Tamboran Resources Corporation

11/12/2026 | Press release | Distributed by Public on 11/12/2026 16:22

Quarterly Report for Quarter Ending September 30, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis should be read in conjunction with, and is qualified in its entirety by, our
condensed consolidated financial statements, the accompanying notes to the condensed consolidated financial statements
and other financial information included in this report and in our Annual Report on Form 10-K for the year ended June 30,
2026. For further information on items that could impact our financial condition and operating performance, see the section
entitled "Risk Factors" in this Quarterly Report and in our Annual Report on Form 10-K for the fiscal year ended June 30,
2026, and "Cautionary Note Regarding Forward-Looking Statements" in this report.
The following tables present selected financial information for the periods presented (in thousands):
Three months ended September 30,
2026
2025
Revenue and other operating income
$-
$-
Operating costs and expenses:
Compensation and benefits, including stock-based compensation
(3,394)
(1,994)
Consultancy, legal and professional fees
(4,422)
(1,822)
Depreciation and amortization
(2)
(2)
Accretion of asset retirement obligations
(811)
(289)
Exploration expense
(1,033)
(682)
Camp (expense) recoveries, net
(23)
(1,629)
LNG feasibility study expense
(8)
(191)
General and administrative
(2,162)
(1,598)
Total operating costs and expenses
(11,855)
(8,205)
Other income (expense):
Interest income (expense), net
1,428
(305)
Foreign exchange gain (loss), net
(2,108)
(551)
Other income (expense), net
-
Total other income (expense)
(679)
(856)
Net loss
(12,534)
(9,061)
Foreign currency translation
12,364
1,738
Total comprehensive income (loss) attributable to noncontrolling interest
(1,003)
Total comprehensive loss attributable to redeemable noncontrolling interest
-
Total comprehensive income (loss) attributable to Tamboran Resources stockholders
$(942)
$(6,320)
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Results of Operations for the Three Months Ended September 30, 2026 and 2025
Revenue and other operating income. Commissioning of the SPCF commenced on August 26, 2026, and initial gas
sales from the Group's Shenandoah South 2 pad commenced in early September 2026. As the Pilot Project remained in the
commissioning phase as of September 30, 2026, we did not recognize any revenue and other operating income during the
three months ended September 30, 2026 and 2025, respectively.
Compensation and benefits, including stock-based compensation. Compensation and benefits, including stock-based
compensation, increased by $1.4 million during the three months ended September 30, 2026, as compared to the three
months ended September 30, 2025. The period on period movement was a result of lower stock-based compensation
expense in the comparative period as a result of forfeitures associated with employees who left the Group. Additionally,
increased headcount in the current period relative to the prior year period resulted in an increase in compensation and
benefits.
Consultancy, legal and professional fees. Consultancy, legal and professional fees increased by $2.6 million during
the three months ended September 30, 2026, as compared to the three months ended September 30, 2025, primarily due to
expenses incurred related to options issued to former Falcon executives under the consulting agreements entered into in
connection with the Falcon Acquisition as well as increased legal and other professional fees related to checkerboarding
and other activities in the current period.
Accretion of asset retirement obligations expense. For the three months ended September 30, 2026, an expense for
accretion of asset retirement obligations of $0.8 million was recognized. The recognition of such an expense was primarily
due to the accretion of asset retirement obligation liabilities in relation to all EPs, inclusive of EPs 76, 98, 117, 136 and
161, as well as the SPCF pad and Mako Trough assets. The incremental expense period over period is driven by the wells
drilled in prior fiscal year along with wells acquired as part of the Falcon Acquisition which had a full quarter of accretion
in the current period.
Exploration expense. For the three months ended September 30, 2026, the exploration expense increased by $0.4
million as compared to the three months ended September 30, 2025, as the current period had increased activity for
topographical, geological and geophysical studies and other indirect expenditures relating to the non-operated joint venture
while the prior period focused on the drilling of SS2-1H, SS2-3H, and SS2-5H, resulting in a larger portion of costs
capitalized.
