Tamboran Resources Corporation

Welcome to Tamborine Resources second quarter fiscal year 2025 earnings release conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce Joe Riddle, Chief Executive Officer. Thank you, sir. You may begin.

Thank you and welcome to Tamborin Resources second quarter fiscal year 2025 result presentation. My name is Joe Riddle, Chief Executive Officer for Tamborin Resources. And joining with me this morning is Eric Dyer, Chief Financial Officer. Before we get into the materials, I'd like to refer everyone to the disclaimer. on slide two associated with forward-looking statements. Moving to slide three and the highlights of the last quarter. First, the company successfully drilled and cased the SS3 well. This well included a full 10,000-foot horizontal section and drilled at a Bigaloo Basin record 840 feet per day. Two, we completed the SS2H well. Over 35 frac stages were pumped. and we delivered a record profit intensity over those 35 stages. The company will be targeting an IP30 flow test in April of this year, and following the 30-day flow test from SS2, we will be moving to SS3 to finish completion operations and target an IP30 flow test for SS3 in June of this year. The company continues to make progress toward a final investment decision for the Shenandoah South pilot development project. Over the quarter, we entered into binding agreements with the APA group to support the build and construction of a 12-inch pipeline connecting the SS pilot to the local 12-inch pipeline to move gas from our pilot project to the local Northern Territory gas market where we'll be producing 40 million cubic feet a day over the next 15 years. First guess from this project remains on track to start in first half of 2026. Over the quarter, the company continues to make good progress around business development opportunities, including the progression of a data center strategy that we would envision being part of an expansion to our phase one development. I will talk more detail around this later in the presentation. And finally, the company signed a non-binding MOU with the ASX listed E&P company Zantos around progressing technical studies associated with the expansion to the Darwin LNG project. The company ended the quarter with a cash balance of $59.4 million. This is following receipt of a R&D grant of $6.2 million. And the company remains fully funded to deliver IP30 flow tests from SS2 and SS3 through the end of June of this year. Moving to slide four, in more detail around the progression of our Shenandoah South pilot development, you can see by the map in the middle of the page, the company remains very focused around the million acre development area that's highlighted in the structure map on the left in yellow. As you zoom down into the middle of that million-acre development area is our six-well pad where we've now drilled two horizontal wells. These are the first two of six wells that we anticipate to develop our 40 million cubic feet a day for this pilot development. You can see by the picture on the right, this is a snapshot of the new Liberty equipment that is currently on site and has been progressing the completion of our SS2 and SS3 wells. Again, over the quarter, the company successfully drilled the FS3H well to 21,169 feet, and we completed this drilling in 25 days. Again, that represents over 840 feet per day that was achieved on drilling performance and remains the fastest well that has been drilled in the Beeloo Basin to date. We geosteered the full 10,000-foot horizontal section within a 65-foot radius, target, and what we saw within that 10,000 foot horizontal well was a high quality contiguous middle bacteria deshell, and most importantly, no faulting. The company commits simulation operations on FS2 and FS3 in January of this year. On FS2, we completed 35 track stages across the 5,500 foot horizontal section. and achieved BLE-based in records for average profit intensity across those 35 stages. On FS3, the company took precautionary and proactive steps to pause completion operations based on a detection of stress and a case in connection. Remediation activities on FS3 are ongoing, and we are targeting a continuation of the simulation program in second quarter of this year. Overall, we'll be targeting IP30 flow rates from SS2 in April of this year and an IP30 from the SS3 well in June of this year, subject to weather conditions. Moving to slide five, the company continues to make significant improvements in drilling performance from our last well that we drilled over the quarter in SS3. This well was drilled in 25 days. At an average speed of 843 feet per day, that represents 43% faster than the SS2H well. In reference to the table on the bottom part of the slide, you can see the increases in performance we've made in SS3, primarily driven by the section of the top holds and the rope section, where historically it's taken between 10 and 11 days to drill that section. Now in SS3, We drilled that section in less than five days. And in the horizontal section where it took 17 days to drill in SS2, we were able to drill in 12 and a half days. The total drilling cost for SS3 is approximately $10 million, and the company has identified significant cost savings that will drive further reductions and increase drilling performance in our follow-on pilot development wells being drilled in the second half of this year. to slide six one of the most encouraging elements of our two well drilling program this year has been the consistency in the geology that we've seen in our two wells ss2 and ss3 as it compares to the ss1 pilot hole that is roughly three miles south from these two horizontal wells we've seen very consistent quality and a very gentle undulating structure across the full horizontal section with no faulting observed. In addition, we see very strong gassos across both horizontal sections, which we believe will translate into very good productivity in our well test in both wells. Moving to slide seven, the summary of the simulation campaign from SS2 and SS3. On our SS2 well, we completed 35 stages with our new Liberty equipment that's currently on site. This was done over a 5,500-foot section, and we were pumping a profit intensity of approximately 2,700 pounds per foot. This represents a 26% higher profit intensity that we pumped at