of wells;
•unitization of oil accumulations;
•tenure, landholders, native title holders and traditional Aboriginal owners;
•greenhouse gas emission targets and offset requirements;
•water extraction and disposal;
•environmental assessment;
•remediation or investigation activities for environmental purposes; and
•taxation.
Under these and other laws and regulations, we could be liable for personal injuries, property damage and other types of damages, penalties, and costs. Accordingly, non-compliance may impact our ability to commercialize or retain its assets, which may in turn impact operational and financial performance. Failure to comply with these laws and regulations may also result in the suspension or termination of our operations, loss of permits and subject us to administrative, civil and criminal penalties. Moreover, these laws and regulations could change in ways that could substantially increase our costs. Any such liabilities, penalties, suspensions, or terminations or regulatory changes could have a material adverse effect on our financial condition and results of operations.
Our business is affected by government policy, which in turn may be influenced by international policies and laws. There is no guarantee that the current policy of the Australian Federal Government’s for the investment and development of Australia’s natural gas resources will not change in the future. In particular, there is a risk that the Australian Federal Government could shift its domestic or international policy. International policy developments have the potential to have an indirect impact on our operations, given that domestic policy makers might consider those developments in formulating
and in setting the direction of local policy. For example, the International Energy Agency recently released a report in relation to its recommendations for a pathway to achieve global net zero emissions by 2050, which includes a key recommendation that no new oil and natural gas projects should be developed. It is unknown what impact the report might have, if any, on domestic policy development for natural gas. A shift in energy policy announced and adopted by the NT Government in relation to natural gas or the development of the Beetaloo would pose a similar risk. The NT Government had previously imposed a moratorium on the operations in the Beetaloo, which ended in 2018 following a scientific inquiry and the implementation of certain recommendations.
Shifts in government policy could have varying degrees of impact on our operations and profitability. These impacts could range from loss or reduction in industry incentives, preventing infrastructure development to temporary or permanent moratoriums on future natural gas development in specific areas or across the Beetaloo.
We must comply with relevant laws and regulations in each jurisdiction in which we operate as it applies to the environment, tenure, land access, landholders, native title holders and traditional Aboriginal owners. Non-compliance with these laws and regulations and any special license conditions could result in the suspension of operations, loss of permits or significant financial penalties. Non-compliance may impact our ability to commercialize or retain our assets, which may in turn impact our operational and financial performance.
Changes to these requirements (including, for example, new requirements relating to climate change, environmental protection and energy policy) may restrict or affect our right or ability to conduct our activities.
Our exploration of the Beetaloo is dependent upon the maintenance (including renewal) of our permits by the relevant authorities. Maintenance of the permits is dependent on, among other things, meeting the permit conditions imposed by the relevant authorities including compliance with work program and expenditure requirements. No assurance can be given that such title and access rights are not subject to unregistered, undetected or other claims or interests which could be materially adverse to our interests in the Beetaloo. Further titles or access rights may be disputed, which could result in costly litigation or disruption of the Company’s operations.
Our exploration and production operations are subject to various types of federal, state, territorial and local laws and regulations, and may be restricted or subject to conditions in relation to certain environmental features (such as watercourses or sites of conservation significance). Applicable law regulates the location of wells; the method of drilling, well construction, well stimulation, hydraulic fracturing and casing design; water withdrawal and procurement from designated aquifers for well stimulation purposes; well production; spill prevention plans; the use, transportation, storage and disposal of water and other fluids and materials, including solid and hazardous wastes, incidental to natural gas and oil operations; surface usage and the reclamation of properties upon which wells or other facilities have been located; the plugging and abandoning of wells; ongoing monitoring of wells, the calculation, reporting and disbursement of royalties and taxes; and the gathering of production in certain circumstances.
Our production operations are subject to the discovery of commercially exploitable petroleum and the discretion of the Minister for Mining and Energy for the NT Government to grant a production license. Specifically, we will only be entitled to apply for a production license once a commercially exploitable petroleum discovery is made. Further, the Minister may grant the production license subject to such conditions as the Minister determines to be appropriate at any time. Further the Minister may direct the holder of a production license to maintain, increase or reduce the rate of recovery of petroleum from the area which could impact profitability. The grant of any future production license to the Company over areas that are subject to native title rights and interests or are Aboriginal land will require engagement with the relevant native title holders and land councils in accordance with the Native Title Act 1992 (Cth) and the Aboriginal Land Rights (Northern Territory) Act 1976 (Cth) (ALRA) as relevant. Any delays or costs in engaging with the relevant native title holders in negotiating new arrangements in respect of a production license may adversely impact the Company’s ability to carry out petroleum extraction activities within the affected areas.
Our operations are also subject to the Petroleum Act 1984 (NT), which, among other maters, allows for the unitization of a petroleum pool that extends beyond a license area, but which is desirable for efficiency and avoiding wasteful and harmful development and practices.
Environmental and occupational health and safety laws and regulations govern discharges of substances into the air, ground and water; the management and disposal of hazardous substances and wastes; the clean-up of contaminated sites; groundwater quality and availability; plant and wildlife protection; locations available for drilling; environmental impact studies and assessments required for permitting; restoration of drilling properties upon completion of drilling activities; and work practices related to employee health and safety.
To conduct our operations in compliance with these laws and regulations, we must obtain and maintain numerous permits, approvals and certificates from various federal, state and local governmental authorities. Complying with the laws, regulations and other legal requirements applicable to our business and any delays in obtaining related authorizations may affect the costs and timing of developing our natural gas resources. These requirements could also subject us to claims for damages arising from personal injuries, property damage, penalties, costs and other losses. In addition, our costs of compliance may increase if existing laws and regulations are revised or reinterpreted, or if new laws and regulations become applicable to our operations. Such costs could materially adversely affect our results of operations, cash flows and financial position. Our failure to comply with the laws, regulations and other legal requirements applicable to our business, even as a result of factors beyond our control, could result in the suspension or termination of our operations and subject us to administrative, civil and criminal penalties and damages as well as corrective action costs.
We face community opposition from certain parties with respect to our development of the Beetaloo and related operations, which could result in significant costs and delays and could impede our ability to obtain the government approvals required for such operations.
We have been the target of protests and adverse publicity from certain parties due to concerns about our operations with respect to environmental issues or Indigenous rights, and there is an ongoing risk from existing or future community opposition to our operations. For example, pastoralists whose pastoral leases are subject, in part, to our petroleum interests may refuse to enter into access agreements for us to conduct certain regulated activities that require an access agreement, and we may be required to make applications to the relevant tribunal to obtain access agreements for such regulated activities.
Disapproval from local communities or other interested parties may lead to direct action that could impede our ability to carry out our operations, resulting in project delay, reputational damage and increased costs, and thus impact our financial performance. Such community opposition may include undertaking legal proceedings (including challenges to required governmental approvals) seeking orders to prevent part of all of our operations, media campaigns and protests, which could result in significant legal costs and delays. If such community members were successful in their campaigns, operations may be suspended or we may not be able to obtain the permits and approvals or there could be delay in obtaining the permits and approvals we will need to carry out our commercial operations.
The exploration and development of natural gas in the Beetaloo can pose native title and heritage risks, potentially leading to legal disputes, operational disruptions, and reputational damage.
We are required to comply with the Native Title Act 1993 (Cth), and we operate on areas in which native title has been judicially determined to exist. Consultation and negotiations have occurred, leading to the development of exploration agreements with native title holders. Further agreements will be required for any production phase, but the exploration agreements anticipate production and provide the parameters for those negotiations and outcomes. We will also be required to comply with the ALRA for tenement applications over Aboriginal land (i.e., freehold land held by an Aboriginal Land Trust under the ALRA, or land subject to a deed of grant held in escrow by an Aboriginal Land Council under the ALRA). Compliance with either legislative regime and their respective requirements for negotiation and agreement can significantly delay the grant of exploration and production tenements, and substantial compensation may be payable as part of any agreement reached. Applications for exploration tenements over Aboriginal land can also be placed into moratorium for five years at a time under the ALRA (unless the Governor-General of Australia declares by proclamation that the Australian national interest requires that the license be granted). These legislative regimes may impact our existing or future activities, ability to develop projects and operational and financial performance. Additionally, we cannot guarantee that all stakeholders will agree that our negotiations have been conducted consistent with the principle recognized in the UN Declaration of the Rights of Indigenous People of Free, Prior and Informed Consent, which may result in operational, reputational, or other adverse impacts to our business.
In addition, we will also need to comply with the Sacred Sites Act 1989 (NT), the Heritage Act 2011 (NT), the Aboriginal and Torres Strait Islander Heritage Protection Act 1984 (Cth) and the ALRA in relation to sacred sites and certain matters of Aboriginal cultural heritage. Sacred sites and Aboriginal cultural heritage have been identified within areas covered by the tenements in which we have an interest, and other such sites may exist. It is an offense under Part IV of the Sacred Sites Act 1989 (NT) to enter onto or remain on, carry out work on or use, or desecrate a sacred site without authority. All sacred sites are protected under the Sacred Sites Act 1989 (NT), regardless of whether or not they are included on the register maintained under the Sacred Sites Act 1989 (NT). Destruction, disturbance or harming protected sites and artifacts may result in us incurring significant civil and/or criminal penalties, and reputational harm all of which may adversely impact or delay our activities. In addition, in the event of damage to sacred sites and Aboriginal cultural heritage, remediation costs may be substantive. Compliance with these laws requires significant expenditure and non-
compliance may potentially result in fines and requests for improvement action from the regulator all of which may result in limitations on actions and project delays or cost overruns.
Upon commencement of commercial production, we are required by the Australian government to produce natural gas in the Beetaloo on a Scope 1 net zero basis. We also have set an internal net zero goal with respect to natural gas production. Meeting these requirements and goals may increase our costs of production, and we may be unable to meet these requirements and goals.
Australian law which includes the National Greenhouse and Energy Reporting Act 2007 (Cth) and the National Greenhouse and Energy Reporting (Safeguard Mechanism) Rule 2015 (Cth) requires that, upon commencement of commercial production and reaching the relevant threshold of 100,000 t-CO2-e emissions per fiscal year, we produce natural gas in the Beetaloo on a Scope 1 net zero basis. We also have set an internal net zero goal with respect to natural gas production. To achieve this, we intend to utilize renewables to supply our upstream operational power needs and to integrate carbon capture and sequestration with our upstream production activities as well as purchase carbon credits as required, however there is no guarantee we will achieve such plans. If we are unable to utilize renewables to supply our upstream operation power needs and integrate carbon capture and sequestration with our upstream production activities to the extent we currently expect, if the price of carbon credits increases or if we have otherwise underestimated the amount of Scope 1 or Scope 2 emissions, that we will need offset our costs of production will increase further which could have a material adverse effect on the results of operations.
We may not achieve, and there are potential risks associated with, our growth strategy and vision to become an equity net zero Scope 1 and 2 emissions producer. Achievement of our vision of becoming an equity net zero Scope 1 and 2 producer of gas is presently uncertain and depends on us being able to economically manage our carbon emissions, which could, for example, be impacted by availability of future revenues to fund various carbon initiatives, market pricing of carbon offsets, evolution in greenhouse gas accounting methodologies, technological developments affecting operations and costs of implementing sustainable practices. Failure, or perceived failure, to meet these or other goals or commitments regarding the environmental, social and governance (ESG) characteristics of our offerings may subject us to litigation or stakeholder activism (which may be costly) or otherwise adversely impact our business. For more information, see our risk factor titled “We are subject to risks related to corporate social responsibility, including the risk that our expectations or estimates regarding environmental, social and governance matters may not be achieved or may be incorrect.”
Increased attention to ESG matters and environmental conservation measures may adversely impact our business.
Increasing investor and societal attention to climate change and ESG, rising expectations for companies to address climate change and develop voluntary ESG initiatives, and growing consumer demand for alternative forms of energy may result in increased costs (including but not limited to increased costs related to compliance, stakeholder engagement, contracting and insurance), reduced demand for our products, reduced profits, increased investigations and litigation and negative impacts on our access to capital markets. Increasing attention to climate change, environmental justice and environmental conservation, for example, may result in demand shifts for natural gas products and additional governmental investigations and private litigation against us. To the extent that societal, political, or other factors are involved, including factors associated with geopolitical considerations, it is possible that we could be subject to changing market conditions, liability, or loss of certain assets without regard to our ultimate role in the causation of or contribution to the asserted events or damages, or to other mitigating factors.
Opposition toward natural gas drilling and development activity has been growing globally. Companies in the natural gas industry are often the target of activist efforts from both individuals and non-governmental organizations regarding safety, environmental risk and compliance and business practices. Anti-development activists are working to, among other things, reduce access to government lands and delay or cancel certain projects such as the development of natural gas shale plays or related fossil fuel infrastructure.
Our voluntary initiatives (such as voluntary disclosures, certifications, or goals, among others) to improve the ESG profile of our company and/or products or to respond to stakeholder expectations may be costly and may not have the desired effect. For example, we may ultimately be unable to complete certain initiatives or targets, either on the timelines initially announced or at all, due to technological or legal cost, or other constraints, which may be within or outside of our control. For example, we may undertake initiatives or disclosures based on estimates, assumptions, methodologies, or third-party information that is subsequently determined to be inaccurate, unreasonable, or to not align with best practices. Our approaches to such matters may evolve as well, but we cannot guarantee that it will necessarily align with the expectations of any particular stakeholder.
If we fail to, or are perceived to fail to, comply with or advance certain ESG initiatives (including the timeline and manner in which we complete such initiatives), we may be subject to various adverse impacts, including reputational damage and potential stakeholder engagement and/or litigation, even if such initiatives are currently voluntary. For example, there have been increasing allegations of greenwashing against companies making significant ESG claims due to a variety of perceived deficiencies in disclosure, methodology, or performance, including as stakeholder perceptions of sustainability continue to evolve.
In addition, we expect there will likely be increasing levels of regulation, disclosure-related and otherwise, with respect to ESG matters. For example, various policymakers, such as the Australian Department of the Treasury, have adopted, or are considering adopting, rules to require companies to provide significantly expanded climate- and sustainability-related disclosures, which may require us to incur significant additional costs to comply, including the implementation of significant additional internal controls, processes and procedures regarding matters that have not been subject to such controls in the past, and impose increased oversight obligations on our management and board of directors. These regulations are not uniform, which may increase the cost and complexity of compliance, as well as associated risks. Simultaneously, there are efforts by some stakeholders to reduce companies’ efforts on certain ESG-related matters. Both advocates and opponents to certain ESG matters are increasingly resorting to a range of activism forms, including media campaigns and litigation, to advance their perspectives. To the extent we are subject to such activism, it may require us to incur costs or otherwise adversely impact our business. In addition, we note that standards and expectations regarding carbon accounting and the processes for measuring and counting GHG emissions and GHG emission reductions are evolving, and it is possible that our approach to measuring both our emissions and our approaches to reduce emissions may be, either currently or in the future, considered inconsistent with common or best practices with respect to measuring and accounting for such matters, reducing overall emissions and/or achieving “net zero” across any emissions scope. If our approaches to such matters fall out of step with common or best practice, we may be subject to additional scrutiny, criticism, regulatory and investor engagement or litigation, any of which may adversely impact our business, financial condition or results of operations. This and other stakeholder expectations will likely lead to increased compliance costs as well as scrutiny that could heighten all of the risks identified in this risk factor.
Organizations that provide information to investors on corporate governance and related matters have developed ratings processes for evaluating companies on their approach to ESG matters. Such ratings are used by some investors to inform their investment and voting decisions. Unfavorable ESG ratings and recent activism directed at shifting funding away from companies with fossil fuel-related assets could lead to increased negative investor sentiment toward us and our industry and to the diversion of investment to other industries, which could have a negative impact on our access to and costs of capital. Also, institutional lenders may decide not to provide funding for fossil fuel energy companies based on climate change and natural capital related concerns, which could affect our access to capital for potential growth projects. Moreover, to the extent ESG matters negatively impact our reputation, we may not be able to compete as effectively to recruit or retain employees, customers, or business partners. Such ESG matters may also impact our suppliers, service providers, or customers, which may adversely impact our business, financial condition, or results of operations.
Federal and local legislative and regulatory initiatives relating to hydraulic fracturing as well as governmental reviews of such activities could result in increased costs and additional operating restrictions or delays in the completion of natural gas wells and adversely affect our production.
Public debate exists regarding the potential subsurface and surface impact of unconventional drilling, including concern about the impacts of unconventional drilling for water. In addition, there are many regulatory requirements for us to adhere to including, but not limited to, those specified in the Petroleum Act 1984 (NT), Petroleum Regulations 2020 (NT), Petroleum (Environment) Regulations 2016 (NT), Water Act 1992 (NT), Environment Protection Act 2019 (NT), Environment Protection and Biodiversity Conservation Act 1999 (Cth) and the Work Health and Safety (National Uniform Legislation) Act 2011 (NT) and Work Health and Safety (National Uniform Legislation) Regulations 2011 (NT). Unconventional drilling requires large volumes of water (the availability and regulation of which may change over time) and there are costs associated with water disposal that may be required should we produce water in our wells. As more impacts of unconventional drilling are fully understood, it may be subject to additional regulations or restrictions from local, state, or federal governmental authorities, resulting in increased compliance costs. Any modification to the current requirements may adversely impact the value of our assets and future financial performance.
Our operations are subject to risks relating to climate change that could increase compliance or operating costs, limit natural gas exploration and production areas, and reduce demand for the natural gas we produce.
Climate change continues to attract considerable public and scientific attention. As a result, numerous proposals, laws, and regulations have been adopted, been considered for adoption, and are likely to continue to be made at the
international, national, regional and state levels of government to monitor and limit emissions of carbon dioxide, methane and other GHGs. These efforts have included consideration of cap-and-trade programs, carbon taxes, GHG reporting and tracking programs and regulations that directly limit GHG emissions from certain sources. As a natural gas development company, we are exposed to both transition risks and physical risks associated with climate change. Transitioning to a lower-carbon economy may entail extensive policy, legal, technology and market changes and, if demand for gas declines, we will find it difficult to commercialize any resources we discover.
The transition and physical risks associated with climate change (including also regulatory responses to such issues and associated costs) may significantly affect our operating and financial performance. For example, the Australian government announced its policy to target net zero carbon emissions economy-wide by 2050. In connection with that announcement, the Australian government designated that shale natural gas facilities in the Beetaloo that exceed the relevant threshold of 100,000 gross tonnes of CO2-e emissions per fiscal year will be given a “Zero” GHG baseline. Accordingly, once a natural gas producer has exceeded the 100,000 gross t-CO2-e Scope 1 threshold, the Company must demonstrate that it has achieved Scope 1 net zero emissions, either through operational measures (such as carbon capture and storage) or by purchasing carbon offsets. Various policymakers have also adopted, or are considering adopting, rules to require companies to provide significantly expanded climate-related disclosures. For more information, see our risk factor titled “Increased attention to ESG matters and environmental conservation measures may adversely impact our business.” In addition, the increased frequency or severity of natural disasters and weather events due to climate change could delay or prevent our ability to conduct our activities, which could negatively impact our financial performance.
