Tamboran Resources Corporation

Hello, and welcome to the Tamborin Resources fourth quarter fiscal year 2024, full year 2024 earnings release. At this time, all participants are in listen-only mode. If anyone should require operator assistance, please press star zero on your telephone keypad. There'll be a question and answer session following the formal presentation. You may be placed into question queue at any time by pressing star one on your telephone keypad. As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Managing Director and CEO, Joel Riddle. Please go ahead, sir.

Thanks and welcome to Tamborin Resources' full year 2024 earnings call. My name is Joel Riddle. I am the Managing Director and Chief Executive Officer for Tamborin Resources. And joining with me today is Eric Dyer, our Chief Financial Officer. Before we get into the material, I'd like to refer everyone to slide two. and associated disclosure statements associated with four looking statements. Starting with slide three, this has been a very exciting 12 months for Tamborim Resources. We've achieved six major milestones, including delivering the largest normalized flow rate from any well that has been drilled in the basin to date with the results of our Shenandoah South one well. Two, we secured $82 million to progress our 2024 drilling program. This was part of a successful IPO that the company completed in late June as part of our new New York Stock Exchange listing. Three, we entered into a strategic agreement with Liberty Energy. This will bring a modern frack fleet from the US into Australia this year, and we'll be using that frack fleet for the six pilot wells that we have just started drilling. Four, we signed a 15 and a half year binding gas sales agreement with the Northern Territory Government. This will underpin our Shenandoah South pilot project and look to deliver initial cashflow and production as early as first quarter of 2026. Five, we signed LOIs with six of the largest East Coast gas retailers. And that will underpin our phase two of our development plan. And six, finally, we signed two MOUs with BP and Shell for 2.2 million tons of LNG for 20 years each. That will be tied to Tamborin's operated NTLNG project. In addition, we have a recently awarded pre-feed studies to Bechtel Corporation. And again, this will be part of our progress that we will be making in the next 12 months on our NTLNG project, and that's what we call phase three. Before getting into the company update on slide four, I'd like to provide an update on the current East Coast gas market dynamics in Australia. The Australian Competition and Customer Commission, otherwise known as the ACCC, who is undertaking tri-annual studies on the East Coast gas market, has recently provided an update in June of this year. The key outcomes from this study have highlighted three themes. One is the shortfall that hasn't been anticipated for a number of years is now projected to occur a full year earlier than the previous forecast. Two, gas prices agreed under contract in 2024 were approximately $8.50 per MMBTQ. This is almost three times the price of Henry Hub during the same time period from 2024 to date. And three, the anticipated shortfall on the East Coast is anticipated to grow to one BCF a day by 2030. and expanding to 1.5 BCF a day by 2035. This market provides the appropriate market signal to stimulate a very large new development out of the Betelgeuse that we would look to deliver a minimum of 1 BCF a day as early as 2028 into this market. And we believe this provides a very constructive macro backdrop to accelerate this phase two of our development plan. Moving to slide five, this is our company strategy, which will focus on delivering two BCF a day by 2030. That will involve three main phases. The first phase is delivery of 40 million cubic feet a day by pilot development project. And we'll target having that $40 million a day delivered to the local NT gas market as early as first quarter of 2026. Off the foundation of our pilot project, we will develop this one BCF a day and target the domestic market on the east coast of Australia as delivery as early as 2028. And once we have a well-supplied Northern Territory gas market and a well-supplied domestic market on the east coast, we will progress our LNG strategy where we'll focus on delivering a minimum of one BCF a day to NTLNG by 2030. In phase four and beyond, we would envision additional trains being built at NTLNG and supplied with additional gas supply from our development area in the Betelute Basin. Moving to slide six, one of the key elements of delivering this strategy is importing U.S. technology that has been developed as part of the Shell revolution in the next last 15 years. That's what led us to partner with H&P about 24 months ago. We agreed with H&P to bring in up to their five modern Flex3 rigs into the Beetaloo Basin from the U.S. The first rig arrived about 12 months ago. And that rig is currently