Tamboran Resources Corporation(TBN) - 2025 Q3 - Quarterly Report

Part I - Financial Information Presents the company's unaudited condensed consolidated financial statements and management's discussion and analysis Item 1. Financial Statements Presents unaudited condensed consolidated financial statements for March 31, 2025, and June 30, 2024, detailing financial position and performance Condensed Consolidated Balance Sheets Condensed Consolidated Balance Sheets | Metric | March 31, 2025 (USD) | June 30, 2024 (USD) | | :-------------------------- | :------------- | :------------ | | Cash and cash equivalents | $25,635,594 | $74,745,897 | | Total current assets | $37,947,197 | $97,330,881 | | Unproved properties | $303,320,471 | $230,119,448 | | Total non-current assets | $343,575,757 | $261,313,150 | | TOTAL ASSETS | $381,522,954 | $358,644,031 | | Total current liabilities | $34,376,797 | $27,997,998 | | Total liabilities | $56,188,250 | $50,958,331 | | Total stockholders' equity | $325,334,704 | $307,685,700 | Condensed Consolidated Statements of Operations and Comprehensive Loss Condensed Consolidated Statements of Operations and Comprehensive Loss | Metric | 3 Months Ended Mar 31, 2025 (USD) | 3 Months Ended Mar 31, 2024 (USD) | 9 Months Ended Mar 31, 2025 (USD) | 9 Months Ended Mar 31, 2024 (USD) | | :-------------------------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Revenue and other operating income | $0 | $0 | $0 | $0 | | Total operating costs and expenses | $(8,800,790) | $(3,559,936) | $(30,793,708) | $(14,607,878) | | Net loss | $(8,172,646) | $(2,647,338) | $(30,428,317) | $(13,919,968) | | Net loss attributable to Tamboran Resources stockholders | $(6,656,997) | $(3,282,555) | $(26,718,517) | $(12,498,584) | | Net loss per common stock (Basic and diluted) | $(0.458) | $(0.321) | $(1.864) | $(1.367) | Condensed Consolidated Statements of Stockholders' Equity Condensed Consolidated Statements of Stockholders' Equity | Metric | Balance at July 1, 2024 (USD) | Balance at March 31, 2025 (USD) | | :---------------------------------- | :---------------------- | :------------------------ | | Common stock | $13,915 | $14,536 | | Additional paid-in capital | $404,594,023 | $421,949,930 | | Accumulated other comprehensive loss | $(11,512,975) | $(25,019,856) | | Accumulated deficit | $(130,379,771) | $(157,098,288) | | Total Tamboran Resources stockholders' equity | $262,715,192 | $239,846,322 | | Noncontrolling interest | $44,970,508 | $85,488,382 | | Total stockholders' equity | $307,685,700 | $325,334,704 | - Issuance of common stock under greenshoe option: 309 shares, $6,930,541[28] - Contributions from noncontrolling interest holders: $48,456,725 for the nine months ended March 31, 2025[192] - Net loss attributable to Tamboran Resources Corporation stockholders: $(26,718,517) for the nine months ended March 31, 2025[24] Condensed Consolidated Statements of Cash Flows Condensed Consolidated Statements of Cash Flows | Cash Flow Activity | 9 Months Ended Mar 31, 2025 (USD) | 9 Months Ended Mar 31, 2024 (USD) | | :---------------------------------- | :-------------------------- | :-------------------------- | | Net cash used in operating activities | $(23,204,964) | $(10,494,282) | | Net cash used in investing activities | $(73,680,878) | $(45,362,228) | | Net cash from financing activities | $48,344,120 | $76,145,281 | | Net (decrease) increase in cash and cash equivalents | $(48,541,722) | $20,288,771 | | Cash and cash equivalents at end of period | $25,635,594 | $25,908,574 | Notes to the Condensed Consolidated Financial Statements Note 1 – Business and Basis of Preparation Tamboran Resources, an early-stage natural gas company, has no revenue and faces substantial doubt about its going concern ability, relying on future capital - Tamboran Resources Corporation is an early-stage growth-oriented natural gas company, focused on developing low CO2 unconventional gas resources in the Beetaloo sub-basin, NT Australia[31] - The Group has not generated revenues since inception and had no revenues from