Increasing attention to global climate change has resulted in increased risk of public and private litigation, which could increase our costs or otherwise adversely affect our business. A number of parties have commenced litigation against oil and natural gas companies in state or federal courts and tribunals, alleging, among other things, that such companies contributed to climate impacts by producing, handling or marketing fossil fuels, or violate citizens’ rights by contributing to climate change, or alleging that companies have been aware of the adverse effects of climate change for some time but failed to adequately disclose those impacts. In some jurisdictions, litigation has also been brought to establish legal mandates for particular entities to take certain climate-related actions, such as pursuing aggressive emissions reductions for their Scope 3 emissions reductions, regardless of whether entities have established any such goals already. The ultimate outcome and impact to us of any such litigation cannot be predicted with certainty, and we could incur substantial legal costs associated with defending these and similar lawsuits in the future. Activism related to climate change has also been increasing in our industry, and both shareholders and other parties may attempt to effect changes to our business or governance, whether by stockholder proposals, public campaigns, proxy solicitations or otherwise, as applicable. Any of these risks could result in unexpected costs, negative sentiments about us, disruptions in our operations, increases to our operating costs and expenses and reduced demand for our products, which in turn could have an adverse effect on our business, financial condition and results of operations.
There are also increasing financial risks for fossil fuel producers as various capital providers may elect in the future to shift some or all of their investments into non-fossil fuel energy related sectors. Many capital providers have also incorporated more substantial assessments of climate-related matters into their funding considerations, including how such funding may impact such capital providers’ own Scope 3 emissions, and may elect not to provide, or to continue not to provide, funding to fossil fuel energy companies. For example, at COP26, the Glasgow Financial Alliance for Net Zero (“GFANZ”) announced that commitments from over 650 firms across over 50 countries had capital committed to net zero goals. The various sub-alliances of GFANZ generally require participants to set short-term, sector-specific targets to transition their financing, investing, and/or underwriting activities to net zero emissions by 2050. While various capital providers have subsequently left these consortia, many have stated that they continue to consider climate-related matters in their strategy and financing decisions. There is also a risk that financial institutions will be required to adopt policies that have the effect of reducing the funding provided to the fossil fuel sector. Limitation of investments in and financings for fossil fuel energy companies could result in the restriction, delay or cancellation of drilling programs or development or production activities.
Significant physical events also have the potential to damage our facilities, disrupt our production activities and cause us to incur significant costs in preparing for or responding to those effects. Climate change is expected to have an effect on the frequency or severity of weather events (including hurricanes, wildfires, droughts and floods), sea levels, the arability of farmland, changes in temperature and other meteorological patterns, and water availability and quality and our development and production operations have the potential to be adversely affected. Potential adverse effects could include damages to our facilities from powerful winds or rising waters in low lying areas, disruption of our production activities either because of climate related damages to our facilities or in our costs of operation potentially arising from such climatic effects, less efficient or non-routine operating practices necessitated by climate effects or increased costs (or decreased availability) for insurance coverage in the aftermath of such effects. Additionally, in response to changing climatic
conditions, certain policymakers have proposed increased restrictions on the withdrawal and use of water for fossil fuel production or other industrial uses, which may either delay or prohibit our access to certain bodies of water; to the extent we do not have sufficient local water sources available, we may be required to incur substantial costs or curtail operations, which may become more significant in periods of drought or other water scarcity. Increasing water stress or other concerns about climate change may also increase policymakers or activists’ scrutiny on any potential impacts of our operations on local water bodies regardless of any use we make thereof. Significant physical effects of climate change could also have an indirect effect on our financing and operations by disrupting the transportation or process-related services provided by midstream companies, service companies or suppliers with whom we have a business relationship. The effects of climate change may impact the cost or availability of insurance, and even where insurance is maintained we may not be able to recover through insurance some or any of the damages, losses or costs that may result from potential physical effects of climate change. Our various actions to mitigate our business risks associated with climate change require us to incur substantial costs and may not be successful, due to, among other things, the uncertainty associated with the longer-term projections associated with managing climate related risks.
Our ability to pursue our business strategies may be adversely affected if we incur costs and liabilities due to a failure to comply with environmental, health and safety laws or regulations or a release into the environment.
Despite efforts to conduct activities in an environmentally responsible manner and in accordance with applicable laws, there is a risk that our activities may cause harm to the environment which could impact production or delay future development timetables.
We are subject to laws and regulations to minimize the environmental impact of our operations and rehabilitation or remediation of any areas affected by our operations. Changes to environmental laws may result in the cessation or reduction of our activities, materially increase development or production costs or otherwise adversely impact our operations, financial performance or prospects. Penalties for failure to adhere to requirements and, in the event of environmental damage, remediation costs can be substantial and may not, in their entirety, covered by insurance. Compliance with these laws requires significant expenditure and non-compliance may potentially result in fines or requests for improvement action from the regulators.
In addition, if we were to be held responsible for environmental damage, in addition to remediation costs, we may suffer reputational damage, possible suspension or cessation of operations, suspension or revocation of permits, litigation risk, or financial or civil penalties.
We may incur significant costs and liabilities as a result of environmental, health and safety laws and regulations applicable to the operation of our wells, gathering systems and other facilities including, for example, including but not limited to the following laws, as amended from time to time.
•Petroleum Act 1984 (NT);
•Petroleum Regulations 2020 (NT);
•Petroleum (Environment) Regulations 2016 (NT);
•Water Act 1992 (NT);
•Environment Protection Act 2019 (NT);
•Environment Protection and Biodiversity Conservation Act 1999 (Cth);
•Northern Territory Aboriginal Sacred Sites Act 1989 (NT);
•Heritage Act 2011 (NT);
•Aboriginal and Torres Strait Islander Heritage Protection Act 1984 (Cth);
•Native Title Act 1993 (Cth);
•Aboriginal Land Rights (Northern Territory) Act 1976 (NT);
•The National Greenhouse and Energy Reporting Act 2007 (Cth);
•Work Health and Safety (National Uniform Legislation) Act 2011 (NT); and
•Waste Management and Pollution Control Act 1988 (NT).
These laws and their respective regulations, as well as state and territory laws and regulations, generally restrict the level of pollutants emitted to ambient air, discharges to surface water and disposals or other releases or threats of release to surface, soils and groundwater. Failure to comply with these laws and regulations may result in the assessment of sanctions, including administrative, civil and criminal penalties, the imposition of investigatory, remedial and corrective action obligations, the incurrence of capital expenditures, the occurrence of delays in the permitting, development or expansion of projects and the issuance of orders enjoining some or all of our future operations in a particular area. Certain environmental laws impose strict joint and several liability, without regard to fault or legality of conduct, for costs required to clean up and restore sites where hazardous substances or other wastes have been disposed of or otherwise released. Moreover, it is not uncommon for neighboring landowners and other third parties to file claims for personal injury and property damage allegedly caused by the release of hazardous substances, wastes or other materials into the environment. The damages claimed may be material. In addition, these laws and regulations may restrict the rate of natural gas production or underground injection, disposal, and sequestration of carbon dioxide. There can be no assurance that our environmental compliance costs will not be material in the future or that such future compliance will not have a material adverse effect on our business and operating results.
In addition, as a result of these environmental, health and safety laws and regulations, and their impact on our operations, we rely on specialized contracted companies to perform the majority of the specialized services inherent in the oil and natural gas industry. As such, we rely on the ability of these contractors to provide trained labor and properly designed and maintained equipment unique to their services. With the cyclical nature of the oil and natural gas business, the personnel used by these specialized contractors to perform these services may differ significantly in experience levels. From time to time, these specialized contractors may use new personnel that are still in training or may further sub-contract these services to other companies or personnel. There is a risk that these sub-contractors are unqualified or under-trained or that their equipment is not properly designed or maintained, which could result in work being performed inadequately or unsafely.
Moreover, public interest in the protection of the environment has increased dramatically in recent years. The trend of more expansive and stringent environmental legislation and regulations applied to the oil and natural gas industry could continue, resulting in increased costs of doing business and consequently affecting profitability. To the extent laws are enacted or other governmental action is taken that restricts or prohibits drilling or production or imposes more stringent and costly operating, waste handling, disposal and cleanup requirements, our business, prospects, financial condition or results of operations could be materially adversely affected.
Our future gathering systems and processing, treating and fractionation facilities will be subject to regulation by the Northern Territory that could have a material adverse effect on our operations and cash flows.
NT Government regulation of gathering systems and processing, treating and fractionation facilities includes safety and environmental requirements. In addition, several of our future gas gathering systems will be subject to non-discriminatory take requirements and complaint-based regulation with respect to our rates and terms and conditions of service. Northern Territory regulation may cause us to incur additional costs or limit our operations, any or all of which could have a material adverse effect on our operations and revenue.
We may face unanticipated water and other waste disposal costs as a result of increased water-related laws and regulations.
We may be subject to laws and regulation that restrict our ability to cost effectively manage water produced as part of natural gas exploration and production operations. The process of shale extraction evolves the injection of stimulation fluid involving water and the recovery of that stimulation fluid to enable gas flows. This water is referred to as flowback. Other waste water is produced during drilling, with drilling and flowback wastewater collectively referred to as “wastewater”. Our ability to manage wastewater may impact our ability to undertake exploration and production activities. Wastewater must be either recycled within stimulations or evaporated onsite prior to transport and disposal of any remaining wastewater. The cost to transport and dispose of that water, including the cost of complying with regulations concerning water disposal, may reduce our profitability. Where wastewater produced from our projects fails to meet the quality requirements of applicable regulatory agencies, our wells produce wastewater in excess of the applicable volumetric permit limits or the quality is not suitable for recycling, we may have to shut in wells, reduce drilling activities, or upgrade
facilities for wastewater handling or treatment. The costs to dispose of this produced water may increase if any of the following occur:
•we cannot obtain future permits from applicable regulatory agencies;
•water of lesser quality or requiring additional treatment is produced;
•our wells produce excess water;
•new laws and regulations require water to be disposed in a different manner; or
•costs to transport the produced wastewater to the disposal wells increase.
Restrictions on drilling, completion, production or related activities intended to protect certain species of wildlife may adversely affect our ability to conduct drilling activities in some of the areas where we operate.
Natural gas operations in our operating areas can be adversely affected by seasonal or permanent restrictions on drilling activities designed to protect various wildlife, such as those restrictions imposed under the Environment Protection Act 2019 (NT) or the Environment Protection and Biodiversity Conservation Act 1999 (Cth) (the EPBC Act). Seasonal restrictions may limit our ability to operate in certain protected areas and can intensify competition for drilling rigs, oilfield equipment, services, supplies and qualified personnel, which may lead to periodic shortages when drilling is allowed. These constraints and the resulting shortages or high costs could delay our operations and materially increase our operating and capital costs. Permanent restrictions imposed to protect endangered species could prohibit drilling in certain areas or require the implementation of expensive mitigation measures. The designation of previously unprotected species in areas where we operate as threatened or endangered could cause us to incur increased costs arising from species protection measures or could result in limitations on our exploration, development and production activities that could have an adverse impact on our ability to develop and produce our reserves. To the extent species are listed or re-designated under the EPBC Act, or previously unprotected species are designated as threatened or endangered in areas where our properties are located, operations on those properties could incur increased costs arising from species protection measures and face delays or limitations with respect to production activities thereon. There is also increasing interest in nature-related matters beyond protected species, such as general biodiversity, which may similarly require us to incur costs or take other measures which may materially impact our business or operations.
Our business is subject to complex and evolving laws and regulations regarding privacy, data security and the processing of personal information.
In connection with running our business, we handle information that relates to individuals and/or constitutes “personal information” or similar terms under applicable data privacy laws, including from and about business contacts, employees, investors, and website users. We also depend on third party vendors in relation to the operation of our business, a number of which process personal information on our behalf. We and our vendors are therefore subject to various federal, state, and foreign laws, regulations and other requirements relating to the privacy, security and handling of personal information. For example, certain laws and regulations laws impose transparency obligations, provide residents with rights in relation to their personal information, and restrictions on our disclosure of their information.
These requirements, and their application, interpretation and amendment, are constantly evolving and pose increasingly complex compliance challenges. It is also possible that new laws, regulations and other requirements, or amendments to or changes in interpretations of existing laws, regulations and other requirements, may require us to implement new processes, potentially elevate our costs, or require changes to our handling of information or our operations. Further, legislative activity and regulatory focus on data privacy and security, including in relation to cybersecurity incidents, have significantly increased in the United States and globally. Some such requirements restrict our ability to process personal information across our business and across country borders. Any failure or perceived failure by us to comply with laws, regulations, industry standards, regulations and requirements regarding data privacy, data security or the processing of personal information could result in proceedings or actions against us by individuals, consumer rights groups, government agencies, or others. We continue to monitor and assess the impact of these laws, regulations and other requirements, but we could incur significant costs in investigating and defending such claims, and any subsequent adverse outcomes may subject us to significant negative publicity and an erosion of trust. If any of these events were to occur, our business, results of operations, and financial condition could be materially adversely affected.
Risks Related to our Corporate Structure
We are a holding company. Our sole material asset is our equity interest in TR Ltd., and we will be accordingly dependent upon distributions from TR Ltd. to pay taxes and cover our corporate and other overhead expenses.
We are a holding company and have no material assets other than our equity interest in TR Ltd. See “Business and Properties-General Development of Business and Corporate Reorganization.” We have no independent means of generating revenues. To the extent TR Ltd. has available cash, we intend to cause TR Ltd. to make distributions to us, in an amount at least sufficient to allow us to pay our taxes and reimburse us for our corporate and other overhead expenses. We may be limited, however, in our ability to cause TR Ltd. and its subsidiaries to make these and other distributions or payments to us due to certain limitations, including the cash requirements and financial condition of TR Ltd. and restrictions in any relevant debt instruments entered into by TR Ltd. or its subsidiaries and/other entities in which it directly or indirectly holds an equity interest. To the extent that we need funds and TR Ltd. or its subsidiaries are restricted from making such distributions or payments under applicable laws or regulations or under the terms of any future financing arrangements, or are otherwise unable to provide such funds, our liquidity and financial condition could be materially adversely affected.
We may be unable to achieve some or all of the benefits that we expect to achieve from the Corporate Reorganization, which could materially adversely affect our business, financial condition and results of operations.
We may not be able to achieve the full strategic and financial benefits expected to result from the Corporate Reorganization, or such benefits may be delayed or not occur at all. We may not achieve these and other anticipated benefits for a variety of reasons, including, among others, because we may experience unanticipated competitive developments, including changes in the conditions of industry and the markets in which we operate, including fluctuations in the prices of natural gas that could negate some or all of the expected benefits from the Corporate Reorganization.
If we do not realize some or all of the benefits expected to result from the Corporate Reorganization, or if such benefits are delayed, our business, expected future financial and operating results and our prospects could be adversely affected.
Risks Related to our Common Stock and our CDIs
The requirements of being a public company, including compliance with the reporting requirements of the ASX listing rules and the Exchange Act, may strain our resources, increase our costs and distract management, and we may be unable to comply with these requirements in a timely or cost-effective manner.
As our CDIs are publicly traded in Australia and our common stock is publicly traded in the United States, we need to comply with laws, regulations and requirements, certain corporate governance provisions of SOX, related regulations of the SEC and the requirements of the ASX and NYSE. Complying with these statutes, regulations and requirements occupies a significant amount of our time and causes us to incur significantly costs and expenses.
If, however, we do not follow those procedures and policies, or they are not sufficient to prevent non-compliance, we could be subject to liability, fines and lawsuits. These laws, regulations and standards are subject to varying interpretations and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies. Our investment in resources to comply with evolving laws, regulations and standards may result in increased general and administrative expenses and a diversion of management’s time and attention from revenue generating activities to compliance activities. If we fail to comply with new laws, regulations and standards, regulatory authorities may initiate legal proceedings against us, and our business may be harmed.
Furthermore, Changes in foreign currency exchange rates could materially adversely affect our business, results of operations or financial condition.
In our operations, there are transactions and balances denominated in currencies other than the U.S. dollar (which is the currency used to report our results of operations and financial condition in our financial statements), consisting primarily of the Australian dollar. To the extent our assets and liabilities denominated in Australian dollars as of June 30, 2025 are not hedged, we estimate that a 5% change in the exchange rate versus the U.S. dollar would expose us to foreign currency gains or losses of $19.3 million.
In addition, all of our facilities are located in Australia, a majority of our officers and employees are residents in Australia and substantially all of our expenses are payable in Australian dollars. In the event that the U.S. dollar weakens
compared with the Australian dollar, our results of operations or financial condition may be adversely affected, perhaps substantially.
We have engaged in transactions with our affiliates and expect to do so in the future. The terms of such transactions and the resolution of any conflicts that may arise may not always be in our or our stockholders’ best interests.
We have engaged in transactions and expect to continue to engage in transactions with affiliated companies. Related party transactions can create the possibility of conflicts of interest with regard to our management. Such a conflict could cause an individual in our management to seek to advance his or her economic interests above ours. Further, the appearance of conflicts of interest created by related party transactions could impair the confidence of our investors. The Audit & Risk Management Committee of our board of directors (“Audit & Risk Management Committee”) reviews related party transactions in accordance with our related party transaction policy; however, review of related party transactions by our Audit & Risk Management Committee does not mean such transactions will have the expected benefits and, as such, could have an adverse impact on our financial condition or results of operations.
Certain of our affiliates are participants in joint ventures or may have other rights with respect to properties in which we have interests. For instance, Daly Waters, which is controlled by Bryan Sheffield, is an equal owner of TB1 that owns our interests in EPs 76, 98 and 117. Certain actions, such as a sale of property or incurrence of indebtedness, will require the approval of Daly Waters or its representatives on the board of TB1. In addition, we have granted Daly Waters Royalty, which is controlled by Bryan Sheffield, and certain of our directors ORRIs in certain of the permits we have interests in. On May 12, 2025, TR West, as seller, and the Company, as seller guarantor, and DWE entered into an Asset Sale Agreement. See “Business and Properties-Agreements Relating to the Development of our Assets” in this report and “Related Person Transactions” included in the 2025 Proxy Statement for further information.
Our certificate of incorporation and bylaws, as well as Delaware law, contain provisions that could discourage acquisition bids or merger proposals, which may adversely affect the market price of our CDIs and common stock.
Our certificate of incorporation authorizes our board of directors to issue preferred stock without stockholder approval. If our board of directors elects to issue preferred stock, it could be more difficult for a third-party to acquire us. In addition, some provisions of our certificate of incorporation and bylaws could make it more difficult for a third-party to acquire control of us, even if the change of control would be beneficial to our stockholders, including:
•limitations on the removal of directors;
•our classified board of directors with directors serving staggered three-year terms;
•limitations on the ability of our stockholders to call special meetings;
•establishing advance notice provisions for stockholder proposals and nominations for elections to the board of directors to be acted upon at meetings of stockholders;