on location and drilling the first series of wells on our pilot development. Last year, we also partnered with Liberty Energy to bring in modern frac equipment. That frac equipment has currently arrived in the Port of Darwin, and we will be mobilizing that fleet down to site. And that's the frac fleet that we'll be using for the upcoming two wells this year. In addition, we've also partnered with the largest pipeline company in Australia, APA, and we're actively working with APA on development of a new pipeline from the Beetaloo into the East Coast market where we'll target initial first gas as early as 2028. And finally, we recently awarded Bechtel as our pre-feed partner. And we are actively, over the next 12 months, we'll be progressing pre-feed with Bechtel to support the initial designs of our NT LNG project. Turning to slide seven, the other key element to executing our 2BCF strategy is the high-quality, world-class resource that is in the deepest sections of the Beetaloo Basin. This world-class resource was identified from a well that we drilled last year called Shenandoah South 1H. You can see the log in the middle of the page of slide 7, where we logged 480 feet of high-quality shell that you can see from the spider on the right, spider diagram on the right. In comparison to the Marcellus shell, the rock properties that we've seen in the deepest sections of the Beteloo are not only thick, but they're very high quality. Reservoir properties and also the gas in place versus the Marcellus shale properties are roughly 40% greater here in the Shenandoah South area. In addition, there's a million acres that we feel have been significantly de-risked by this well and we believe provides a significant runway for our two BCF a day development plan. Moving to slide eight, a little bit more detail around the activities that we have kicked off in our Shenandoah South pilot project area. If I refer everyone to the map in the middle of the page, you can see Shenandoah South 1 that was drilled last year is in this small black stick. And directly north three miles from that well location, we've constructed a new six-well pad. where we have kicked off the drilling of the initial two wells this year, Shenandoah South 2 and Shenandoah South 3. Those will both be designed with 10,000 foot horizontal lateral links and we will be pumping 60 stages in each of the 10,000 foot horizontal wells. Following the drilling of Shenandoah South 2 and Shenandoah South 3, we will look to take the learnings from each of these two wells and deploy those learnings in four follow-up wells that we will look to drill in 2025, where we will look to take all six wells and commission a facility and hook that facility up to the local Amadeus gas pipeline and produce initial volumes of up to 40 million cubic feet a day by early 2026. Again, this project is underpinned by a 15 and a half year gas sales agreement that we have signed with the Northern Territory Government and provides a significant de-risking for our delivery of this initial phase of our development plan. Turning to slide nine, you can see by the picture on the right the activities that are ongoing on this roughly 20 acre site. You can see the well pad where we're going to be drilling six of our pilot wells in addition to our man camp and our Stewart Plateau compression facility that will be positioned on the northwest corner of our pad. Again, we will be targeting IP30 flow rates from each of these two wells as early as first quarter of 2025. And so we're extremely excited about the opportunity to deliver the first 10,000-foot horizontal wells in the Beetaloo Basin and pumping up to 120 stages in each of these two wells. This represents the largest single campaign in the Beetaloo Basin to date. Moving to slide 10, again, the Liberty frac spread arrived in the Port of Darwin about 30 days ago. and we are actively mobilizing this new frac spread down to site as we speak. We should have this frac spread on site by late October in anticipating pumping our first frac around November 1st. This equipment also included 400 sandboxes that are going to be dramatically reducing the cost and also the efficiencies of pumping each of our frac stages. The last well that we drilled, Shenandoah South 1H, we were averaging one frac stage a day. We believe this new frac spread from Liberty Energy will dramatically improve the efficiencies and allow the company to pump up to five to seven stages per day with our new equipment. Turn to slide 11, a little bit more details around the well design. for each of the six pilot wells that we are planning. Again, the two wells that we'll drill this year, we will incorporate the learnings from Shenandoah South 1H, and this optimized completion design will be pumped over the 60 stages from each of the wells that we have drilled. Again, we will be taking the learnings from our initial two wells and deploying additional learnings into the four follow-up wells that