Tamboran Resources Corporation

Thank you for standing by and welcome to the Tamborin Resources first quarter fiscal year 2025 conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, again, press the star one. Thank you. I'd now like to turn the call over to Joel Riddle, Managing Director and CEO. You may begin.

Thank you, and welcome to Tamborin Resources first quarter fiscal year 2025 result presentation. My name is Joel Riddle. I'm the Chief Executive Officer for Tamborin Resources, and I'm joined this morning by Eric Dyer, our Chief Financial Officer. Before we get into the material, I'd like to refer everyone to the disclaimer statement associated with forward-looking statements on slide two. Starting with slide three and the summary of our activities over the last three months in the quarter. First, we completed the drilling of the Shenandoah South 2H well in which the company drilled the first 10,000-foot horizontal section in the Bealeau Basin. Unfortunately, as we were coming out of the hole following the drilling of this horizontal section, we incurred a mechanical issue that required the well to be re-drilled via sidetracks. That side track well is now being drilled in the horizontal section, and we are on target to TD that side track well in the next few days ahead. Data from the SS2H well and the SS2H side track well both demonstrate consistent geologic rock properties that we've seen in comparison to the SS1H well. In addition, we observe no faulting through the full horizontal section. And we saw strong gas shows all the way through the entire interval. Drilling of the SS3H well is expected to commence later this month from the same well pad. And again, the SS3 well will be designed very similar to the SS2H well with a 10,000 foot horizontal. Both the SS2H sidetrack well and the SS3H well are expected to both be drilled encased by the end of this year. Liberty Energy also successfully mobilized new FRAC equipment from the U.S. into the Beetaloo Basin ahead of stimulation of our two wells planned for early first quarter of 2025. And also, as I foreshadowed at our last call, the company remains focused on progressing the development of the first local sand mine in the Beetaloo Basin And we hope to have phase one of this local sand mine up and running and in place as part of our 2025 drilling campaign. We believe this local sand mine will be a key driver to reducing cost and improving efficiencies for our 2025 drilling program and beyond. The cash balance that we held following the end of this quarter was approximately $82 million. About $7.6 million of receivables were associated with the sale of a rig here in the US that has more than offset the additional $5 million the company has incurred associated with the re-drilling of SS2H. Most importantly, we remain fully funded and on track to deliver our IP30 flow rates for both wells by the end of first quarter of 2025. Moving to slide four is a summary of the results for the first two wells that have been drilled on the 2024 drilling program. You can see, again, the wells that we're drilling is the first two wells of a six-well campaign that are right in the middle of our million-acre development area on the west part of the Beeloo Basin. You can see by the picture on the right is the well pad in which we're drilling our first two wells. You can see the stimulation sand that has arrived on site and also the area on the northwest corner of the pad reserved for our compression facility that we plan to commission during the year of 2025. As I said up front, the SS2 well was sputted in late August and we drilled to a total measured depth of 20,670 feet in 35 days. Within this well, we also geosteered a 10,000-foot horizontal section, which, again, is the longest horizontal section that has been drilled in the mid-valkyrie B target in the Beetaloo Basin to date. Prior to running our 5.5-inch casing, a downhole mechanical issue in the hull required the well to be re-drilled and sidetracked from approximately 1,840 feet. We've now incorporated key lessons from the SS2H well in the sidetrack well, and we've now successfully drilled approximately 16,200 feet with material increase in drilling efficiencies from SS2H to the sidetrack well. Following the drilling of the SS2H sidetrack well and casing this well, we will move immediately to the SS3H well in which we plan to commence drilling later this month from the same well pad. As I mentioned, the IP30 flow rates for both wells remain on track for release in first quarter 2025, subject to weather conditions. Moving to slide five, you can see the depth days versus depth curve for each of the three wells that the company has drilled in the last six months, the SS1H well, the SS2H well, and the SS2H. 2H sidetrack well in red. One of the biggest opportunities for the company that we've been able to execute over the last two wells is to incorporate learnings from the SS1H well associated with improved drilling rates. We've seen a 60% increase in the average spud to TD drilling rate from SS1H to SS2H, where we exceeded 580 feet per day as compared to approximately 370 feet a day in SS1H. And broadly, as we compare this drilling performance across other wells drilled in the basin, particularly in the deepest sections on the east part of the basin, you can see The 35 days that we were able to achieve to reach TD and SS2H compares quite favorably to the two wells drilled by our partner, Santos, that were approximately 80 days. In addition, we've seen improved efficiencies from SS2H to SS2H sidetrack well, and we remain on track to drill that sidetrack well in less