•the requirement that the affirmative vote of the holders of at least 662⁄3% in voting power of all the then-outstanding shares of our stock be obtained to amend and restate our existing bylaws or to remove directors;
•the requirement that the affirmative vote of the holders of at least 662⁄3% in voting power of all the then-outstanding shares of our stock be obtained to amend our certificate of incorporation;
•providing that the board of directors is expressly authorized to adopt, or to alter or repeal our bylaws; and
•establishing advance notice and certain information requirements for nominations for election to our board of directors or for proposing matters that can be acted upon by stockholders at stockholder meetings.
Our certificate of incorporation designates the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, employees or agents.
Our certificate of incorporation provides that, to the fullest extent permitted by law, and unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware (or, in the event that the Chancery Court does not have jurisdiction, the Superior Court of the State of Delaware (Complex Commercial Litigation Division) or the federal district court for the District of Delaware) will be the sole and exclusive forum for any claims that (i) are based
upon a violation of a duty by a current or former director or officer or stockholder in such capacity or (ii) as to which Title 8 of the Delaware Code confers jurisdiction upon the Court of Chancery, in each such case subject to such Court of Chancery having personal jurisdiction over the indispensable parties named as defendants therein. Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder. However, our certificate of incorporation provides that federal district courts of the United States of America will be the sole and exclusive forum for claims under the Securities Act. Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder. As a result, the forum provision in our certificate of incorporation will not apply to suits brought to enforce any duty or liability created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction. We will inform our investors in each report filed in accordance with the Exchange Act in which we describe the terms of our common stock that the forum provision in our certificate of incorporation will not apply to suits brought to enforce any duty or liability created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction.
These provisions may have the effect of discouraging lawsuits against us or our directors, officers, employees or agents. Any person or entity purchasing or otherwise acquiring any interest in shares of capital stock of the Company will be deemed to have notice of and consented to the forum provisions in our certificate of incorporation. However, the enforceability of similar forum provisions in other companies’ certificates of incorporation has been challenged in legal proceedings, and it is possible that a court could find these types of provisions to be unenforceable. In this regard, stockholders may not be deemed to have waived our compliance with the federal securities laws and the rules and regulations thereunder, including Section 22 of the Securities Act. If a court were to find these provisions of our certificate of incorporation inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect our business, financial condition or results of operations.
We do not expect to generate positive cash flow until at least 2026. As a result we do not expect to pay dividends on our CDIs or common stock in the foreseeable future. Consequently, the ability of CDI holders and common stockholders to achieve a return on investment will depend on appreciation in the trading price of our CDIs and common stock.
We do not anticipate generating positive cash from operations until 2026, at the earliest. Additionally, at such time we do generate positive cash flow, we anticipate that we will retain all of our future earnings for use in the operation of our business and for general corporate purposes. As a result, we do not expect to pay dividends on our CDIs or common stock in the foreseeable future. Any determination to pay dividends in the future will be at the sole discretion of our board of directors. Accordingly, investors must rely on sales of their CDIs or common stock after price appreciation, which may never occur, as the only way to realize any future gains on their investments.
We may issue preferred stock whose terms could adversely affect the voting power or value of our CDIs and common stock.
Our certificate of incorporation authorizes us to issue, without the approval of our stockholders, one or more classes or series of preferred stock having such designations, preferences, limitations and relative rights, preferences over our common stock respecting dividends and distributions, as our board of directors may determine. The terms of one or more classes or series of preferred stock could adversely impact the voting power or value of our common stock. For example, we might grant holders of preferred stock the right to elect some number of our directors in all events or on the happening of specified events or the right to veto specified transactions. Similarly, the repurchase or redemption rights or liquidation preferences we might assign to holders of preferred stock could affect the residual value of our common stock.
We have identified a material weakness in our internal control over financial reporting. Any material weakness may cause us to fail to timely and accurately report our financial results or result in a material misstatement of our financial statements.
Subject to applicable reporting requirement exemptions we take advantage of as a newly reporting company and as an emerging growth company, we are required to comply with the SEC rules implementing Sections 302 and 404 of the SOX, which require management to certify financial and other information in our quarterly and annual reports and provide an annual management report on the effectiveness of controls over financial reporting. Effective internal control over financial reporting is necessary for us to provide reliable and timely financial reports and, together with adequate disclosure controls and procedures, are designed to reasonably detect and prevent fraud. We are also required to report any material weaknesses in such internal control. A material weakness is a deficiency, or a combination of deficiencies, in internal
control over financial reporting such that there is a reasonable possibility that a material misstatement of our financial statements will not be prevented or detected on a timely basis.
In connection with the audit of our financial statements for fiscal years 2024 and 2025, we identified deficiencies in our internal control over financial reporting, which in the aggregate, constituted a material weakness. We determined that in both fiscal years, we had deficiencies relating to insufficiently designed and operating internal control over financial reporting, including: i) lack of sufficient evidence retained of the performance of internal controls, ii) insufficient resources in key accounting and finance roles leading to inadequate segregation of duties, iii) lack of manage access and manage change IT general controls over the cloud-based enterprise resource planning system, and iv) accounting for complex transactions in accordance with GAAP, which in the aggregate constitute a material weakness.
If our steps are insufficient to successfully remediate the material weakness and otherwise establish and maintain an effective system of internal control over financial reporting, the reliability of our financial reporting, investor confidence in us, and the value of our common stock could be materially and adversely affected. We can give no assurance that this implementation will remediate this deficiency in internal control or that additional material weaknesses in our internal control over financial reporting will not be identified in the future. Our failure to implement and maintain effective internal control over financial reporting could result in errors in our financial statements that could result in a restatement of our financial statements or cause us to fail to meet our periodic reporting obligations. For as long as we are an “emerging growth company” under the JOBS Act, our independent registered public accounting firm will not be required to attest to the effectiveness of our internal control over financial reporting pursuant to Section 404.
Once we no longer qualify as an “emerging growth company,” we will be required to have our independent registered public accounting firm provide an attestation report on the effectiveness of our internal control over financial reporting. An independent assessment of the effectiveness of our internal control over financial reporting could detect problems that our management’s assessment might not. Undetected material weaknesses in our internal control over financial reporting could lead to financial statement restatements and require us to incur the expense of remediation. An adverse report may be issued if our independent registered public accounting firm is not satisfied with the level at which our controls are documented, designed or operating.
We cannot be certain that our efforts to develop and maintain our internal controls will be successful, that we will be able to maintain adequate controls over our financial processes and reporting in the future or that we will be able to comply with our obligations under Section 404 of the SOX. Any failure to develop or maintain effective internal controls, or difficulties encountered in implementing or improving our internal controls, could harm our operating results or cause us to fail to meet our reporting obligations. Ineffective internal controls could also cause investors to lose confidence in our reported financial information, which would likely have a negative effect on the trading price of our CDIs and common stock.
For as long as we are an emerging growth company, we will not be required to comply with certain reporting requirements, including those relating to accounting standards and disclosure about our executive compensation, which apply to other public companies.
We are classified as an “emerging growth company” under the JOBS Act. For as long as we are an emerging growth company, which may be up to five full fiscal years, unlike other public companies, we will not be required to, among other things, (i) provide an auditor’s attestation report on management’s assessment of the effectiveness of our system of internal control over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act, (ii) comply with any new requirements adopted by the Public Company Accounting Oversight Board requiring mandatory audit firm rotation or a supplement to the auditor’s report in which the auditor would be required to provide additional information about the audit and the financial statements of the issuer, (iii) provide certain disclosure regarding executive compensation required of larger public companies or (iv) hold nonbinding advisory votes on executive compensation. We will remain an emerging growth company for up to five years, although we will lose that status sooner if we have more than $1.235 billion of revenues in a fiscal year, have more than $700.0 million in market value of our common stock held by non-affiliates or issue more than $1.0 billion of non-convertible debt over a three-year period.
To the extent that we rely on any of the exemptions available to emerging growth companies, you will receive less information about our executive compensation and internal control over financial reporting than issuers that are not emerging growth companies. If some investors find our common stock to be less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.
Because we have elected to take advantage of the extended transition period pursuant to Section 107 of the JOBS Act, our financial statements may not be comparable to those of other public companies.
Section 107 of the JOBS Act provides that an emerging growth company can use the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. This permits an emerging growth company to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We are choosing to take advantage of this extended transition period and, as a result, we will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for private companies. Accordingly, our financial statements may not be comparable to companies that comply with public company effective dates, and our stockholders and potential investors may have difficulty in analyzing our operating results by comparing us to such companies.
Our outstanding CDIs are listed on the ASX and are freely tradable in the public markets in Australia. Trading in our CDIs may have a material adverse effect on the trading price of our common stock on the NYSE.
Our common stock is traded on the NYSE and our CDIs are traded on ASX. The CDIs are, in general, the economic equivalent of shares of our common stock and, as a result, the trading price of the CDIs on the ASX likely affects the trading price of our common stock on the NYSE, and vice versa. The trading price of the CDIs may be influenced by factors different from those that affect the trading price of our common stock on the NYSE and, as discussed below in these risk factors, may be influenced by arbitrage activities. In addition, holders of shares of our common stock may deliver those shares to the depositary for the CDIs in exchange for CDIs.
Trading in our securities on these markets takes place using different currencies (U.S. dollars on NYSE and Australian dollars on the ASX), and at different times (resulting from different time zones, trading days and public holidays in the United States and Australia). The trading prices of our securities on these two markets may differ due to these and other factors, including the fact that ASX and NYSE have different criteria for trading halts as well as different listing rules and disclosure requirements. Any decrease in the price of our CDIs on the ASX could cause a decrease in the trading price of our common stock on the NYSE.
The different characteristics of the capital markets in Australia and the United States may negatively affect the trading prices of our CDIs and common stock and may limit our ability to take certain actions typically performed by a U.S. company.
We are subject to ASX listing rules with respect to our CDIs, and associated Australian regulatory requirements, and concurrently list our shares on the NYSE as well, which has its own listing and regulatory requirements. Such exchanges have different trading hours, trading characteristics (including trading volume and liquidity), trading and listing rules, and investor bases (including different levels of retail and institutional participation). As a result of these differences, the trading prices of our CDIs and our common stock may not be the same, even allowing for currency differences. Fluctuations in the price of our common stock due to circumstances peculiar to the U.S. capital markets could materially and adversely affect the price of the CDIs, or vice versa. Certain events having significant negative impact specifically on the Australian capital markets may result in a decline in the trading price of our common stock notwithstanding that such event may not impact the trading prices of securities listed in the United States generally or to the same extent, or vice versa.
In addition, any shares of common stock received in exchange for CDIs will be considered restricted securities (as that term is defined in Rule 144 of the Securities Act) and will bear a legend restricting transfer. Holders must cause the restrictive legend to be removed from such shares of common stock in order for the shares to be freely transferable and eligible to trade on the NYSE. As a result, holders of CDIs may not initially be able to freely trade into U.S. public markets, which may result in trading price differences between our common stock on the NYSE and our CDIs on the ASX.
Our ability to raise additional capital may be significantly limited by listing rules of the ASX that limit the amount of common stock that we are permitted to issue without stockholder approval.
Limitations on new share issuances under ASX listing rules may significantly limit or prevent us from raising additional capital by issuing and selling shares of our common stock or other securities when such additional capital is required. In particular, the ASX listing rules will prohibit us from issuing, during any 12-month period, shares of our common stock in an amount greater than 15% of the total number of shares of our common stock then outstanding without the affirmative vote of the holders of a majority of the outstanding shares of our common stock. As discussed elsewhere in this report, we will require substantial additional financing to develop and commercialize our resources and execute our strategy and, because we do not have any revenues from natural gas sales and would likely be unable to raise capital by
borrowing funds, we will be dependent primarily upon issuing and selling additional shares of common stock to obtain such financing. The foregoing listing rule of the ASX is substantially more restrictive than the comparable NYSE rule and, even with the approval of our shareholders to permit us to issue up to 25% of the total number of shares of our common stock then outstanding during the 12-month period commencing on the date we are admitted to the official list of the ASX, this rule may significantly limit or prevent us from raising funds by issuing and selling shares of our common stock, which may have a material adverse effect on our results of operations, financial condition and the development of our business. Moreover, seeking shareholder approval to issue common stock is likely to take considerable time and expense and there can be no assurance that any such approval will be given in the future.
An investor may have limited ability to bring an action against us or against our directors and officers, or to enforce a judgment against us or them, because we conduct a majority of our operations in Australia, and many of our directors and officers reside outside the United States.
We conduct substantially all of our operations in Australia. Many of our directors and officers and certain other persons named in this report are citizens and residents of countries other than the United States and a portion of the assets of the directors and officers and certain other persons named in this report and substantially all of our assets are located outside of the United States. As a result, it may not be possible or practicable for you to effect service of process within the United States upon such persons or to enforce against them or against us judgments obtained in U.S. courts predicated upon the civil liability provisions of the federal securities laws of the United States. Even if you are successful in bringing such an action, there is doubt as to whether Australian courts would enforce certain civil liabilities under U.S. securities laws in original actions or judgments of U.S. courts based upon these civil liability provisions. In addition, awards of punitive damages in actions brought in the United States or elsewhere may be unenforceable in Australia or elsewhere outside the United States. An award for monetary damages under U.S. securities laws would be considered punitive if it does not seek to compensate the claimant for loss or damage suffered and is intended to punish the defendant. The enforceability of any judgment in Australia will depend on the particular facts of the case as well as the laws and treaties in effect at the time. The United States and Australia do not currently have a treaty or statute providing for recognition and enforcement of the judgments of the other country (other than arbitration awards) in civil and commercial matters. As a result, our holders of our common stock may have more difficulty in protecting their interests through actions against us, our management or our directors than would shareholders of a corporation operating within the United States.
As a result of listing CDIs on the ASX, we are subject to the listing rules of the ASX, which may strain our resources, divert management’s attention and affect our ability to manage our business or raise additional capital.
As a result of listing CDIs on the ASX, we are subject to the listing rules of the ASX, which may strain our resources, divert management’s attention and affect our ability to manage our business or raise additional capital. The listing rules of the ASX differ from, and in some cases are more restrictive than, the rules and requirements of the NYSE, including restrictions that:
•limit non-executive director compensation to a maximum amount approved by shareholders at a general meeting;
•require that the terms of every class of our securities, including any preferred stock, be approved by the ASX;
•prohibit us from removing or changing the voting rights or dividend rights (if any) of our securities, except in certain circumstances;
•specify certain terms and conditions of options and rights plans;
•prohibit issuing equity securities without shareholder approval in the three months after we receive any notice in writing that a person proposes to make a takeover bid;
•limit the issuance of restricted (escrowed) securities; and
•prohibit “golden parachutes” or other termination benefits for officers upon a change in ownership or control of us.
These listing rules may, in some cases, limit our ability to take certain actions that would otherwise be permitted by NYSE rules and may affect our ability to manage our business and to attract and retain key management and scientific
personnel. In addition, the listing rules of the ASX include approval and reporting requirements that differ from the requirements under the NYSE rules, such as requirements to:
•comply with required timetables for issuance of equity securities;
•deliver notice to the ASX prior to the release of restricted (escrowed) securities;
•file quarterly, half-yearly and annual periodic reports that include specific disclosure required by the listing rules of the ASX;
•obtain stockholder approval for certain related-party transactions and for securities issuances to directors;
•deliver drafts to the ASX of charter documents, debt and convertible securities documents, certain meeting notices and documents sent to certain holders of securities; and
•prior to release to any other person, release announcements through the ASX as the central collection point for market sensitive information.
Compliance with these additional rules will increase our legal and financial compliance costs, make some activities or transactions more difficult, time-consuming or costly, may limit or prevent us from raising additional capital by issuing and selling shares of our common stock or other securities and increase demand on our systems and resources. We applied to the ASX for, and received, certain waivers from the application of some of its listing rules; however, such waivers will not afford us relief from all of the increased restrictions and requirements imposed by such listing rules. Increases in our costs and expenses associated with compliance with the ASX listing rules will adversely impact our results of operations and financial condition. In addition, limitations on new share issuances under ASX listing rules may limit or prevent us from raising additional capital by issuing and selling shares of our common stock or other securities when such additional capital is required, which may have a material adverse effect on our results of operations, financial condition and the development of our business. See “-Our ability to raise additional capital may be significantly limited by listing rules of the ASX that limit the amount of common stock that we are permitted to issue without stockholder approval.”
The market price of our common stock may be adversely affected by arbitrage activities.
Investors may seek to profit by exploiting the difference, if any, in the price of our shares of common stock as reflected by the trading price of our CDIs, which will represent shares of our common stock, on the ASX and the trading price of our shares of common stock on the NYSE. Such arbitrage activities could cause the price of our common stock or the CDIs representing our common stock, as the case may be, in the market with the higher value to decrease to the price set by the market with the lower value or could otherwise adversely affect the market price of our common stock. These arbitrage risks may be increased by the fact that our common stock is be quoted in U.S. dollars on the NYSE while our CDIs will be quoted in Australian dollars on the ASX, which may also give investors the opportunity to exploit the impact of fluctuations in currency exchange rates on the market price of our common stock and the CDIs.
Changes in accounting standards issued by the Financial Accounting Standards Board (“FASB”) or other standard-setting bodies may adversely affect our financial statements.
Our financial statements are prepared in accordance with GAAP as defined in the Accounting Standards Codification (“ASC”) of the FASB. From time to time, we are required to adopt new or revised accounting standards or guidance that are incorporated into the ASC. It is possible that future accounting standards we are required to adopt could change the current accounting treatment that we apply to our consolidated financial statements and that such changes could have a material adverse effect on our financial condition and results of operations.
In addition, the FASB is working on several projects with the International Accounting Standards Board, which could result in significant changes as GAAP converges with International Financial Reporting Standards (“IFRS”), including how our financial statements are presented. Furthermore, the SEC is considering whether and how to incorporate IFRS into the U.S. financial reporting system. The accounting changes being proposed by the FASB will be a complete change to how we account for and report significant areas of our business. The effective dates and transition methods are not known; however, issuers may be required to or may choose to adopt the new standards retrospectively. In this case, issuers would report results under the new accounting method as of the effective date, as well as for all periods presented. Any such changes to GAAP or conversion to IFRS would impose special demands on issuers in the areas of governance, employee training, internal controls and disclosure and would likely affect how we manage our business.