Camp expense recoveries, net. For the three months ended September 30, 2026, expenses for the field camp of less
than $0.1 million were recognized primarily related to camp utilization, camp services and related consumables. These
costs are offset by recoveries from external parties who utilize the camp.
General and administrative. General and administrative costs during the three months ended September 30, 2026
increased by $0.6 million, as compared to the three months ended September 30, 2025 primarily due to increased expenses
related to headcount.
Interest income (expense), net. Interest income, net increased by $1.7 million during the three months ended
September 30, 2026, as compared to the three months ended September 30, 2025, primarily due to interest received from
higher cash at bank and term deposits during the period.
Foreign currency translation. For the three months ended September 30, 2026, we recognized a foreign currency
translation gain of $12.4 million, primarily due to the strengthening of the Australian Dollar as of September 30, 2026, as
compared to June 30, 2026. In the three months ended September 30, 2025, we recognized a foreign currency translation
gain of $1.7 million, primarily due to the strengthening of the Australian Dollar as of September 30, 2025, as compared to
June 30, 2025. Foreign exchange gains and losses resulting from the settlement of foreign currency transactions and from
the translation at fiscal year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are
recognized on our condensed consolidated statement of operations and comprehensive loss.
Income tax expense. We have no income tax expense due to operating losses incurred for the three months ended
September 30, 2026, and 2025. We have provided a full valuation allowance on our net deferred tax asset because
management has determined that it is more likely than not that we will not earn income sufficient to realize the deferred tax
assets during a foreseeable future period. Management will continue to assess the potential for realizing deferred tax assets
based upon income forecast data and the feasibility of future tax planning strategies and may record adjustments to the
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valuation allowance against deferred tax assets in future periods, as appropriate, that could have a material impact on the
condensed consolidated statement of operations and comprehensive loss.
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Liquidity and Capital Resources
We are an exploration and appraisal stage company and will continue to be so until substantial production from our
natural gas properties. We do not expect to generate any substantial revenue from production until early calendar year
2027, at the earliest, which will depend upon successful drilling results, completion of commissioning of the SPCF,
additional and timely capital funding, and access to suitable infrastructure. Until then, our primary sources of liquidity are
expected to be cash on hand and funds from future private and public equity placements, debt funding and/or asset sales.
We expect to incur substantial expenses and generate significant operating losses as we continue to develop our
natural gas prospects and as we:
•complete our current appraisal drilling, testing program and SPCF commissioning;
•develop and commercialize our assets, including development of pipelines, the proposed NT LNG facility and
other infrastructure;
•opportunistically invest in additional natural gas assets adjacent to our current positions; and
•incur expenses related to operating as a public company and compliance with regulatory requirements.
Our future financial condition and liquidity will be impacted by, among other factors, the success of our exploration
and appraisal drilling program, the number of commercially viable natural gas discoveries made, the quantities of natural
gas discovered, the speed with which we can bring such discoveries to production, and the actual cost of exploration,
appraisal and development of our prospects.
For the remainder of the fiscal year ending June 30, 2027, we estimate that we will need to invest approximately
$61.0 million to progress our Pilot Project development plans. We expect cash on hand and available funds from the
committed undrawn portion of the Syndicated Facility to be sufficient to fund the remaining drilling and stimulation costs
of the SS1-6H, SS1-4H and SS1-2H wells for production tie-in during 2027 and remaining SPCF commissioning costs.
However, we may require significant additional funds after June 30, 2027, in order to execute our strategy as planned.
Additional funding may not be available to us on acceptable terms or at all. In addition, the terms of any financing may
adversely affect the holdings or the rights of our stockholders. For example, if we raise additional funds by issuing
additional equity securities, further dilution to our existing stockholders will result. If we are unable to obtain funding on a
timely basis, we may be required to significantly curtail one or more of our planned activities. We also could be required to
seek funds through arrangements with collaborators or others that may require us to relinquish rights to some of our assets
which we would otherwise develop on our own, or with a majority working interest.
