Tamboran Res — Key Risks
Going Concern Warning: The Company May Not Survive Without Immediate Outside Funding
The company has formally disclosed "substantial doubt" about its ability to continue as a going concern — meaning its auditors have questioned whether it can stay in business. It has accumulated a deficit of $167.3 million as of June 30, 2025, generates no revenue, and expects losses to continue growing. Management believes recent private placements provide enough runway only through calendar year 2025, with planned drilling funded only through the end of fiscal year 2026 at best.
No Revenue, No Reserves, and Only One Productive Well So Far
The company has drilled only four wells as operator, and currently considers just one of those wells productive enough to justify completion. It has zero proved reserves and no natural gas sales. One well (SS-2H) had to be plugged and re-drilled due to a mechanical failure, and completion work on another (SS2-4H) was paused due to detected casing stress. Without commercial production, every other part of the business plan remains purely theoretical.
The Business Needs Billions in Capital It Does Not Have
Getting to commercial production requires roughly $30 million per well in drilling and completion costs, plus the construction of new pipelines, gathering systems, and eventually an LNG export terminal. The company has no committed external funding. ASX listing rules also cap new share issuances at 15% of shares outstanding per year without shareholder approval, directly limiting how fast it can raise money in a crisis.
Pipeline Infrastructure Does Not Yet Exist to Move the Gas
Even if drilling succeeds, the company cannot sell gas without pipeline capacity that has not been built. Its planned production would exceed the existing Beetaloo pipeline's capacity, and it is still negotiating with APA Group to build an expansion. No binding agreement exists yet. Without new takeaway capacity, gas would have to be shut in, meaning no revenue even from successful wells.
Native Title, Indigenous Rights, and Land Access Could Delay or Block Operations
The company operates on land where native title rights legally exist and has obligations under Australia's Native Title Act 1993 and the Aboriginal Land Rights Act. Gaining production licenses requires negotiating with traditional Aboriginal landowners and land councils. Applications over Aboriginal land can be placed into a five-year moratorium. Failure to reach agreements — or community opposition from pastoralists — could halt drilling or delay permits for years.
Australian Government Could Change the Rules on Natural Gas Development
The Northern Territory previously imposed a moratorium on Beetaloo operations that lasted until 2018. A shift in energy policy at either the federal or NT government level could impose new moratoriums, restrict hydraulic fracturing, raise royalties, or cut industry incentives. The company is also legally required to produce on a Scope 1 net zero basis once commercial production exceeds 100,000 tonnes of CO2-equivalent per year, adding compliance costs that are difficult to estimate today.
The LNG Export Vision Rests on Non-Binding Deals With bp and Shell
The company's long-term growth depends on building an LNG export terminal (NTLNG) with a targeted start of 2033. It has memoranda of understanding with subsidiaries of bp and Shell for 4.4 million tonnes per annum of offtake — but these are explicitly not binding obligations. Either party can walk away, and without anchor customers, the terminal project cannot proceed.
A Material Weakness in Financial Controls Has Already Been Identified
Auditors found a material weakness in the company's internal controls for both fiscal years 2024 and 2025. Specific problems include inadequate segregation of duties, poor IT controls over its accounting system, and difficulty accounting for complex transactions under GAAP. This raises the risk of financial reporting errors and could make it harder to attract institutional investors or lenders.