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ITEM 1B. UNRESOLVED STAFF COMMENTS
ITEM 1B. UNRESOLVED STAFF COMMENTS
Not applicable.

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ITEM 2. PROPERTIES

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ITEM 3. LEGAL PROCEEDINGS
ITEM 3. LEGAL PROCEEDINGS
Other than given as below, as of the date of this report, we are not a party to any material pending legal proceedings, nor are we aware of any material civil proceeding or government authority contemplating any legal proceeding, and to our knowledge, no such proceedings by or against us have been threatened. We anticipate that we and our subsidiaries may from time to time in the future become subject to claims and legal proceedings arising in the ordinary course of business. It is not feasible to predict the outcome of any such proceedings, and we cannot ensure that their ultimate disposition will not have a materially adverse effect on our business, financial condition, cash flows or results of operations.
On July 4, 2024, the Environment Centre Northern Territory (“ECNT”) lodged an Originating Application in the Northern Territory Civil and Administrative Appeals Tribunal (“NTCAT”) for a merits review of the Minister for
Environment, Climate Change and Water Security’s (“Minister’s”) approval of TB1 Operator’s Shenandoah South Exploration & Appraisal Program EP98 and EP117 Environment Management Plan (“Shenandoah EMP”) (“NTCAT Merits Review”). On August 20, 2024, the TB1 Operator was added as a respondent to the NTCAT Merits Review. The NTCAT Merits Review commenced by ECNT under the Petroleum Act 1984 (NT) and the Petroleum (Environment) Regulations 2016 (NT). ECNT are seeking an order that the Minister’s Original Decision is set aside and substituted with a decision that the Tribunal Member is not satisfied the information provided in the Shenandoah EMP is sufficiently compliant with the Petroleum (Environment) Regulations 2016 (NT), including in relation to: (a) risks of wastewater spills and (b) risks in relation to inter-aquifer connectivity and an order that the Shenandoah EMP should be referred to the NT EPA for an independent assessment or, in the alternative, an order that varies the Minister’s original decision and establishes conditions in the Shenandoah EMP. On August 25, 2025 the NTCAT granted leave for the substantive proceedings to be withdrawn by the ECNT. This followed the dismissal of the ECNT’s stay application, with the NTCAT handing down its reason for dismissing the application on November 27, 2025 and the dismissal of the ECNT’s application to issue summonses and admit further expert reports, with the NTCAT handing down its reasons for dismissing the application on July 15, 2025.
On December 6, 2024, Lock the Gate Alliance Ltd (“Lock the Gate”) lodged an Originating Application in the Federal Court of Australia seeking an injunction under s475(2) of the Environment Protection and Biodiversity Conservation Act 1999 (Cth) (“EPBC Act”), to restrain TB1 Operator from conducting the Shenandoah South Pilot Project and a declaration under §21 of the Federal Court of Australia Act 1976 (Cth) that the Shenandoah South Pilot Project is an action which involves unconventional gas development and is likely to have a significant impact on a water resource within the meaning of §§24D and 24E of the EPBC Act (the “Originating Application”). The Originating Application was heard in the Federal Court of Australia from June 23 to 26, and August 14, 2025 before Owens J who reserved Judgment.