Cash and Cash Equivalents
The following table summarizes our key measures of liquidity for the periods indicated (in thousands).
September 30,
2026
June 30,
2026
Cash and cash equivalents
$160,092
$219,135
As of September 30, 2026, we had $160.1 million of non-escrow cash and cash equivalents. This balance represents
a decrease of $59.0 million from June 30, 2026. Cash calls received and proceeds from the Syndicated Facility during the
period were primarily offset by spending from operations on the SS1-6H, SS1-4H and SS1-2H pilot wells, construction of
the SPCF and other corporate expenditure in the fiscal period.
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Capital Commitments
We had the following five-year capital commitments as of the periods indicated (in thousands), which are not
recognized as liabilities or payables on the condensed consolidated balance sheet:
September 30,
2026
June 30,
2026
Capital commitments:
Sweetpea
$24,117
$24,028
EP 161
6,099
6,024
Beetaloo Joint Venture
56,634
73,322
Midstream
$6,995
$22,957
Sweetpea
Sweetpea's committed spend as of September 30, 2026, was $24.1 million, which was related to two licenses, EP
136 with total commitments of $14.6 million and EP 143 with total commitments of $9.5 million.
A renewal application for EP 136 was submitted to the Department of Mining and Energy ("DME") in November
2025, requesting an extension of the permit for a period of 18 months to January 2031. The request for this extension was
not granted but the DME did grant changes to the program which varied the work program conditions for years 2 through
5, suspended the work program conditions of year 2 for a period of twelve (12) months from July 23, 2026 to July 23, 2027
and extended the term of the EP for a period of twelve (12) months from July 23, 2029 to July 23, 2030. These changes
were effective as of July 23, 2026. As such, the Group maintains a minimum work program commitment of $14.6 million.
An application for EP 143 was submitted and approved by the DME in June 2026 requesting a variation of the
minimum work program for years 2 and 3. The total minimum work program commitments remained the same at $9.5
million.
EP 161
For the EP 161 working interest, we are obligated to contribute our share of expenses to uphold our stake in this
permit, for which Santos Limited is the operator. An application was approved in December 2025 to extend the term of the
exploration permit and the required work program which includes the drilling and stimulation of two horizontal wells,
along with related geological and geophysical studies to March 2027. Our commitment through March 2027 is expected to
be $6.1 million based on the minimum work requirements. There are no minimum commitment requirements after March
2027.
Beetaloo Joint Venture
A variation application was submitted to DME in September 2025 to vary the minimum work program for years 3, 4
and 5. On July 3, 2026, the DME approved variations to the minimum work program commitments of EP 98 for years 3, 4
and 5 and EP 117 for years 3 and 4. The DME did not approve variations to years 4 and 5 for EP 76. The terms of the
Beetaloo Joint Venture continue to necessitate specific minimum work obligations through May 2028. These commitments
include an expected spend of $56.6 million related to drilling and multi-stage hydraulic fracturing of four wells, 3D seismic
survey, and subsurface studies, with expenditure across EP 76 of $14.3 million, EP 98 of $28.1 million and EP 117 of
$14.3 million.
Midstream
Committed spend remaining for the SPCF project as of September 30, 2026, was $7.0 million which was related to
the remaining procurement, engineering, construction, testing, inspection and commissioning of the facility.
Other Commitments and Contingencies
On December 19, 2024, TR Ltd., as guarantor, entered into the Facility Agreement with TR West, as borrower, each
a wholly owned subsidiary of the Company, as obligors, and Macquarie, as lender. The Facility Agreement provides TR
West with Facility A amounting to A$25.0 million in availability for performance bonds and includes potential additional
Facility B and Facility C each amounting to A$5.0 million. Availability under the Facility B and Facility C was subject,
among other conditions, to the Company raising additional capital in the amounts of at least A$62.5 million and A$75.0
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million, respectively, which occurred in July 2025 following completion of that equity raise. Accordingly, the full A$35.0
million under Facilities A, B and C is available. On May 13, 2026, the Board approved an increase in the total facility limit
with Macquarie from A$35.0 million to A$40.0 million by way of a new facility of A$5.0 million ("Facility D"). All
Facilities terminate on December 19, 2027. The obligations under the Facility Agreement are unconditionally guaranteed
on a senior secured basis by TR Ltd.
