Along with its successful initial public offering (IPO) on the New York Stock Exchange (NYSE) in June, Tamboran secured a longterm gas contract with the Northern Territory government, reflecting the company’s plan to prioritise the local gas market.
Tamboran is focused on bringing its natural gas asset in the Northern Territory’s Beetaloo Basin to production through multiple commercialisation pathways. Shale gas from the Beetaloo has at least five times less carbon dioxide (or about 4 per cent) than the average of around 15 to 20 per cent in large, undeveloped, conventional fields offshore northern Australia.
Tamboran’s NYSE listing saw the issue of about 3.4 million shares at US$24 per share to raise US$82 million, which is now being used to fund a two-well drilling program.
Tamboran Managing Director and Chief Executive Officer Joel Riddle told Petroleum Australia the IPO was a significant milestone and the first non-revenue exploration and production IPO on the NYSE in 15 years, reflecting a sign of the times of traditional forms of energy and projects being financed by one of the deepest capital markets in the world.
Riddle said: “The capital raised is funding the drilling of two big wells at Shenandoah South, which at 3,000 metres will be the longest horizontal wells drilled into the Beetaloo to date and two of the longest wells drilled in onshore Australia.
“With success, that will get us to a position to sanction our proposed pilot development.” Reflecting the significance of Tamboran’s proposed operations, the NT government designated the company’s Beetaloo project with Major Project Status in June, which Riddle said was another milestone that would prioritise and elevate development and see accelerated approvals.
Tamboran began the Shenandoah South (SS) pilot project drilling program at the end of August with the spudding of the SS- 2H well, which will immediately be followed by the drilling of SS- 3H from the same pad ahead of the stimulation program with the
Liberty Energy modern completion equipment, which has recently been imported from the US. The two wells will be drilled over 30 days each with a Helmerich & Payne super-spec FlexRig® Flex-3 rig, and will target the Middle Velkerri B shale at a depth of about 3,020 metres.
Tamboran had previously reported an average IP90 flow test for the SS-1H well of 2.9 million cubic feet per day over a 500-metre horizontal section in the Mid Velkerri shale, the highest rate when normalised over 1,000 metres produced in the Beetaloo Basin.
Riddle said: “This was the highest productivity per 1,000 metres of horizontal that we’ve seen in the 15 years companies have been exploring and appraising in the Beetaloo, so we’re super excited about the opportunity to get back on the same geology and drill 3,000 metres.
“We only stimulated 500 metres of the Shenandoah South 1H well with 10 stages, and now we will be pumping six times the number of stages on each of these new wells being drilled in 2024.
“If we get the same productivity per section, we will potentially see above 18 million cubic feet a day per well, which would be by far the largest gas flows that we’ve seen in the Beetaloo Basin.”
NT GAS SUPPLY SECURED WITH LONG-TERM DEAL
In April 2024, Tamboran signed a binding long-term take-or-pay gas sales agreement to supply the Northern Territory government with 40 terajoules a day for an initial term of nine years from the Shenandoah South pilot project.
Riddle explained the contract provided a pathway to first production for Tamboran’s pilot project and would directly impact the Northern Territory’s energy security in a positive way.
He said: “We’ve always been focused as a company for first production out of the Beetaloo Basin to serve the benefit of the local community.
“The gas market in the Northern Territory has had significant declines in the last two years, primarily driven by lower production at Eni’s Blacktip offshore field, so energy security has been a significant issue for Territorians.”
Riddle noted that electricity in the NT was mostly sourced from gas-fired power, so having first gas flows out of the Beetaloo would serve the local community, helping to keep the lights on and the air conditioning in Darwin blowing.
He added: “This is right down the middle of our strategy, which is territory first – we want to see the territory benefit in everything that we do.
“It’s amazing how certain LNG projects have been developed – there’s two in Darwin, three on the east coast – but none of them have a domestic gas reservation, all the gas is exported and nothing is left for the local community.
“We want to do things differently, where we prioritise the local gas market first, and once we have a well-supplied local market then we’ll look to export.”
Tamboran’s export plan will be undertaken through its proposed NTLNG development at the Middle Arm Sustainable Development Precinct in Darwin Harbour, where the company has secured
exclusivity over 420 acres for a 6.6-million-tonne a year LNG facility.
Tamboran is currently progressing pre-Front End Engineering and Design (FEED) studies with Bechtel Corporation, the world’s leading LNG EPC contractor. In July 2024, Tamboran was granted an interim agreement by the NT government, providing exclusivity over the acreage until the end of 2027, with two one-year extensions.