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ITEM 4. MINE SAFETY DISCLOSURE
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
PART II

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ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Our common stock is currently listed on the New York Stock Exchange under the symbol “TBN.”
As of September 24, 2025, there were 44 holders of record of our common stock.
We have not paid any cash dividends on our common stock to date. The payment of cash dividends in the future will be dependent upon our revenues and earnings, if any, capital requirements and general financial condition. The payment of any cash dividends will be subject to the discretion of our board of directors.
Information with respect to securities authorized for issuance under equity compensation plans is included herein under Item 12 of this report.
Except as previously disclosed on Current Reports on Form 8-K, there were no unregistered sales of equity securities for the year ended June 30, 2025.
No shares of the Company’s common stock were repurchased during the three months ended June 30, 2025.

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ITEM 6. SELECTED FINANCIAL DATA

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) summarizes the significant factors affecting the operating results, financial condition, liquidity and capital resources, and cash flows of our Company for the years ended June 30, 2025 and 2024. This MD&A should be read in conjunction with, and is qualified in its entirety by, our consolidated financial statements, the accompanying notes to consolidated financial statements and other financial information included in this report. Except for historical information, the matters discussed in this MD&A contain various forward-looking statements that involve risks, uncertainties and assumptions and other important factors and are based upon judgments concerning various factors beyond our control. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of many factors, including those discussed under “Item 1A - Risk Factors” and elsewhere in this report, any of which could cause the Company’s actual results, performance or achievements, or industry results, to differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements. All forward-looking statements speak only as of the date on which they are made. We undertake no obligation to update such statements to reflect events that occur or circumstances that exist after the date on which they are made. Additionally, you should refer to the “Cautionary Note Regarding Forward-Looking Statements.”
Overview
We are an early stage, growth-driven independent natural gas exploration and production company focused on an integrated approach to the commercial development of the natural gas resources in the Beetaloo located within the Northern Territory of Australia. We hold approximately 1.9 million net prospective acres and are the largest acreage holder in the Beetaloo Basin. We intend to continue to develop our resources and regularly review acquisition opportunities that meet our strategic and financial objectives.
We are focused on developing early stage, unconventional gas resources within our portfolio. Our key assets are (i) a 25% non-operated working interest in EP 161, (ii) a 38.75% working interest in EPs 76, 98 and 117, where we are the operator, and (iii) a 100% working interest in EPs 136, 143 and EP(A) 197, where we are the operator, all of which are located in the Beetaloo.
Recent Developments
Following a special meeting of stockholders, on July 22, 2025, the second tranche of the Company’s sale of approximately $55.4 million of common stock in a private investment in public equity closed and the Company issued 940,729 shares of common stock at a price per share of $17.74. Additionally, on July 22, 2025, the Company issued 112,740 shares of Common Stock at a price of $17.74 per share to Macquarie Bank Limited as prepayment for certain fees that will become due under the Performance Bond Facility Agreement between Tamboran (West) Pty Limited, as borrower, Tamboran Resources Pty Ltd, as guarantor, and Macquarie Bank Limited, as lender, dated December 19, 2024.
On July 27, 2025, we entered into a Cooperation Agreement (the “Cooperation Agreement”) with Bryan Sheffield, Sheffield Holdings, LP and certain other affiliated entities party thereto (collectively, the “Sheffield Group”). In connection with the Cooperation Agreement, the Company agreed, among other things, to appoint (i) Scott D. Sheffield as a Class II director to the board of directors, effective immediately upon the execution of the Cooperation Agreement, with a term expiring at the Company’s 2025 annual meeting of stockholders and (ii) Phillip Z. Pace as a Class III director to the board of directors, effective upon the execution of the Cooperation Agreement with a term expiring at the Company’s 2026 annual meeting of stockholders. In connection with the Cooperation Agreement, the members of the Sheffield Group have agreed to abide by certain customary standstill restrictions and voting commitments that will remain effective from July 27, 2025 until the earlier of (i) the Company’s 2028 annual meeting of stockholders and (ii) December 31, 2028, unless earlier expired in accordance with the terms of the Cooperation Agreement.
On July 28, 2025, the employment of Joel Riddle, the former Chief Executive Officer and board member of the Company, was terminated and consequently Mr. Riddle resigned from the board. Additionally, John Bell Sr. retired from the board effective upon the execution of the Cooperation Agreement. The board appointed Dick Stoneburner, Chairman of the board, as interim Chief Executive Officer. Mr. Stoneburner was an independent member of the board prior to the appointment and will continue to serve on the board.
On August 14, 2025, the lease of modular buildings and related equipment (“Stage 1 and 2 Hire Goods”) commenced pursuant to the Hire Terms and Conditions (the “Hire Conditions”) entered into with Northern Transportables Pty Ltd on June 9, 2025 to support the on-site operations. Pursuant to the Hire Conditions, Tamboran is required to pay A$223,826 per month for Stage 1 and 2 Hire Goods with a minimum hire period of 18 months. The Hire Conditions also provide an option for Tamboran to hire additional assets (“Stage 3 Hire Goods”) at a hire rate of A$395,536 per month for a minimum hire period of seven months.
On September 2, 2025, the Beetaloo Joint Venture received approval from the NT Government to sell appraisal gas from its exploration permits in the Beetaloo Basin under the Beneficial Use of Gas (“BUG”) legislation. This is the first approval granted by the NT Government through the new BUG legislation and follows the recent consent from Native Title Holders for the sale of up to 60 TJ per day from the Shenandoah South Pilot Project over a three-year period. The Beetaloo Joint Venture now holds all necessary approvals to sell gas from the Shenandoah South Pilot Project. The project aims to begin gas sales of up to 40 TJ per day under the NTGGSA commencing in mid-2026, subject to weather condition.
Market Outlook
We believe natural gas can play a key role in supporting the emissions reduction targets of many regional markets through the transition of coal-to-gas fired power plants. To date the increasing global demand for LNG, as well as under-investment in new supply, is expected to lead to LNG supply shortages.
We have the potential, subject to achieving commercial viability in the Beetaloo, to supply natural gas to both Australian domestic and international LNG markets, which would support countries in the region in achieving their GHG emission reduction targets and help reduce global GHG emissions if LNG is adopted as an alternative to coal fired power. We are in the initial phase of development of our operations. Successful commercialization of the Beetaloo will require the development of the infrastructure necessary to conduct our business as planned on commercially acceptable terms. In addition, success of our business will rely on the Australian East Coast and the Asian LNG markets maintaining elevated prices relative to North America to offset the higher costs associated with developing infrastructure in the Beetaloo. The natural gas industry is cyclical and commodity prices are highly volatile. We expect the natural gas markets will continue to be volatile in the future. Our future revenue, profitability and future growth are highly dependent on the prices we will receive for natural gas production. See our risk factor titled “Natural gas prices are volatile. A reduction or sustained decline in prices may adversely affect our business, financial condition or results of operations and our ability to meet our financial commitments or raise capital.”
Global, industry-wide supply chain disruptions have resulted in widespread shortages of labor, materials and services. Such shortages have resulted in our facing significant cost increases for labor, materials and services. Principally, commodity costs for steel and chemicals required for drilling, higher transportation and fuel costs and annual wage increases have increased our operating costs for fiscal years 2024 and 2025. Typically, as the price for natural gas increases, so do associated costs. Conversely, in a period of declining prices, associated cost declines are likely to lag and may not adjust downward in proportion to prices. Some supply chain constraints and inflationary pressures could persist into fiscal year 2026 but are expected to plateau, however we cannot accurately predict future supply chain constraints and inflation. We cannot predict the future inflation rate but to the extent inflation remains elevated, we may experience cost increases in our operations, including costs for drill rigs, workover rigs, hydraulic fracturing fleets, tubulars and other well
equipment, as well as increased labor costs. If we are unable to recover higher costs through higher commodity prices, our future revenue stream would be significantly impacted.
We are taking actions to mitigate supply chain and inflationary pressures. We are monitoring the situation and assessing its impact on our business, including with respect to our partners. For example, we pre-purchased long lead materials including casing and tubulars, chemicals and downhole equipment necessary for our planned development for fiscal year 2026. We have in place a 10-year option with H&P to contract for up to four additional FlexRigs®. We are working closely with other suppliers and contractors to ensure availability of supplies on site, especially fuel, steel and chemical supplies which are critical to many of our operations and are working on diversifying suppliers. However, these mitigation efforts may not succeed or be insufficient.
Factors that Affect Comparability of Future Results
Our financial condition and results of operations for the periods presented and future periods may not be comparable, either from period to period or going forward primarily for the following reasons:
Recent Events and Formation Transactions
Tamboran was incorporated as a Delaware corporation on October 3, 2023 and does not have historical financial operating results prior to the Corporate Reorganization effective December 13, 2023. As a result of the Corporate Reorganization, Tamboran became the parent company of TR Ltd., and for financial reporting purposes, the financial statements of TR Ltd. became the financial statements of Tamboran. See “Business and Properties-General Development of Business and Corporate Reorganization.”
Success in our Development of our Natural Gas Properties
Because we have no operating history in the production of natural gas, our future results of operations and financial condition will be directly affected by our ability to develop and commercialize our assets through our drilling programs and future sales and marketing.
Natural Gas Revenue
We have not generated any revenue from natural gas production since inception due to the current stage of our operations, which is exploration drilling of our assets to test their commercial viability. If and when we do commence natural gas production, we expect to generate revenue from such production. No revenue from natural gas production is reflected in our financial statements.
Operating Costs and Expenses
We have not yet commenced natural gas production. If and when we do commence production, we will incur additional operating costs and expenses, workover costs, taxes and royalty fees. Our operating costs and expenses consisted of the following during fiscal years 2024 and 2025: salaries, share based compensation, and related taxes and benefits of personnel employed by us, professional fees for consultants, auditors, tax advisors and legal services, depreciation and amortization of corporate assets, the loss on sale of assets due to the sale of rigs in fiscal year 2024 and 2025, accretion of asset retirement obligations, exploration expenses, LNG feasibility studies, a Checkerboard fee that was settled in shares of common stock, and general and administrative expenses.
Acquisitions
We may continue to grow our operations and financial results through strategic accretive acquisition opportunities that may arise relevant to our Beetaloo strategy. We regularly review acquisition opportunities and intend to pursue acquisitions that meet our strategic and financial targets. Additionally, we may from time to time effect divestitures of certain of our non-core assets.
Supply, Demand, Market Risk and the Impact on Natural Gas Prices
As discussed above in “-Market Outlook,” the natural gas industry historically has been cyclical with highly volatile commodity prices. Natural gas prices are subject to large fluctuations in response to relatively minor changes in the demand for natural gas. Prices are affected by current and expected supply and demand dynamics, including the market disruptions resulting from the Russian-Ukraine war and the Middle East conflict, the changing U.S. regulatory environment and trade and tariffs policies, and related erosion of demand for natural gas, supply growth driven by advances in drilling
and completion technologies, resulting in increased supply in the global market. Other factors impacting supply and demand include weather conditions (including severe weather events), pipeline capacity constraints, inventory storage levels, basis differentials, export capacity, supply chain quality and availability, as well as other factors, the majority of which are outside of our control. These commodity prices are likely to remain volatile in the future. Sustained periods of low natural gas prices could materially and adversely affect our financial condition, our results of operations, the quantities of natural gas that we can economically produce and our ability to access capital. Since we have not generated revenues, these key factors will only affect us when we produce and sell natural gas.
U.S. Reporting Company Expenses
Prior to our Corporate Reorganization, the ordinary shares of TR Ltd. were listed on the ASX. Following our IPO, and the listing of our common stock on the NYSE, we are subject to the periodic reporting requirements of the Exchange Act. Although we have been listed on the ASX and have been required to file financial information and make certain other filings with the ASX, our status as a U.S. reporting company under the Exchange Act will cause us to incur additional legal, accounting and other expenses that we have not previously incurred, including costs related to compliance with the requirements of the Sarbanes-Oxley Act. These incremental legal and financial compliance expenses are not included in our historical results of operations; therefore, our results of operations for future periods may not be comparable to our results of operations for the periods under review.
Results of Operations
Our functional currency is the Australian dollar, and our reporting currency is the U.S. dollar. For revenues and expenses reported in any period, we use the average currency exchange rate between U.S. dollars and Australian dollars for the period. For assets and liabilities, we use the current currency exchange rate as at the end of the period, based on the same source. Given the fluctuations in currency exchange rates, we may experience changes in reported amounts from period to period that occur primarily as a result of these fluctuations and that are not reflective of actual changes in our business or operations.
Currently, we are exposed to foreign exchange risk, particularly with the U.S. dollar and Australian dollar, as a result of revenue and expenses that are denominated in each currency. It is our policy to limit the use of financial derivatives and seek risk mitigation through natural hedges. These natural hedges include the maintenance of U.S. dollar and Australian bank accounts and deposits. Because our functional currency is the Australian dollar, our reported financial results are subject to fluctuation resulting from changes in the U.S. dollar to Australian dollar exchange rate.
The following tables present selected financial information for the periods presented:
Years ended June 30,
2025 2024
Revenue and other operating income $ - $ -
Operating costs and expenses
Compensation and benefits, including stock-based compensation (9,397) (5,407)
Consultancy, legal and professional fees (6,531) (9,457)
Depreciation and amortization (86) (120)
Loss on remeasurement of assets classified as held for sale (376) (26)
Accretion of asset retirement obligations (1,042) (892)
Exploration expense (4,112) (2,161)
LNG feasibility study expenses (6,035) -
Checkerboard fee (5,950) -
General and administrative (5,787) (2,453)
Total operating costs and expenses (39,316) (20,516)
Other income (expense)
Interest income, net 1,551 691
Loss on extinguishment of debt - (3,884)
Fair value loss on convertible debt - (35)
Foreign exchange gain (loss), net (2,585) 36
Other income (expense), net 726 (143)
Total other income (expense) (308) (3,335)
Net loss (39,624) (23,851)
Foreign currency translation 2,769 (411)
Total comprehensive loss attributable to noncontrolling interest (3,254) (2,140)
Total comprehensive loss attributable to Tamboran Resources Corporation stockholders $ (33,601) $ (22,121)
Fiscal Years Ended June 30, 2024 and June 30, 2025
Revenue and other operating income. We have not yet commenced natural gas production. Therefore, we did not realize any revenue and other operating income during fiscal years 2025 and 2024, respectively.
Compensation and benefits, including stock based compensation. Compensation and benefits, including stock based compensation, increased by $4.0 million during fiscal year 2025, as compared to fiscal year 2024 due primarily to restricted stock units granted in August 2024 and increased headcount as compared to the prior period.
Consultancy, legal and professional fees. Consultancy, legal and professional fees decreased by $2.9 million during fiscal year 2025, as compared to fiscal year 2024 due primarily to professional fees related to implementation of the scheme of arrangement and IPO readiness incurred in the comparative period which did not recur in 2025.
Loss on sale of assets classified as held for sale. Tamboran recognized a loss on assets classified as held for sale amounting to $0.4 million during fiscal year 2025, primarily due to the write down of rig 403 to the fair value less costs to sell. In contrast, a loss on assets classified as held for sale amounting to $0.03 million was recognized during fiscal year 2024, primarily due to the sale of a smaller rig, rig 301.
Accretion of asset retirement obligations expense. For fiscal year 2025 an expense for accretion of asset retirement obligations of $1.0 million was recognized. The recognition of such an expense was primarily due to the accretion of asset retirement obligation liabilities in relation to all EPs, inclusive of EPs 76, 98, 117, 136 and 161, as well as the SPCF. As the Company drilled two additional wells and established the SPCF site, there was an incremental expense for accretion during the period.
Exploration expense. Exploration expense increased by $2.0 million during fiscal year 2025, as compared to fiscal year 2024 due primarily to the increase in activity of our non-operated permits in preparation for the next drilling program and additional subsurface expenses. Our exploration expense consisted of costs related to topographical, geographical and geophysical studies and other indirect expenditure.
LNG feasibility study expense. For fiscal year 2025, the Company incurred expenses of $6.0 million related to certain studies and pre-front-end engineering and design services related to the proposed NT LNG facility.