As of September 30, 2026, there was A$28.1 million of letters of credit issued under the Facility Agreement. As of
September 30, 2026, there was A$7.7 million of unused credit under Facility A, less than A$0.1 million of unused credit
under Facility B and Facility C, and A$4.2 million of unused credit under Facility D.
Cash Flows
The following table summarizes our cash flows for the periods indicated (in thousands):
Three months ended
September 30,
2026
2025
Statement of Cash Flows:
Net cash used in operating activities
$(10,176)
$(13,799)
Net cash used in investing activities
(94,392)
(28,434)
Net cash from financing activities
$41,182
$37,937
Net Cash Used in Operating Activities
For the three months ended September 30, 2026, net cash used in operating activities was $10.2 million during which
we incurred a net loss of $12.5 million compared to net cash used in operating activities for the three months ended
September 30, 2025 of $13.8 million, during which we incurred a net loss of $9.1 million. The net loss for the three months
ended September 30, 2026, included the non-cash impacts of depreciation and amortization, stock-based compensation,
performance bond facility fees, accretion of asset retirement obligations, interest income, interest expense, and foreign
exchange differences. Additionally, in the three months ended September 30, 2026, net unfavorable changes in operating
assets and liabilities totaled $3.5 million, primarily consisting of a $3.7 million decrease in accounts payable and accrued
expenses due to timing of our pay cycle during the fiscal period, a less than $0.1 million decrease in trade and other
receivables and a $0.2 million decrease in prepaid expenses and other assets.
Net Cash Used in Investing Activities
For the three months ended September 30, 2026, net cash used in investing activities was $94.4 million compared to
$28.4 million for the three months ended September 30, 2025. In the period ended September 30, 2026, there was spend on
exploration and evaluation activities of $73.3 million in connection with the drilling of the SS1-6H, SS1-4H and SS1-2H
pilot wells, expenditure of $10.5 million related to the SPCF, $10.4 million of Falcon Acquisition transaction costs settled
during the period, $0.3 million related to interest on financing lease liabilities, $0.3 million related to the acquisition of land
in Elliott and $1.6 million related to interest on borrowings under our SPCF Syndicated Facility Agreement, offset by a
cash refund of $2.1 million for Research and Development received by Falcon Australia.
Net Cash from Financing Activities
For the three months ended September 30, 2026, net cash received from financing activities was $41.2 million
compared to $37.9 million received for the three months ended September 30, 2025. The increase was primarily due to
$13.1 million of proceeds from the Syndicated Facility, $28.3 million attributable to contributions from noncontrolling
interest holders to fund their share of cash calls and an increased accrual of $0.5 million related to unpaid performance
bond facility fees, partially offset by repayments of finance lease liabilities of $0.7 million.
Critical Accounting Estimates
Management's discussion and analysis of our financial condition and results of operations are based upon our
condensed consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of
our financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the
reported amounts of certain assets, liabilities and related disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses during the reporting period.
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The impact of, and any associated risks related to, estimates and assumptions are discussed within Management's
Discussion and Analysis of Financial Condition and Results of Operations, as well as in the Notes to the Condensed
Consolidated Financial Statements, if applicable, where estimates and assumptions affect the Group's reported and
expected financial results.
For additional information on our critical accounting estimates, refer to Management's Discussion and Analysis of
Critical Accounting Estimates included in Part II, Item 7 of the Group's Annual Report on Form 10-K for the year ended
June 30, 2025, as filed with SEC on September 25, 2025. There have been no material changes in critical accounting
estimates at September 30, 2026 from those described in the Group's Annual Report on Form 10-K for the year ended
June 30, 2026.
Tamboran Resources Corporation published this content on November 12, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on November 12, 2026 at 22:22 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]