than 30 days. If we move to slide six, again, a comparison of the three wells that we drilled over the last six months. And I want to highlight the key successes and lessons learned from each of these wells, particularly focusing on SS2H. First is we were able to land a lateral section without any pilot hole. Not only did that confirm our geologic thesis, around the location of SS2H, which is approximately three miles north of SS1H, but it also saved six days on drill time. Second, we were able to geo-steer through a 70-foot section, and we incurred no faults through the full 10,000-foot section. On the learning side, there's been quite a bit of focus on reducing non-productive time. we were able to improve our performance in the sidetrack well by using a KCL mud versus the calcium chloride mud that we used for both SS1H and the SS2H well. So that improved mud system allowed us to shave quite a few days off the sidetrack well performance. In addition, we've been working with our partner, Baker Hughes, on improving the number of tool failures that we've had, particularly the RSS tool failure that we've had a number of issues with in the SS2H well. That combined with an improved mud system, we've been able to drill the horizontal section as articulated on the well schematic on the left from 17 days in the SS2H well to a projected 10 days in the sidetrack well. Moving to slide seven, one of the most encouraging things we've seen in the drilling of the SS2H well and the SS2H sidetrack well is the consistency in the geology as compared to what we saw at SS1H well. Again, the SS2H location is about three miles away from the SS1H location. And you can see by the log section of the 10,000 foot horizontal that we drilled, in SS2H looks very consistent and rock properties that we saw at SS1H. In addition, we saw no faulting across this full horizontal section and strong gas shows across the whole horizontal section. These gas shows look very similar to what we saw at SS1H. So overall, this is a very encouraging and our ability to demonstrate a consistency around productivity across this 10,000 foot horizontal as compared to the SS1H well. Moving to slide eight, as I mentioned, we now have the full Liberty frac spread on location that's been imported from the US. This will be the largest frac spread in all of Australia, 80,000 horsepower, 32 pumps, 240 sandboxes. I'm incredibly excited about the opportunity to see optimized stimulation across the 120 stages that we'll be pumping across two wells, and also the potential for material cost reductions, not just for the two wells that we're drilling and completing this year, but also for the four follow-up wells that we have next year. Our target is to be pumping five to seven stages a day with this new equipment, and that compares very favorably to the one stage a day that we were pumping with the previous equipment that we used for SS1H. Moving to slide nine, again, we are progressing the development of the first local sand mine in the Beteloo Basin. You can see on the map in the upper left-hand corner of the slide the 11 sand mining leases that the company has been granted by the NT government. Three of those locations we've identified a sand resource that could generate an equivalent 100 mesh sand that we need for our completions. And the quantum of sand that we've identified is enough to support the completion of 500 development wells. One of the things I'm most excited about is as we move down this cost curve on sourcing sand locally in the Beteloo Basin, we have the opportunity to reduce our current sand cost in our wells of around $4.5 million to approximately half a million dollars per well. So in other words, we have an opportunity to reduce the overall well cost for our 2025 program and beyond at approximately $4 million for each well. Moving to slide 10, our current cast position as of The September 30th of this year is approximately $82 million. You can see we started the quarter with a cash balance of $75 million, an additional $7.4 million, incorporating the green shoe post our IPO in late June. We've had approximately $19 million in cash that's gone into the ground for the drilling of our two wells. In addition, we had net proceeds of $7.6 million from the sale of a US rig that we've been marketing for the last few months. And that $7.6 million in net proceeds, again, more than offsets the $5 million of budget impact we've had associated with the re-drilling of our SS2H sidetrack well. Importantly, the company remains fully funded to deliver our IP30 flow rates from our two wells that we anticipate announcing to market in late first quarter of 2025. And finally on slide 11 is the upcoming catalyst. Again, we look to finalize the drilling and casing of SS2H sidetrack and the SS3H well. We will initiate stimulation activities and flow testing of these two wells in first quarter. And currently on track to announce our IEP 30 flow rate results from these two wells in later part of first quarter of 2025. In parallel with all this, we're finalizing the stakeholder and regulatory approvals associated with our pilot project. And also that will lead us to commencing construction of the facility and pipeline infrastructure to support our pilot project. first gas that, again, we're anticipating in first half of 2026. Thank you very much, and I'll turn it back over to the operator for a Q&A session from here. Thank you.

Thank you. We will now begin the question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star 1 again. Your first question today comes from the line of Charles Mead from Johnson Rice. Your line is open.