Checkerboard fee. For fiscal year 2025, the Company incurred an expense of $6.0 million related to the satisfaction of certain payment obligations to DWE under the TB1 Joint Venture Agreement. This obligation was satisfied through the issuance of common stock, subsequent to shareholder approval received in November 2024.
General and administrative. General and administrative costs increased by $3.3 million during fiscal year 2025, as compared to fiscal year 2024 primarily as a result of increased expenses related to insurance, headcount, travel, and other office and administrative fees.
Interest Income, net. Interest income, net increased by $0.9 million during fiscal year 2025, as compared to fiscal year 2024, primarily due to interest received from term deposits during the period.
Loss on extinguishment of debt. For fiscal year 2024, an expense for loss on extinguishment of debt of $3.9 million was recognized. The recognition of such an expense was due primarily to the extinguishment of payables to H&P in exchange of the issuance of the 5.5% Convertible Senior Note due in 2029 between Helmerich & Payne International Holdings, LLC, Tamboran Resources Corporation, and the guarantors thereto dated June 4, 2024, which was converted to common stock upon the IPO. There was no extinguishment of debt for fiscal year 2025.
Foreign currency translation. In fiscal year 2025 we recognized a foreign currency translation gain of $2.8 million, primarily due to the strengthening of the Australian Dollar as of June 30, 2025 in comparison to the average rate during the period. In fiscal year 2024, we recognized a foreign currency translation loss of $0.4 million, primarily due to slight weakening of the Australian Dollar as of June 30, 2024, as compared to July 1, 2023. Foreign exchange gains and losses resulting from the settlement of foreign currency transactions and from the translation at fiscal year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognized on our income statement.
Income Tax Expense. We have no income tax expense primarily due to operating losses incurred for fiscal years 2025 and 2024. We have provided a full valuation allowance on our net deferred tax asset because management has determined that it is more likely than not that we will not earn income sufficient to realize the deferred tax assets during a foreseeable future period. Management will continue to assess the potential for realizing deferred tax assets based upon income forecast data and the feasibility of future tax planning strategies and may record adjustments to the valuation allowance against deferred tax assets in future periods, as appropriate, that could have a material impact on the statement of operations.
Liquidity and Capital Resources
We are a development stage enterprise and will continue to be so until commencement of substantial production from our natural gas properties. We do not expect to generate any revenue from production until 2026, at the earliest, which will depend upon successful drilling results, additional and timely capital funding, and access to suitable infrastructure. Until then our primary sources of liquidity are expected to be cash on hand, net proceeds of the private placements received in July 2025, and funds from future private and public equity placements, debt funding and asset sales.
We expect to incur substantial expenses and generate significant operating losses as we continue to develop our natural gas prospects and as we:
•complete our current appraisal drilling, testing program and SPCF facility construction;
•develop and commercialize our assets, including development of pipelines, the proposed NT LNG facility and other infrastructure;
•opportunistically invest in additional natural gas assets adjacent to our current positions; and
•incur expenses related to operating as a public company and compliance with regulatory requirements.
Our future financial condition and liquidity will be impacted by, among other factors, the success of our exploration and appraisal drilling program, the number of commercially viable natural gas discoveries made, the quantities of natural gas discovered, the speed with which we can bring such discoveries to production, and the actual cost of exploration, our ability to identify and complete acquisition opportunities and appraisal and development of our prospects.
For the fiscal year ended June 30, 2026, we estimate that we will need to invest approximately $57 million to progress our upstream development plans. We expect the tranche two proceeds from the private placement received in July 2025, together with our existing cash on hand, to be sufficient to fund drilling of SS-4H, SS-5H and SS-6H and complete flow testing of SS-2H ST1. However, we may require significant additional funds earlier than we currently expect in order to execute our strategy as planned. We may seek additional funding through asset sales or public or private financings. Additional funding may not be available to us on acceptable terms or at all. In addition, the terms of any financing may adversely affect the holdings or the rights of our stockholders. For example, if we raise additional funds by issuing additional equity securities, further dilution to our existing stockholders will result. If we are unable to obtain funding on a timely basis, we may be required to significantly curtail one or more of our planned activities. We also could be required to seek funds through arrangements with collaborators or others that may require us to relinquish rights to some of our assets which we would otherwise develop on our own, or with a majority working interest.
Cash and Cash Equivalents
The following table summarizes our key measures of liquidity for the periods indicated (all dollar amounts are presented in thousands).
June 30,
2025 June 30,
Cash and cash equivalents $ 39,439 $ 74,746
As of June 30, 2025, we had $39.4 million in cash and cash equivalents. This balance represents a decrease of $35.3 million from June 30, 2024, primarily due to incoming funds from the greenshoe option exercised in July 2024, the sale of rig 403 in October 2024, R&D tax credits received in December 2024, cash calls received throughout the period, proceeds from our subscription agreements to institutional investors in May 2025, offset primarily by spending on operations on the SS-2H, SS-2H side track, and SS-3H pilot wells, SPCF facility long lead items and civil works, NT LNG pre-front-end engineering and design services, and other corporate expenditure in the fiscal period.
Capital Commitments
We had the following five-year capital commitments as of June 30, 2025 and June 30, 2024 which are not recognized as liabilities or payable in the consolidated statement of financial position (all dollar amounts are presented in thousands):
June 30,
2025 June 30,
Capital commitments:
Sweetpea Petroleum Pty Ltd $ 23,115 $ 23,283
EP 161 2,302 2,650
Beetaloo Joint Venture 75,630 62,642
Midstream 9,056 1,971
Sweetpea Commitments
As of June 30, 2025, Sweetpea committed to spend $23.1 million related to two licenses, EP 136 with total commitments of $14.0 million and EP 143 with total commitments of $9.1 million over the following five years.
A renewal application for EP 136 was submitted to the Department of Mining and Energy (“DME”) in September 2023, and approved in July 2024, granting a five-year extension for the period July 24, 2025 to July 23, 2030 with a minimum work program commitment of $14.0 million.
A variation application including suspension and extension of Term 2 to December 31, 2028 for EP 143 was submitted to DME in March 2025, and approved in May 2025. The total minimum work program commitments remain the same at $9.1 million with activity and associated spend being transferred within the extended license term.
EP 161
For the EP 161 working interest, we are obligated to contribute our share of expenses to uphold our stake in this permit, for which Santos Limited is the operator. Our commitment through March 2026 is $2.3 million based on the minimum work requirements. There are no minimum commitment requirements after March 2026.
Beetaloo Joint Venture
An application was submitted to DME in September 2024 to vary the year 2 and 3 work program, and was approved in November 2024. The terms of the Beetaloo Joint Venture continue to necessitate specific minimum work obligations through May 2028. These commitments include an expected spend of $75.6 million related to drilling and multi-stage hydraulic fracturing of four wells, 3D seismic survey, and subsurface studies, with expenditure across EP 76 of $10.7 million, EP 98 of $53.3 million and EP 117 of $11.6 million as well as subsurface studies.
Midstream
Committed spend for the SPCF project as of June 30, 2025, was $9.1 million which was related to the engineering, procurement, and construction management for the detailed design, engineering, planning, construction, testing, inspection and commissioning of the facility and major equipment procurement.
Cash Flows
The following table summarizes our cash flows for the periods indicated (in thousands):
Years Ended June 30,
2025 2024
Statement of Cash Flows:
Net cash used in operating activities $ (29,637) $ (11,398)
Net cash used in investing activities (98,768) (66,109)
Net cash from financing activities 101,058 146,385
Net Cash Used in Operating Activities
For fiscal year 2025, net cash used in operating activities was $29.6 million during which we incurred a net loss of $39.6 million, compared to net cash used in operating activities for fiscal year 2024 of $11.4 million, during which we incurred a net loss of $23.9 million. The net loss for fiscal year 2025 included the non-cash impacts of depreciation and amortization, stock-based compensation, loss on remeasurement of assets classified as held for sale, accretion of asset retirement obligations, interest expense, Checkerboard fee and foreign exchange differences. Additionally, in the year ended June 30, 2025, net unfavorable changes in operating assets and liabilities totaled $4.8 million, primarily consisting of a $3.3 million decrease in accounts payable and accrued expenses due to timing of our pay cycle during the fiscal period, a $1.3 million increase in trade and other receivables, and a $0.2 million increase in prepaid expenses and other assets.
Net Cash Used in Investing Activities
For fiscal year 2025, net cash used in investing activities was $98.8 million compared to $66.1 million for fiscal year 2024. In the current period there was spend on exploration and evaluation activities of $94.2 million in connection with the drilling, completion and stimulation of the 2025 drilling program, $15.6 million of spend related to SPCF, $0.3 million of spend related to sand mining, $2.8 million related to interest on financing lease liabilities, offset by proceeds from the sale of property, plant and equipment of $8.0 million due to the sale of rig 403 and the receipt of the R&D tax incentive of $6.2 million.
Net Cash from Financing Activities
For fiscal year 2025, net cash received from financing activities was $101.1 million compared to $146.4 million received for fiscal year 2024. This decrease was primarily due to $42.9 million in net proceeds from the issue of shares in connection with the Company’s capital raises in fiscal year 2025 in comparison to net proceeds of $134.6 million received in 2024. The Company also received $5.3 million of net proceeds from the issuance of common stock for which shares had not yet been issued as of June 30, 2025 and also made advanced payments of $0.8 million related to transaction costs. Other activity in the fiscal year included $61.5 million attributable to contributions from noncontrolling interest holders in connection with investments by Daly Waters, $0.5 million of advance contributions received from noncontrolling interest holders, repayments of finance lease liabilities of $7.8 million, and $0.5 million related to the payment of the performance bond facility establishment fee.
Critical Accounting Estimates
Management’s discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of our financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of certain assets, liabilities and related disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The following critical accounting policies relate to the more significant estimates and assumptions used in preparing the consolidated financial statements.
Accounting for Natural Gas Properties
We are in the exploration stage and have not yet realized any revenues from our operations. We group our EPs into areas of interest according to geographical and geological attributes. We use the successful efforts method of accounting for expenditure incurred in each area of interest. Under this method, all general exploration and evaluation costs such as geological and geophysical costs are expensed as incurred. The direct costs of acquiring the rights to explore, drilling exploratory wells and evaluating the results of drilling are capitalized as exploration and evaluation assets (as a part of unproved properties) pending the determination of the success of the well. If a well does not result in a successful discovery, the previously capitalized costs are immediately expensed.
Impairment of Natural Gas Properties
Where an indicator of impairment exists for an unproved property and it is determined that future appraisal drilling or development activities are unlikely to occur, an impairment expense is recorded. The impairment loss shall be measured as the amount by which the carrying amount of a long-lived asset (or asset group) exceeds its fair value. Upon approval of the commercial development of a project, the exploration and evaluation asset is classified as a development asset. Once production commences, development assets are transferred to property, plant and equipment and are depleted using the unit-of-production method based upon estimates of proved developed reserves.
Joint Interest Activities
Some of the Company’s exploration, development and production activities are conducted jointly with other entities whereby each party holds an undivided interest in each asset and is proportionately liable for each liability in the scope of such arrangement. The Company has recognized its proportionate share of assets, liabilities, revenues and expenses in respect of such arrangements. These have been incorporated in the consolidated financial statements under the appropriate classifications.
Asset Retirement Obligations
Our asset retirement obligations (“AROs”) consist primarily of estimated future costs associated with the plugging, dismantling, removal, site reclamation and similar activities of natural gas properties in accordance with the requirements of respective EPs and with applicable local, state and federal laws. The discounted fair value of an ARO liability is required to be recognized in the period in which it is incurred, with the associated asset retirement cost capitalized as part of the carrying cost of the related long-lived asset. The recognition of an ARO requires numerous assumptions to be made by management regarding such factors as the estimated probabilities, amounts and timing of settlements; the credit-adjusted risk-free rate to be used; inflation rates; and future advances in technology. In periods subsequent to the initial measurement of the ARO, we recognize period-to-period changes in the liability resulting from the passage of time and revisions to either the timing or the amount of the original estimate of undiscounted cash flows. Increases in the ARO liability due to passage of time impact net income as accretion expense. The related capitalized cost, including revisions thereto, is charged to expense through depreciation and amortization over the life of the related asset.
Litigation and Environmental Contingencies
In the ordinary course of business, we may at times be subject to claims and legal actions. Management does not believe the impact of such matters will have a material adverse effect on our financial position or results of operations. We are subject to extensive federal, state, and local environmental laws and regulations, which may materially affect our operations. These laws, which are constantly changing, regulate the discharge of materials into the environment and may require us to remediate, remove or mitigate the environmental effects of the disposal or release of petroleum or chemical substances at various sites.
In our acquisition of existing assets, we may not be aware of what environmental safeguards were taken during the time such assets were operated or the environmental liabilities associated with such assets.
We maintain comprehensive insurance coverage that we believe is adequate to mitigate the risk of any adverse financial effects associated with these risks. However, should it be determined that a liability exists with respect to any environmental cleanup, remediation, or restoration, the liability to cure such a violation could still fall upon us. No claim has been made, nor are we aware of any liability which we may have, as it relates to any material environmental cleanup, remediation, restoration, or the material violation of any rules or regulations relating thereto.
Environmental expenditures are expensed or capitalized depending on their future economic benefit. Those related to an existing condition caused by past operations and that have no future economic benefits are expensed as incurred. Liabilities for expenditures of a noncapital nature are recorded when environmental assessment and/or remediation is probable, and the cost can be reasonably estimated.
Income Taxes
Income taxes are accounted for under the asset-and-liability method. Deferred tax assets and liabilities occur when differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards exist and are recognized for future tax consequences. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences and carryforwards are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Current income tax recognized in the profit or loss is the tax payable or receivable on taxable income calculated using applicable income tax rates enacted as at reporting date. Current tax liabilities or assets are measured at the amounts expected to be paid or recovered from the relevant tax authority.
In assessing the probability that a deferred tax asset will be realized management considers whether it is more likely than not that all or some portion of the deferred tax assets will not be realized. We provide valuation allowances against deferred tax assets that are not considered more likely than not to be realized. The valuation of the deferred tax asset is
dependent on, among other things, our ability to generate a sufficient level of future taxable income, in estimating future taxable income, we consider both positive and negative evidence in our assessment. If our estimate of future taxable income or tax strategies changes at any time in the future, we would record an adjustment to our valuation allowance. Recording such an adjustment could have a material effect on our financial condition or results of operations.
Deferred income tax relating to timing difference and unused tax losses are only recognized to the extent that it is probable that future tax profit will be available against which the benefits of the deferred tax asset can be utilized.
Stock-Based Compensation
We measure and recognize compensation expense related to our share-based compensation based on the estimated fair value of the awards. The fair value of the award is measured at the grant date and is recognized as an expense over the course of the award’s vesting period. The fair value of the stock options granted is estimated using either the Black-Scholes (for awards that vest based on service conditions) or the Monte-Carlo option-pricing model (for awards that vest based on market conditions). Each of these models include the share price at grant date, exercise price, the term of the right, expected price volatility of the underlying share, the expected dividend yield and the risk-free interest rate for the term of the right. The Monte Carlo model also incorporates a probability-based value impact of the market condition.
Recent Accounting Pronouncements
See “Note 2-Summary of Significant Accounting Policies” to our consolidated financial statements included elsewhere in this report for more information about recent accounting pronouncements, the timing of their adoption, and our assessment, to the extent we have made one, of their potential impact on our financial condition and our results of operations.