we will be drilling, completing, and flow testing in 2025. Turn to slide 12. You can see the performance from our Shenandoah South 1H well and extrapolated to a 10,000 foot horizontal. You can see the close kind of alignment of the productivity that we've seen from this initial well kind of lining up with top quartile tight curves in the Marcellus shell regions, particularly in Northeast Pennsylvania. Our goal is to replicate this curve over our full 10,000 foot horizontal for Shenandoah South 2 and 3. And again, look to further optimize and potentially see better productivity as we move from Well 1 to Well 6 in our pilot project in the next 18 months. Moving to slide 13, what is incredibly exciting about the opportunity to de-risk further this 1 million gross acres on the west part of the Beetaloo Basin is the opportunity for significant runway. So if you compare the 1 million acres in our development area in the Beetaloo and you compare that same 1 million acres in northeast Pennsylvania, The one million acres in the Marcellus has been producing 14 BCF a day and they've held that flat for the last 10 years. So we are talking about developing the first two BCF a day and we believe we have significant runway beyond two BCF a day moving forward in 2030 and beyond. Moving to slide 14, you can see part of the a little bit more detail on phase two and phase three of our business plan. Again, we are active in working with our partner, APA, on designing the route selection and also the engineering for a new pipeline that will connect our assets in the Beetaloo Basin to the East Coast gas market. This is a market where we have been proactive. and have signed letters of intent with six of the largest gas retailers, up to 875 million cubic feet a day. Our plan is to convert those letters of intent to a binding gas sales agreement in the next 24 months. That will go toward underpinning the sanctioning of this new pipeline that we'll be working on with APA. And in parallel with that, we have kicked off our pre-feed studies for phase three and the Tamborne operated NTLNG project. Again, we awarded that pre-feed to Bechtel and we couldn't be more excited to be moving forward with one of the premier LNG EPC contractors in the world. Again, we have signed MOUs with BP and Shell for 2.2 million tons of LNG for 20 years each. Over the next 12 months, we will be active in discussions with other parties around looking at additional MOUs to build out our phase three of our business plan. In a little bit more detail on slide 15, you can see a bird's eye view of the Port of Darwin. This is an existing LNG hub. The largest LNG plant, one of the largest LNG plants in Australia is ICTHYS. Operated by Inpex, it produces 8.9 million tons of LNG per year. That represents 10% of Japan's LNG that gets consumed every year. Right to the east of Inpex's Icthys plant is our 420-acre site that we've been awarded by the NT government in May of last year. And this is a very exciting area called Middle Arm. that our 420-acre site resides mid-alarm. There's additional projects being planned, including two hydrogen projects. There's a battery mineral project, two CCS projects. And therefore, there's been a region-wide environmental approval process that's been kicked off and anticipated to complete by the end of 2025. And the Australian federal government has contributed $1 billion around common user infrastructure that will feed into our NTLNG project. We look forward to providing further updates as we get through pre-feed in the next 12 months and look to move into feed as early as second half of 2025. And finally, on slide 16 are the upcoming catalysts. As I mentioned previously, we are in the process of drilling, stimulating, and will be commencing flow testing for Shenandoah South 2 and 3 by the end of this year. And in parallel with that, we will be securing our final stakeholder and regulatory approvals for executing our pilot project. In first quarter of next year, we will look to announce our IP30 flow test results from Shenandoah South 2 and 3. And also by the end of second quarter of next year, we will complete our pre-feed studies with Bechtel on NTLNG. Moving into the balance of the year, we will look to commission our pilot project with the view to target initial first gas from our Shenandoah South pilot project in first half of 2026. Finally, Tamborne appreciates the support of the Northern Territory government and all the people that live in the Northern Territory and the traditional owners in the regions where we operate. And we look forward to working closely with all of our stakeholders, including all of our shareholders listening today through this exciting, transformative next 24 months with this company in working toward delivering two BCF a day by 2030. With that, I want to hand it back to the operator to conduct questions and answers session of our call. Thank you very much.

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