TBN

Tamboran Resources Corp. 10-Q Summary

Business Context and Reporting Period

This report covers the quarterly period ended December 31, 2025, and the six months ended on that date. Tamboran Resources Corporation (TBN) is an early-stage natural gas company focused on developing unconventional gas resources in the Beetaloo sub-basin, Northern Territory, Australia. The Company is currently in the exploration and appraisal stage with no revenue generated from operations to date. Management expects first gas sales from the Shenandoah South Pilot Project in the second half of calendar year 2026.

Key Financial Metrics

Note: The Company reported a foreign currency translation gain of $8.5 million for the six months ended Dec 31, 2025, compared to a loss of $17.0 million in the prior year period, due to the strengthening of the Australian Dollar.

Material Changes vs. Prior Period

• Capital Raising: The Company significantly increased liquidity through equity financing. Proceeds from the issuance of common stock totaled $78.4 million, including a public offering in October 2025 ($56.1 million) and a Share Purchase Plan in November 2025 ($11.3 million).
• Debt Financing: The Company entered into a Syndicated Facility Agreement in September 2025 with a total capacity of A$179.8 million. As of December 31, 2025, $33.5 million was drawn down to fund the Sturt Plateau Compression Facility (SPCF).
• Operating Expenses: Total operating costs decreased to $16.0 million from $22.0 million in the prior year. This reduction was driven by a $6.0 million non-recurring "Checkerboard fee" expense in the prior period and a shift in current period spending toward capitalizing drilling costs (SS-4H, SS-5H, SS-6H) rather than expensing them.
• Asset Base: Unproved natural gas properties increased to $415.6 million from $342.3 million, reflecting continued investment in exploration and appraisal.

Guidance, Outlook, and Risks

Outlook and Guidance:

• Management estimates a need for approximately $45.5 million to progress development plans for the remainder of the fiscal year ending June 30, 2026.
• First gas sales are targeted for the second half of 2026, contingent on successful drilling, capital funding, and infrastructure access.
• A Private Investment in Public Equity (PIPE) transaction closed in January 2026, raising an additional $32.0 million.

• Going Concern: The filing states that substantial doubt exists regarding the Company's ability to continue as a going concern due to recurring losses and negative cash flows, though management cites recent capital raises and project milestones as mitigating factors.
• Falcon Acquisition: The Company is pursuing the acquisition of Falcon Oil & Gas Ltd. for approximately $23.7 million in cash and 6.5 million shares of common stock. Risks include regulatory approval, shareholder approval, and integration challenges.
• Legal Proceedings: An injunction application by "Lock the Gate Alliance" regarding the Shenandoah South Pilot Project is pending judgment in the Federal Court of Australia.
• Internal Controls: The Company disclosed a material weakness in internal controls over financial reporting related to insufficient evidence of control performance, inadequate segregation of duties, and IT general controls. Remediation efforts are underway.

Investor Verification Checklist

• Capital Sufficiency: Verify if the $45.5 million estimated requirement for the remainder of FY2026 is fully covered by current cash ($83.4M) and committed facilities, considering the high burn rate for drilling and construction.
• Falcon Acquisition Status: Confirm the timeline and conditions for the Falcon Acquisition closing, specifically shareholder and regulatory approvals, as this impacts dilution and future asset base.
• Legal Injunction: Monitor the outcome of the Federal Court of Australia judgment regarding the Lock the Gate Alliance injunction, which could delay the Shenandoah South Pilot Project.
• Internal Control Remediation: Review future filings to confirm the remediation of the material weakness in internal controls to ensure financial reporting reliability.
• Debt Covenants: Review the Syndicated Facility Agreement terms, specifically the interest rates (BBSW + margin) and prepayment premiums, to assess future interest expense impact.