its gas operations as of March 31, 2025[31][37] - As of March 31, 2025, the Group had an accumulated deficit of $157.1 million since inception[37] - These factors raise substantial doubt regarding the Group's ability to continue as a going concern, dependent on obtaining additional capital[33][37] Note 2 – Variable Interest Entities The company consolidates TB1 and SPCF Sub Trust as Variable Interest Entities, acting as primary beneficiary due to management control and exposure to losses - Tamboran (B1) Pty Ltd ("TB1") is a 50/50 joint venture with Daly Waters Energy, LP ("DWE"), consolidated as a VIE where Tamboran is the primary beneficiary due to management control and greater exposure to losses[53][54][56] - TB1 completed the acquisition of a 77.5% share of Beetaloo Basin assets, EP 76, EP 98, and EP 117[57] - Tamboran SPCF Pty Ltd ("TR SPCF") established SPCF Sub Trust, a 50%/50% trust with Daly Waters Infrastructure, LP ("DWI") for the Sturt Plateau Compression Facility ("SPCF"), consolidated as a VIE where Tamboran is the primary beneficiary[63][64] TB1 Assets and Liabilities (March 31, 2025 vs June 30, 2024) | Metric | March 31, 2025 (USD) | June 30, 2024 (USD) | | :---------------------------------- | :------------- | :------------ | | Cash and cash equivalents | $4,320,006 | $1,488,541 | | Unproved properties | $249,990,573 | $167,998,061 | | TOTAL ASSETS | $290,691,431 | $217,916,913 | | TOTAL LIABILITIES | $194,131,126 | $154,749,728 | SPCF Sub Trust Assets and Liabilities (March 31, 2025) | Metric | March 31, 2025 (USD) | | :---------------------------------- | :------------- | | Cash and cash equivalents | $759,398 | | Assets under construction - natural gas equipment | $17,567,615 | | TOTAL ASSETS | $19,412,773 | | TOTAL LIABILITIES | $4,492,054 | Note 3 – Property, Plant and Equipment & Natural Gas Properties Unproved natural gas properties increased to $303.3 million, reflecting exploration; SPCF assets grew, and Rig 403 disposal resulted in a $0.4 million loss - Unproved natural gas properties increased to $303.3 million as of March 31, 2025, from $230.1 million at June 30, 2024[68] - Assets under construction related to the SPCF increased to $17.6 million as of March 31, 2025, from $7.5 million at June 30, 2024[73] - Disposal of rig 403 in October 2024 at a price of $8.5 million, resulting in a recognized loss on assets held for sale of $0.4 million[74] - Received a cash refund of $6.2 million in December 2024 for eligible R&D expenditure for EP 136[69] Note 4 – Leases The company holds operating and finance leases, including a significant H&P Rig Lease, with total lease liabilities of $26.9 million as of March 31, 2025 Right-of-Use Assets and Lease Liabilities | Metric | March 31, 2025 (USD) | June 30, 2024 (USD) | | :---------------------------------- | :------------- | :------------ | | Operating lease right-of-use assets | $736,944 | $962,052 | | Finance lease right-of-use assets | $18,864,368 | $20,697,452 | | Total Right-of-Use Assets | $19,601,312 | $21,659,504 | | Current portion of operating lease obligations | $243,058 | $397,999 | | Non-current portion of operating lease obligations | $511,432 | $587,250 | | Current portion of finance lease obligations | $13,760,869 | $12,767,400 | | Non-current portion of finance lease obligations | $12,358,826 | $14,141,713 | | Total Lease Liabilities | $26,874,185 | $27,894,362 | - The drilling contract with Helmerich & Payne International Holdings LLC (H&P) for the FlexRig® is recognized as a finance lease, with an end date of mid-April 2027[78] - Finance lease expense is capitalized as part of unproved properties when the leased asset is directly involved in drilling wells[46] Note 5 – Accounts Payable and Accrued Expenses Accounts payable and accrued expenses increased to $20.4 million as of March 31, 2025, primarily due to higher accrued capital expenditure Accounts Payable and Accrued Expenses | Metric | March 31, 2025 (USD) | June 30, 2024 (USD) | | :---------------------------------- | :------------- | :------------ | | Accounts payable | $4,041,939 | $6,619,320 | | Accrued payroll | $1,209,350 | $13,216 | | Compensated absences | $859,540 | $668,825 | | Accrued capital expenditure | $13,504,113 | $4,318,703 | | Accrued expenses | $757,928 | $3,204,371 | | Total accounts payable and accrued expenses | $20,372,870 | $14,832,599 | Note 6 – Asset Retirement Obligations Asset retirement obligations increased to $8.9 million as of March 31, 2025, driven by incurred liabilities and accretion expense, offset by FX changes Changes in Asset Retirement Obligations (9 Months Ended March 31, 2025) | Metric | Amount (USD) | | :---------------------------------- | :------------- | | Beginning asset retirement obligations | $8,140,992 | | Liabilities incurred | $476,728 | | Accretion expense | $774,431 | | Effect of changes in foreign exchange rates | $(524,203) | | Long-term asset retirement obligations | $8,867,948 | Note 7 – Stockholders' Equity Common stock outstanding increased to 14,536,774 shares due to greenshoe option exercise and 312,500 shares issued to DWE for $6.0 million - Common stock outstanding increased to 14,536,774 shares as of March 31, 2025[86] - Issued 308,750 shares under the greenshoe option in July 2024, generating $7.4 million in proceeds[86][87] - Issued 312,500 shares to DWE in November 2024, valued at $6.0 million, to satisfy the checkerboard fee obligation, following shareholder approval[86][88][89] Note 8 – Stock-Based Compensation Total stock-based compensation costs were $4.2 million for the nine months ended March 31, 2025, primarily from new RSU grants - Total stock-based compensation cost incurred for the nine months ended March 31, 2025, was $4.2 million[101] - Granted 47,400 Retention Awards RSUs and 795,000 IPO Awards RSUs on August 6, 2024, to employees[93][95] - Granted 27,281 Director RSUs on January 1, 2025, with a one-year cliff-vesting period[102] - Remaining costs to recognize for IPO Awards and Retention Awards, if all vesting conditions are met, total $13.4 million[101] Note 9 – Income Taxes The company reported nil effective tax rates due to operating losses, accumulating $322.4 million in tax losses with a full valuation allowance - Effective tax rates were nil for the three and nine months ended March 31, 2025, and 2024, due to operating losses[103] - Accumulated losses for tax purposes as of March 31, 2025, amounted to $322.4 million[103] - A full valuation allowance has been provided on net deferred tax assets[103] Note 10 – Loss Per Share Basic and diluted net loss per share for stockholders increased to $(0.458) (3 months) and $(1.864) (9 months) as of March 31, 2025 Loss Per Share | Metric | 3 Months Ended Mar 31, 2025 (USD) | 3 Months Ended Mar 31, 2024 (USD) | 9 Months Ended Mar 31, 2025 (USD) | 9 Months Ended Mar 31, 2024 (USD) | | :---------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Net loss per share, basic and diluted | $(0.458) | $(0.321) | $(1.864) | $(1.367) | | Weighted average number of common stock outstanding | 14,536,774 | 10,223,449 | 14,336,033 | 9,145,388 | Note 11 – Commitments and Contingencies Capital commitments total $100.2 million, primarily for Beetaloo Joint Venture and Sweetpea, with an A$25.0 million performance bond facility from Macquarie Bank Capital Commitments (March 31, 2025 vs June 30, 2024) | Commitment | March 31, 2025 (USD) | June 30, 2024 (USD) | | :-------------------- | :------------- | :------------ | | Sweetpea | $21,972,265 | $23,283,360 | | EP 161 | $2,500,400 | $2,649,600 | | Beetaloo Joint Venture | $70,761,319 | $62,642,340 | | Midstream (SPCF) | $4,955,806 | $1,971,843 | - Entered into a Facility Agreement with Macquarie Bank Limited for A$25.0 million in performance bonds (Facility A), with potential additional A$10.0 million (Facilities B & C)[120] - As of March 31, 2025, A$7.7 million of letters of credit were issued, and A$17.3 million of unused credit remained under Facility A[124] - Tamboran B1 Operator is required to put in place bank guarantees for the Sturt Plateau Pipeline (SPP) construction, estimated at A$10.7 million for Tamboran's