Tamboran mulls farming out stake in Beetaloo permit: interview

Australian shale explorer Tamboran Resources, which recently got listed on the Australian Securities Exchange, is looking to farm out stake in its 100% owned EP 136 gas asset in Beetaloo sub-basin in Northern Territory, company’s CEO Joel Riddle told NGW.

“We have ongoing conversations with companies in Australia that have interest in LNG infrastructure and have to backfill existing LNG contracts that are anticipated to have a shortfall,” Riddle said. “After we see the results of the wells the company is drilling over the next 12 months, we expect there will be material opportunities to look at farming down our EP 136 asset.”

Tamboran's key assets in the Beetaloo sub-basin are a 25% interest in EP 161 and 100% interests in EP 136, EP 143 and EP(A) 197. It expects to deliver the first commercial development from the Beetaloo sub-basin by 2025.

Successful IPO

Tamboran closed a successful IPO on July 2, raising A$60mn ($45mn) from existing shareholders and new investors, including international and domestic institutions. US hedge funds Baupost Group and Lion Point Capital, which own shares in Tamboran, both expanded their interests. The company had raised A$23mn in January as part of the pre-IPO capital raise.

Riddle said the company’s IPO was a true international capital raise with investors from the US, Europe and Asia showing interest. Tamboran's IPO was the biggest in the Australian E&P sector in a decade.

“We are proud of the institutional investors we brought in. They are not just high quality but well diversified. We had Australian investors, US institutional investors as well as investors from Europe and Asia,” he said.

Tamboran intends to use the proceeds from the IPO to fund the drilling of up to three horizontal wells, as well as 2D seismic acquisition. The drilling campaign at EP 161, operated by Santos, in which Tamboran has a 25% interest, commenced in May with the spudding of the Tanumbirini #2H horizontal well.

Drilling of the Tanumbirini #2H well is expected to be completed in July 2021. The rig will then drill Tanumbirini #3H and both wells will be flow tested in H2 2021. 2-D seismic acquisition is anticipated to occur over Tamboran's 100% EP 136 licence in H2 2021 and the Maverick #1H horizontal well is anticipated to be drilled in H1 2022.

According to Riddle, the strong institutional response to Tamboran’s IPO was because of the quality of the assets the company owns in the Beetaloo, the quality of the people it has and the clear commercialisation strategy it has chalked out.

Tamboran has partnered with gas infrastructure company Jemena to build a pipeline that will be connected to the Wallumbilla gas hub in Queensland. “This would provide Tamboran access to two LNG plants in the north and three in the east,” Riddle said, adding the pipeline could be ready by 2027-28.

Government support for Beetaloo development

The Australian government recently released the Beetaloo Strategic Basin Plan to accelerate exploration and development in the Beetaloo sub-basin, believing it to have the potential to be a “world-class” gas province. Beetaloo is one of five gas basins Canberra wants to develop as part of its gas-led economic plan.

Riddle said that the support extended by the government for Beetaloo's development was unprecedented.

“When you have support of a government targeting a specific basin that they want developed, not only do you get money, but also get accelerated approvals as well as additional funds for pipelines,” he said. “The government at the bipartisan level is fully supportive of the development of the Beetaloo.”