Tamboran raises $89 mln in big bet on Australian shale gas

Tamboran Resources

19/09/2022 14:01

By Sonali Paul
    MELBOURNE, Sept 19 (Reuters) - Tamboran Resources  TBN.AX 
said it attracted strong interest in a A$133 million ($89
million) sale of new shares on Monday to pay for a majority
stake in a promising Australian shale gas prospect and help fund
its development.
    The acquisition of the 77.5% stake in the Beetaloo joint
venture from Origin Energy  ORG.AX  in a 50-50 partnership with
its top shareholder, ex-Parsley Energy CEO Bryan Sheffield,
turns Tamboran into the dominant player in a sub-basin seen as
comparable to the biggest U.S. gas field, the Marcellus Shale.
    Tamboran and Sheffield agreed to pay Origin A$60 million up
front plus a 5.5% royalty on future production from the Beetaloo
joint venture and sell Origin 36.5 petajoules of gas, or 100
terajoules a day, over 10 years.  urn:newsml:reuters.com:*:nL1N30P0NT
    Tamboran aims to start producing gas in 2025, focusing on a
permit acquired from Origin called Amungee, underpinned by the
gas sales agreement, Chief Executive Joel Riddle told Reuters.
    The share sale to pay for the deal was pitched at A$0.21 a
share, a 29% discount to Tamboran's close last Wednesday and
nearly half the price investors paid in its initial public
offering in July 2021.  urn:newsml:reuters.com:*:nL3N2O31VS
    Riddle said the deal sharply boosted the company's growth
prospects, with gas sales locked in with Origin and the
potential to eventually supply gas to liquefied natural gas
(LNG) export plants in Darwin or on Australia's east coast.
    "No one wants to take dilution, of course. But when you look
at the opportunity, by acquiring the Origin assets this is
hugely accretive," Riddle said in an interview.
    The challenge now is to cut drilling costs to A$20 million
per well with rigs that can drill 4,000-metres horizontally,
four times what it can do with rigs now in Australia. That would
bring the cost of its pilot project to around A$300 million,
Riddle said.
    Ireland-based Falcon Oil & Gas  FO.V  owns the remaining
22.5% stake in the Beetaloo joint venture.
   
    ($1 = 1.4950 Australian dollars)

 (Reporting by Sonali Paul; Editing by Kirsten Donovan)
 ((Sonali.Paul@thomsonreuters.com; +61 407 119 523;))