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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not required.

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements and supplementary information specified by this Item 8 are presented in Part IV, Item 15 “Exhibits and Financial Statement Schedules.”

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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.

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ITEM 9A. CONTROLS AND PROCEDURES
ITEM 9A. CONTROLS AND PROCEDURES
Inherent Limitations on Effectiveness of Controls
A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. Because of its inherent limitations, internal control over financial reporting may not prevent or detect all control issues or misstatements. Accordingly, our controls and procedures are designed to provide reasonable, not absolute, assurance that the objectives of our control system are met. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become adequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Evaluation of Disclosure Controls and Procedures
During the fiscal period covered by this report, our management, with the participation of the interim Chief Executive Officer and Chief Financial Officer, carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) as of June 30, 2025. Based on such evaluation, our interim Chief Executive Officer and Chief Financial Officer have concluded that, as a result of the material weakness in internal control over financial reporting described below, our disclosure controls and procedures were not effective as of June 30, 2025. In light of the material weakness in the Company’s internal control over financial reporting described below, we performed additional analysis and other procedures to ensure that our consolidated financial statements were prepared in accordance with GAAP. Accordingly, our management, including the interim Chief Executive Officer and Chief Financial Officer, has concluded that the consolidated financial statements included in this
Annual Report on Form 10-K fairly present, in all material respects, our financial position, results of operations, and cash flows as of and for the periods presented, in accordance with GAAP.
In connection with the audit of our financial statements for the fiscal years 2024 and 2025, we identified deficiencies in our internal control over financial reporting, which in the aggregate, constituted a material weakness. We determined that in both fiscal years, we had deficiencies relating to insufficiently designed and operating internal control over financial reporting, including:
i) lack of sufficient evidence retained of the performance of internal controls,
ii) insufficient resources in key accounting and finance roles leading to inadequate segregation of duties,
iii) lack of manage access and manage change IT general controls over the cloud-based enterprise resource planning system, and
iv) accounting for complex transactions in accordance with GAAP, which in the aggregate constitute a material weakness.
Management’s Annual Report on Internal Control over Financial Reporting
Management is responsible for establishing and maintaining adequate internal controls over our financial reporting, as defined in Rule 13a-15(f) under the Exchange Act. Tamboran’s internal controls over financial reporting are processes designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. Due to their inherent limitations, internal controls over financial reporting may not be effective in preventing or detecting misstatements. Additionally, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate due to changes in conditions or that the degree of compliance with policies or procedures may deteriorate.
Management evaluated the effectiveness of Tamboran’s internal controls over financial reporting as of June 30, 2025, based upon the Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO - 2013”). Based on the assessment using these criteria, Management concluded that, as of June 30, 2025, our internal controls over financial reporting were ineffective to detect the inappropriate application of U.S. GAAP rules due to deficiencies that existed in the design or operation of our internal controls over financial reporting that are considered to be a material weakness as described herein above. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis.
Notwithstanding the existence of this material weakness in our internal controls over financial reporting, Management believes that Tamboran’s consolidated financial statements fairly present in all material respects the Company’s financial condition, results of operations, and cash flows for the periods presented. We continue to evaluate the effectiveness of internal controls and procedures on an on-going basis.
As Tamboran continues to be an emerging growth company, this report does not include an attestation report from our independent registered public accounting firm regarding internal controls over financial reporting.
Remediation Plan for the Material Weakness
In response to the material weakness identified and described above, our management, with the oversight of the Audit & Risk Management Committee of our board of directors, will continue to dedicate significant efforts and resources to further improve our control environment and to take steps to remediate this material weakness. The remediation plan was initiated in fiscal year 2026 during which we implemented a new enterprise resource planning system to better support our financial reporting and internal control framework. We have engaged an internal audit firm to assist with the documentation of our processes and internal controls and we will also provide training to control owners, supported by external consultants, as appropriate, in support of an effective internal control framework, including how to sufficiently document and evidence the operation of internal controls. We have also hired a Vice President of Information Technology and a Financial Reporting Manager with extensive knowledge in their respective fields to assist in the remediation of the above control deficiencies. We will continue to hire accounting and finance personnel, or engage technical specialists, who possess the required technical knowledge to ensure reporting requirements are met and segregation of duties are
maintained. The material weakness cannot be considered remediated until the newly designed control activity operates for a sufficient period of time and management has concluded, through testing, that the control is operating effectively.
Changes in Internal Control Over Financial Reporting
Other than described above, there were no changes in the Company’s internal control over financial reporting (as defined in Rule 13a-15(f) and Rule 15d-15(f) under the Exchange Act) during the quarter ended June 30, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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ITEM 9B. OTHER INFORMATION
ITEM 9B. OTHER INFORMATION
During the three months ended June 30, 2025, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408 of Regulation S-K.

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ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
The information required by Item 10 is incorporated herein by reference from our definitive proxy statement, which will be filed no later than 120 days after June 30, 2025.
Code of Business Conduct and Ethics
The Company’s Code of Business Conduct and Ethics (the “Code of Conduct”), which is applicable to all directors, officers and employees of the Company, including the principal executive officer, the principal financial officer and the principal accounting officer, is available on the Investor Relations section of the Company’s website (www.tamboran.com). A copy of the Code of Conduct is also available in print to share owners upon request, addressed to the Corporate Secretary at Tamboran Resources Corporation, Suite 01, Level 39, Tower One, International Towers Sydney, 100 Barangaroo Avenue, Barangaroo NSW 2000. The Company intends to post amendments to or waivers of (to the extent applicable to the Company’s directors, executive officers or principal financial officers) the Code of Conduct on its website.
Insider Trading Policy
We have adopted an Insider Trading Policy that governs the purchase, sale, and/or other dispositions of our securities by directors, officers and employees that is reasonably designed to promote compliance with insider trading laws, rules and regulations and NYSE listing standards. A copy of our Insider Trading Policy is filed as Exhibit 19.1 to this report.

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ITEM 11. EXECUTIVE COMPENSATION
ITEM 11. EXECUTIVE COMPENSATION
The information required by Item 11 is incorporated herein by reference from our definitive proxy statement, which will be filed no later than 120 days after June 30, 2025.

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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The following table summarizes securities authorized for issuance under equity compensation plans as of June 30, 2025.
Equity Compensation Plan Information
(a) (b) (c)
Plan Category Number of securities to be issued upon exercise of outstanding options, warrants and rights(2)
Weighted-average exercise price of outstanding options, warrants and rights(3)
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))(4)
Equity compensation plans approved by security holders(1)
1,159,722 $ 47.02 705,282
Equity compensation plans not approved by security holders
- - -
Total
1,159,722 $ 47.02 705,282
(1) Consists of the 2021 Equity Incentive Plan (“2021 EIP”) and the 2024 Equity Award Plan (the “2024 Plan”).
(2) Consists of (a) options covering a total of 54,001,222 CDIs (representing 270,006 shares of our common stock) issued under the 2021 EIP, (b) 494,716 restricted stock units issued under the 2024 Plan and (c) 395,000 performance stock units, calculated at target performance level, issued under the 2024 Plan. Does not include 5,002 shares of unvested restricted stock issued under the 2024 Plan.
(3) Consists of options outstanding under the 2021 EIP, covering a total of 54,001,222 CDIs (representing 270,006 shares of our common stock) at a weighted-average exercise price of A$0.3617. Converted to U.S. Dollars at an exchange rate of 0.65. Holders of CDIs under the 2021 Plan are the beneficial owner of one share of Common Stock for every 200 CDIs held. The weighted-average exercise price excludes any outstanding restricted stock units and performance stock units, which have no exercise price.
(4) Following the IPO, no further grants have been or will be made under the 2021 EIP. This column reflects the total number of shares of common stock remaining available for issuance under the 2024 Plan as of June 30, 2025.
The additional information required by this Item 12, as well as the names of all persons (of which the Company is aware) who are substantial holders in the Company within the meaning of section 671B of the Corporations Act, will be incorporated herein by reference from our definitive proxy statement, which will be filed no later than 120 days after June 30, 2025.
Australian Disclosure Requirements
In addition to the Company’s primary NYSE listing, Common Stock are also quoted in the form of CDIs on the ASX and trade under the code “TBN”. As part of our ASX listing, we are required to comply with certain of the disclosure and other obligations set out in the ASX Listing Rules. The following information is provided in accordance with the requirements of the ASX and the ASX Listing Rules (where that information has not been provided elsewhere in this report).
Place of Incorporation and Restrictions on the Acquisition of Securities
The Company is incorporated in the State of Delaware and is registered as a foreign company in Australia under the Corporations Act (ARBN 672 879 024). As a foreign company, the Company is not subject to Chapters 6, 6A, 6B or 6C of the Corporations Act (dealing with the acquisition of its shares, including substantial holdings and takeovers).
Under the Delaware General Corporation Law, shares in the Company are generally freely transferable. Transfers may, however, be subject to restrictions imposed by United States federal or state securities laws, by the Company’s Certificate of Incorporation or Bylaws, or by an agreement signed with the holders of shares on issue.
The Company’s Certificate of Incorporation and Bylaws do not impose any specific restrictions on the transfer of the Company’s shares. Transfers of the Company’s shares will be made only on the transfer books of the Company or by a transfer agent designated to transfer the Company’s shares.
Repurchases of the Company’s securities are governed by the safe harbor provisions set forth in Rule 10B-18 of the Securities Exchange Act of 1934. However, provisions of the Delaware General Corporation Law, the Company’s Certificate of Incorporation and Bylaws could make it more difficult to acquire the Company by means of a tender offer (takeover), a proxy contest or otherwise, or to remove incumbent officers and directors of the Company. These provisions could discourage certain types of coercive takeover practices and takeover bids that the Company’s board of directors may consider inadequate and encourage persons seeking to acquire control of the Company to first negotiate with the board of directors.
Australian Corporate Governance Statement
The board of directors and employees of the Company are committed to developing, promoting and maintaining a strong culture of good corporate governance and ethical conduct. The board of directors confirm that the Company’s corporate governance framework is generally consistent with the ASX’s Corporate Governance Council’s “Corporate Governance Principles and Recommendations” (4th Edition) (“ASX Governance Recommendations”). The Company’s Corporate Governance Statement is available for viewing at https://www.tamboran.com/corporate-governance-statements/. The Corporate Governance Statement sets out the ASX Governance Recommendations and the Company’s response as to how and whether it follows those recommendations. The Company’s most recent Corporate Governance Statement, dated September 25, 2025, and approved by the board of directors remains accurate as of the date of this Annual Report on Form 10-K.
Issued Capital
As of September 24, 2025, the Company had 17,820,758 shares of Common Stock on issue, of which:
•10,336,865 shares of Common Stock were held by 43 stockholders, and quoted on NYSE. (Note: The actual number of stockholders is greater than this number and includes holders who are beneficial owners, but whose shares are held in street name by brokers and other nominees. The number of active holders of record also do not include holders whose shares may be held in trust by other entities); and
•7,483,893 shares of Common Stock were held by CHESS Depositary Nominees Pty Ltd (as Depositary Nominee) on behalf of 3,687 CDI holders, representing 1,496,778,600 CDIs quoted on ASX.
In addition, as of September 24, 2025, the Company had the following unquoted securities on issue:
•7,416,667 unquoted options, A$0.2367 and expiring 26 May 2026, held by 3 option holders which entitle the holder (upon vesting) to be issued CDIs;
•10,734,555 unquoted options, A$0.32 and expiring 26 May 2026, held by 13 option holders which entitle the holder (upon vesting) to be issued CDIs;
•35,850,000 unquoted options expiring various dates ex various prices, held by 13 option holders which entitle the holder (upon vesting) to be issued CDIs; and
•719,718 Units, held by 51 employees and directors of the Company pursuant to the Company’s 2024 Plan which entitle the holder (upon vesting) to be issued Common Stock.
Voting Rights
Each holder of Common Stock is entitled to one vote per Common Stock held. Holders of CDIs are entitled to receive notice of, and to attend as guests (but not vote at) meetings of stockholders. Holders of CDIs are the beneficial owner of one share of Common Stock for every 200 CDIs held. The Depositary Nominee (or its custodian) is the legal holder of the Common Stock underlying the CDIs.
As the beneficial owners, holders of CDIs may:
•direct the Depositary Nominee (or its custodian) how to vote the Common Stock represented by their CDIs by completing the CDI Voting Instruction Form that accompanies the relevant notice of meeting or proxy statement; or
•appoint themselves (or another person) to be the Depositary Nominee’s proxy with respect to the Common Stock represented by their CDIs for the purposes of attending and voting at the meeting by completing the CDI Voting Instruction Form that accompanies the relevant notice of meeting or proxy statement.
Alternatively, holders of CDIs can elect to convert their CDIs into Common Stock and vote those Common Stock at the meeting. Such conversion must be completed prior to the record date fixed by the Company for determining the entitlement of stockholders to attend and vote at the meeting.
Options and Units do not carry voting rights.
Substantial Stockholders
The information required in relation to the names of all persons (of which the Company is aware) who are substantial holders in the Company within the meaning of section 671B of the Corporations Act, will be incorporated herein by reference from our definitive proxy statement, which will be filed no later than 120 days after June 30, 2025.
Distribution of CDI Holders
Below is a distribution schedule of the number of holders of CDI’s, at September 24, 2025, and assuming all shares of Common Stock are held as CDIs.
Number of Holders Number of
CDIs %
1-1,000 62 7,004 - %
1,001-5,000 625 2,197,613 0.15 %
5,001-10,000 602 4,605,473 0.31 %
10,001-100,000 1,632 64,966,294 4.34 %
100,001 and over 766 1,425,002,216 95.20 %
3,687 1,496,778,600 100.00 %
Unmarketable Parcels
The number of stockholders and/or CDI holders who hold less than a marketable parcel of securities (where a “marketable parcel” is a parcel of securities worth at least A$500, pursuant to the ASX Operating Rules) was 238, based on the closing price of the Company’s common stock and CDIs as of September 23, 2025.
Twenty Largest CDI Holders
Below are details of the 20 largest holders of CDIs, and the number and percentage of issued CDIs held by those holders, as of September 24, 2025, and assuming all shares of Common Stock are held as CDIs.
Name Number of CDIs Held(1)
Percentage
of CDIs
1 Sheffield Holdings LP 270,509,154 18.073 %
2 Helmerich & Payne International Holdings LLC 105,952,380 7.079 %
3 Morgan Stanley Australia Securities (Nominee) Pty Limited <No 1 Account> 93,506,641 6.247 %
4 Citicorp Nominees Pty Limited 79,872,716 5.336 %
5 HSBC Custody Nominees (Australia) Limited 74,261,075 4.961 %
6 Washington H Soul Pattinson And Company Limited 71,088,742 4.749 %
7 BNP Paribas Noms Pty Ltd 58,423,115 3.903 %
8 HSBC Custody Nominees (Australia) Limited 50,661,144 3.385 %
9 HSBC Custody Nominees (Australia) Limited - A/C 2 24,571,131 1.642 %
10 Venture Holdings Sarl SPF 24,167,920 1.615 %
11 Pat Elliott (Tamboran) Limited 23,546,044 1.573 %
12 BNP Paribas Nominees Pty Ltd <IB AU NOMS Retail client> 19,647,636 1.313 %
13 Phillip Hollick Pty Ltd <Philly S/F A/C> 14,208,582 0.949 %
14 Richgard No 40 Pty Ltd 14,000,000 0.935 %
15 Jufran Carbon Pty Limited 13,842,461 0.925 %
16 Robmar Investments Pty Limited 13,497,903 0.902 %
17 BNP Paribas Nominees Pty Ltd <Hub24 Custodial Serv Ltd> 11,007,538 0.735 %
18 John R Hislop 10,622,806 0.710 %
19 Mr Archibald Geoffrey Loudon 10,054,187 0.672 %
20 Bell Potter Nominees Ltd <BB Nominees A/C> 10,000,000 0.668 %
20 Hendo Family Superannuation Pty Ltd <Henderson Superfund A/C> 10,000,000 0.668 %
______________________
(1)Including shares of Common Stock represented as though they were held as CDIs (with 200 CDIs representing a beneficial ownership interest in 1 share of Common Stock).
Additional Information
Rohan Vardaro is the Company’s corporate secretary.
Our principal executive office in Australia is Suite 01, Level 39, Tower One, International Towers Sydney 100 Barangaroo Avenue, Barangaroo NSW 2000 (telephone: +61 2 8330 6626). Our registered office in the United States is 1209 Orange Street, Wilmington, County of New Castle, Delaware 19801.
Registers of our securities are held as follows:
•For CDIs in Australia: Boardroom Pty Limited, Level 8, 210 George Street Sydney NSW 2000. Investor Enquiries: 1300 737 760 (within Australia) or +61 2 9290 9600 (outside Australia) between 8.30am and 5.30pm (Australian Eastern Standard time) Monday to Friday.
•For Common Stock in the United States: Computershare Trust Company, N.A., 250 Royall Street, Canton, MA 02021. Telephone: +1 781 575 3100.
There is no current on-market buy-back of the Company’s securities.
The Company does not have any restricted securities on issue, or securities subject to voluntary escrow.
No securities have been purchased on-market during the reporting period under or for the purposes of the Company’s 2024 Plan or to satisfy the entitlements of the holders of options or other rights to acquire securities granted under the 2024 Plan.