SS1H. And most encouragingly, the 18 of the 35 stages, we successfully executed the full Tamborin V2 design of pumping greater than 2,800 pounds per foot and pumping in at 90 to 100 barrels a minute. We're also able to achieve five stages a day for the single well operation on multiple days. And this is in line with U.S. operational efficiencies. We're currently cleaning up the SS2H well. ahead of commencing a IP30 that will have a result to report to market in April of this year. On the SS3, while we took proactive and precautionary steps to undertake a remediation of a stress and a casing connection that was observed, we anticipate this remediation to be resolved in the next 30 days ahead of recommencement of simulation activities in second quarter of this year. We see this as an opportunity to incorporate lessons from the SS2H well to increase efficiencies and place a higher profit intensity across the 60 stages that we plan to pump in SS3. We'll be targeting an SS3 IP30 flow test result in June of this year. Moving to slide eight and a summary of the completion designs between Senadilla South 1H, Senadilla South 2H and Senadilla South 3H. As you can see we've had the opportunity to apply learnings from the SS1H well into our recent SS2H well that we're calling our Camborne V2 design. This is a design where we pumped 35 stages at a little over 2,700 pounds per foot and we pumped 90 to 100 barrels a minute. We are anticipating targeting IP30 flow test results of greater than 10.7 million cubic feet a day. Again, we are targeting this IP30 flow rate by April of this year. We will have the opportunity to apply learnings from this SS2 H well into our SS3 H well, and where we will have the opportunity to optimize the Tamborin V2 design where we anticipate pumping 60 stages at greater than 2,800 pounds per foot and greater than 100 barrels a minute. We are planning to target IP30 flow rates of greater than 19 million cubic feet a day for the Shenandoah South 3H well test that we anticipate in June. Moving to slide nine, we remain on track for delivering our SS pilot project by first half of 2026. The results of our two wells, Shenandoah South 2H and Shenandoah South 3H will guide the number of wells that we will follow up and drill later this year that will deliver into a binding gas sales agreement of 40 million a day for 15 and a half years with the Northern Territory Government. Over the quarter, we signed binding agreements with APA Group to deliver a 12 inch type line that will connect the pilot project to the local Northern Territory Pipeline called the Amadeus Gas Pipeline that will deliver this 40 million cubic feet a day to the local Northern Territory gas market. We also commenced procurement of the 40 million a day facility. We'll be finalizing approvals for our Schindler and Dillis South pilot project in the next few months ahead of a final investment decision that we'll look to take in mid 2025. Again, our project remains on track to deliver first gas of 40 million cubic feet a day in first half of 2026. Moving to slide 10, as I mentioned in my opening comments, the company is looking at an opportunity to expand our phase one development to include additional gas supply that could feed into a data center strategy. You can see by the map on the left, Australia is becoming a major data center hub. Over 200 data centers are currently in Australia, and we believe the Northern Territory has the opportunity to be a growth area for new data centers. Given the existing fiber optic cables that connect the Northern Territory within other areas of Australia, but most importantly into Asia-Pacific, these fiber optic cables run about 30 miles from our Shenandoah South pilot project, and we believe that this creates an opportunity to match gas from the Beetlewood Basin to feed into energy for new data centers being constructed in the Northern Territory. We have commenced commercial discussions with potential partners to develop multiple data centers in the Northern Territory, and we will be updating the market further as we continue to make progress on this strategy. Moving to slide 11, over the core, we also executed a non-binding MOU with Santos to evaluate an expansion to the existing Darwin LNG plant that Santos operates. This non-binding MOU will consider technical studies to look at developing new supply from our jointly held EP161 permit and connecting that to the Darwin LNG expansion where we anticipate up to 6 million tons of new LNG capacity being built at Darwin LNG via brownfield expansion. We believe this creates a really great opportunity to potentially integrate this Darwin LNG expansion with our phase three NTLNG development. Moving to slide 12, the company ended the quarter with a cash position of $59.4 million. That includes $6.2 million that the company received via an R&D credit over the quarter. The company remains fully funded to deliver IP30 flow rates for our SS2 and SS3 wells. In addition, Tamborin is evaluating a range of options to fund the remaining wells and our SS pilot development. and also associated infrastructure. In addition, the company continues to explore potential farm out opportunities to accelerate our phase two and phase three developments. These farm out opportunities could include the drilling of additional wells to support reserve maturation to underpin infrastructure tied to phase two and phase three of our business plan. Moving to slide 13, you can see the upcoming catalyst. starting in March where we'll commence the flow testing of our SS2 H well and target an announcement on our IP30 from this SS2 well in April. Following the well test of SS2, we'll move to stimulate and flow test our SS3 well and target an announcement on our IP30 flow test from SS3 in June. In mid-2025, we'll look to take a final investment decision under SS pilot program that will again target first gaps from this pilot project in first half of 2026. Thanks very much and I'll turn the call back over to the operator for our question and answer session. Thank you.

Thank you. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. and for participants using speaker equipment, it may be necessary to pick up your handset before pressing the start keys. One moment while we poll for questions. Our first question is from Kalei Akamine with Bank of America. Please proceed.