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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
The information required by Item 13 is incorporated herein by reference from our definitive proxy statement, which will be filed no later than 120 days after June 30, 2025.

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ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Our independent registered public accounting firm is Ernst & Young (PCAOB ID No. 1435).
The information required by Item 14 is incorporated herein by reference from our definitive proxy statement, which will be filed no later than 120 days after June 30, 2025.
PART IV

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ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a)Documents filed as a part of this report.
(1)Financial Statements
See “Index to Consolidated Financial Statements” set forth on Page.
(2)Financial Statement Schedules
Financial statement schedules listed under SEC rules but not included in this report are omitted because they are not applicable or the required information is provided in the notes to our consolidated financial statements.
EXHIBITS
(3)Exhibits
The following documents are filed as exhibits hereto:
Exhibit
number Description
3.1 Certificate of Incorporation of Tamboran Resources Corporation (filed as Exhibit 3.1 to the Company’s Registration Statement on Form S-1 dated May 3, 2024, File No. 333-279119, and incorporated herein by reference).
3.2 Amended and Restated Bylaws of Tamboran Resources Corporation (filed as Exhibit 3.2 to the Company’s Registration Statement on Form S-1 dated June 17, 2024, File No. 333-279119, and incorporated herein by reference).
4.1 Form of Common Stock Certificate (filed as Exhibit 4.1 to the Company’s Registration Statement on Form S-1 dated June 17, 2024, File No. 333-279119, and incorporated herein by reference).
4.2 Scheme Booklet, dated as of October 27, 2023 (filed as Exhibit 4.2 to the Company’s Registration Statement on Form S-1 dated May 3, 2024, File No. 333-279119, and incorporated herein by reference).
4.3 Registration Rights Agreement, dated June 28, 2024, between Tamboran Resources Corporation, Sheffield Holdings, LP, and each of the other signatories from time to time party thereto (filed as Exhibit 10.1 to the Company’s dated June 28, 2024, File No. 001-42149, and incorporated herein by reference).
4.4 Description of the Registrant’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934 (filed as Exhibit 4.4 to the Company’s Annual Report on Form 10-K for the year ended June 30, 2024, File No. 001-42149, and incorporated herein by reference).
10.1 Form of Indemnification Agreement between the Company and each of the directors and officers thereof (filed as Exhibit 10.1 to the Company’s Registration Statement on Form S-1 dated May 3, 2024, File No. 333-279119, and incorporated herein by reference).
10.2† Tamboran Resources Limited 2021 Equity Incentive Plan (filed as Exhibit 10.2 to the Company’s Registration Statement on Form S-1 dated May 3, 2024, File No. 333-279119, and incorporated herein by reference).
10.3† Form of Tamboran Resources Limited 2021 Equity Incentive Plan Invitation Letter (filed as Exhibit 10.3 to the Company’s Registration Statement on Form S-1 dated May 3, 2024, File No. 333-279119, and incorporated herein by reference).
10.4† Tamboran Resources Corporation 2024 Equity Award Plan (filed as Exhibit 10.15 to the Company’s Registration Statement on Form S-1 dated June 5, 2024, File No. 333-279119, and incorporated herein by reference).
10.5† Form of Stock Option Agreement under the 2024 Equity Award Plan (filed as Exhibit 10.16 to the Company’s Registration Statement on Form S-1 dated June 5, 2024, File No. 333-279119, and incorporated herein by reference).
10.6† Form of Restricted Stock Unit Grant Agreement under the 2024 Equity Award Plan (filed as Exhibit 10.17 to the Company’s Registration Statement on Form S-1 dated June 5, 2024, File No. 333-279119, and incorporated herein by reference).
10.7#+ Joint Operating Agreement (Beetaloo Joint Venture) between Falcon Oil & Gas Australia Limited and Tamboran B2 Pty Ltd, dated July 28, 2023 (filed as Exhibit 10.5 to the Company’s Registration Statement on Form S-1 dated May 3, 2024, File No. 333-279119, and incorporated herein by reference).
10.8 Royalty Deed (EP 76, EP 98, EP 117) - Daly Waters between Tamboran Resources Limited and Daly Waters Royalty, LP, dated September 18, 2022 (filed as Exhibit 10.6 to the Company’s Registration Statement on Form S-1 dated May 3, 2024, File No. 333-279119, and incorporated herein by reference).
10.9 Royalty Deed (EP 161) - Daly Waters between Tamboran Resources Limited and Daly Waters Royalty, LP, dated September 18, 2022 (filed as Exhibit 10.7 to the Company’s Registration Statement on Form S-1 dated May 3, 2024, File No. 333-279119, and incorporated herein by reference).
10.10 Royalty Deed (EP 136, EP 143 & EP 197) - Daly Waters between Sweetpea Petroleum Pty Ltd and Daly Waters LP, dated September 18, 2022 (filed as Exhibit 10.8 to the Company’s Registration Statement on Form S-1 dated May 3, 2024, File No. 333-279119, and incorporated herein by reference).
10.11#+ Onshore Drilling Contract between Sweetpea Petroleum Pty Ltd and Helmerich & Payne International Holdings, LLC dated September 9, 2022, as amended on June 7, 2023 (filed as Exhibit 10.9 to the Company’s Registration Statement on Form S-1 dated May 3, 2024, File No. 333-279119, and incorporated herein by reference).
10.12 Letter Agreement between Helmerich & Payne International Holdings, LLC and Tamboran Resources Limited, dated September 9, 2022 (filed as Exhibit 10.10 to the Company’s Registration Statement on Form S-1 dated May 3, 2024, File No. 333-279119, and incorporated herein by reference).
10.13† Executive Employment Contract between Tamboran Resources Limited and Eric Dyer, dated May 5, 2021 (filed as Exhibit 10.11 to the Company’s Registration Statement on Form S-1 dated May 3, 2024, File No. 333-279119, and incorporated herein by reference).
Exhibit
number Description
10.14† Executive Employment Contract between Tamboran Resources Limited and Joel Riddle, dated April 25, 2021 (filed as Exhibit 10.12 to the Company’s Registration Statement on Form S-1 dated May 3, 2024, File No. 333-279119, and incorporated herein by reference).
10.15† Employment Agreement between Tamboran Resources USA, LLC and Faron Thibodeaux, dated August 1, 2021 (filed as Exhibit 10.13 to the Company’s Registration Statement on Form S-1 dated May 3, 2024, File No. 333-279119, and incorporated herein by reference).
10.16† Transfer of Employment with Tamboran Resources Limited and Offer of Employment by Tamboran Services Pty Ltd between Tamboran Resources Limited and Eric Dyer, dated February 13, 2023 (filed as Exhibit 10.14 to the Company’s Registration Statement on Form S-1 dated May 3, 2024, File No. 333-279119, and incorporated herein by reference).
10.17† Transfer of Employment with Tamboran Resources Limited and Offer of Employment by Tamboran Services Pty Ltd between Tamboran Resources Limited and Joel Riddle, dated February 13, 2023 (filed as Exhibit 10.15 to the Company’s Registration Statement on Form S-1 dated May 3, 2024, File No. 333-279119, and incorporated herein by reference).
10.18 Amended and Restated Joint Venture and Shareholders Agreement between Tamboran (West) Pty Limited, Tamboran Resources Limited, Daly Waters Energy, LP, Sheffield Holdings, LP and Tamboran (B1) Pty Ltd dated June 3, 2024 (filed as Exhibit 10.29 to the Company’s Registration Statement on Form S-1 dated June 5, 2024, File No. 333-279119, and incorporated herein by reference).
10.19** Director Nominating Agreement, dated June 28, 2024, between Tamboran Resources Corporation and Sheffield Holdings, LP (filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K dated June 28, 2024, File No. 001-42149, and incorporated herein by reference).
10.20† Restricted Stock Award Notice and Agreement for Fredrick Barrett pursuant to Tamboran Resources Corporation 2024 Equity Award Plan dated January 22, 2025 (filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2025, File No. 001-42149, and incorporated herein by reference).
10.21 Performance Bond Facility Agreement, dated December 19, 2024, by and among Tamboran (West) Pty Limited, as borrower, Tamboran Resources Pty Ltd, as guarantor, and Macquarie Bank Limited, as lender (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K dated December 31, 2024, File No. 001-42149, and incorporated herein by reference).
10.22 Deed of Guarantee and Indemnity, dated December 19, 2024, between Tamboran Resources Corporation, as guarantor, and Macquarie Bank Limited, as lender (filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K dated December 31, 2024, File No. 001-42149, and incorporated herein by reference).
10.23 Form of Subscription Agreement (Non-Affiliate), between Tamboran Resources Corporation and the Subscribers thereto (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K dated May 12, 2025, File No. 001-42149, and incorporated herein by reference).
10.24 Form of Subscription Agreement (Affiliate), between Tamboran Resources Corporation and the Subscribers thereto (filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K dated May 12, 2025, File No. 001-42149, and incorporated herein by reference).
10.25 Subscription Agreement, dated May 12, 2025, between Tamboran Resources Corporation and Daly Waters Energy, LP (filed as Exhibit 10.3 to the Company’s Current Report on Form 8-K dated May 12, 2025, File No. 001-42149, and incorporated herein by reference).
10.26 Asset Sale Agreement - Beetaloo Acreage Acquisition, dated May 12, 2025, between Tamboran (West) Pty Limited, Tamboran Resources Corporation, and Daly Waters Energy, LP (filed as Exhibit 10.4 to the Company’s Current Report on Form 8-K dated May 12, 2025, File No. 001-42149, and incorporated herein by reference).
10.27 Second Amended and Restated Joint Venture and Shareholders Agreement, dated May 12, 2025, between Tamboran (West) Pty Limited, Tamboran Resources Pty Ltd, Daly Waters Energy, LP, and Tamboran (B1) Pty Ltd. (filed as Exhibit 10.5 to the Company’s Current Report on Form 8-K dated May 12, 2025, File No. 001-42149, and incorporated herein by reference).
10.28 Origin Fourth Amended and Restated Royalty Deed, between Origin Energy B2 Pty Ltd, Falcon Oil & Gas Australia Limited, Tom Duggan Family Limited Partnership LLP, Territory Oil & Gas LLC, and Malcolm, John Gerrard, dated September 23, 2022 (filed herewith).
19.1 Insider Trading Compliance Policy (filed herewith).
21 Subsidiaries of the Company (filed herewith).
23 Consent of Independent Registered Public Accounting Firm (filed herewith).
24 The Company’s Power of Attorney (filed herewith).
Exhibit
number Description
31.1 Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
31.2 Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
32.1** Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350 (furnished herewith).
32.2** Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350 (furnished herewith).
97.1 The Company’s Policy for Recovery of Erroneously Awarded Compensation (filed as Exhibit 97.1 to the Company’s Annual Report on Form 10-K for the year ended June 30, 2024, File No. 001-42149, and incorporated herein by reference).
101 Interactive data files (formatted as Inline XBRL).
104 Cover Page Interactive Data File (formatted as iXBRL and contained in Exhibit 101).
______________________
** This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.
† Indicates a management contract or compensatory plan or arrangement required to be filed as an exhibit to this report.
# Portions of this exhibit (indicated by asterisks) have been omitted because the registrant has determined they are not material and would likely cause competitive harm to the registrant if publicly disclosed.
+ Certain schedules (or similar attachments) of this exhibit were omitted pursuant to Item 601(a)(5) of Regulation S-K.