share over the next three months[126] Note 12 – Related Party Transactions Ongoing related party transactions include drilling services with H&P and joint venture expenditures/cash calls with DWE/DWI - Incurred $10.2 million in costs with H&P for drilling services for the nine months ended March 31, 2025[129] - DWE's share of Beetaloo Joint Venture expenditure due was $44.8 million for the nine months ended March 31, 2025, with $5.8 million in unpaid cash calls[132] - DWI's share of SPCF expenditure due was $1.5 million for the nine months ended March 31, 2025, with $0.9 million in unpaid cash calls[133] - Issued 312,500 shares of Common Stock to DWE in satisfaction of the Group's obligation towards the Checkerboard fee[134] Note 13 – Subsequent Events Post-March 31, 2025, the company entered subscription agreements for $55 million in shares, an asset sale to DWE for $15 million, and a revised JVSA - On May 12, 2025, the Company entered into Subscription Agreements to issue approximately 3.1 million newly issued shares of common stock for an aggregate purchase price of approximately $55 million[135] - On May 12, 2025, TR West and DWE entered into an Asset Sale Agreement, whereby DWE will acquire approximately 12.5% of TR West's 77.5% interest in applicable retention licenses for $15 million[138] - On May 12, 2025, the Company and DWE signed a Second Amended and Restated Joint Venture and Shareholders Agreement to finalize the checkerboard of the joint acreage position across EPs 76, 98, and 117[140][220] - Upon completion of the checkerboard and sale to DWE, the Company will have retained approximately 1.9 million net prospective, development-ready acres across the Beetaloo Basin[220] Cautionary Note Regarding Forward-looking statements This section contains forward-looking statements based on current beliefs, with actual results potentially differing due to development stage, capital needs, and operational risks - Forward-looking statements are based on current beliefs, expectations, and assumptions, not historical facts or assurances of future performance[144] - Future financial performance may differ from expectations due to factors such as the company's early stage of development, substantial additional capital requirements, and speculative nature of drilling activities[145] - The company does not assume any obligation to update or supplement any forward-looking statements, except as required by law[146] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses financial condition and operations, noting increased net losses from higher operating expenses and a significant decrease in cash and cash equivalents Results of Operations for the Three Months Ended March 31, 2025 and 2024 - Net loss increased to $(8.2) million for the three months ended March 31, 2025, from $(2.6) million in the prior year[149] - Compensation and benefits, including stock-based compensation, increased by $0.5 million due to restricted stock units and increased headcount[151] - LNG feasibility study expense was $2.0 million for the three months ended March 31, 2025, with no comparable expense in the prior period[154] - Foreign currency translation resulted in a $1.5 million gain for the three months ended March 31, 2025, compared to a $12.2 million loss in the prior year, primarily due to the strengthening of the Australian Dollar[157] Result of Operations for the Nine Months Ended March 31, 2025 and 2024 - Net loss increased to $(30.4) million for the nine months ended March 31, 2025, from $(13.9) million in the prior year[149] - Compensation and benefits, including stock-based compensation, increased by $2.6 million due to restricted stock units and increased headcount[160] - LNG feasibility study expense was $5.2 million for the nine months ended March 31, 2025, with no comparable expense in the prior period[165] - Incurred a $6.0 million checkerboard fee related to the satisfaction of payment obligations to DWE[166] - Foreign currency translation resulted in a $15.5 million loss for the nine months ended March 31, 2025, compared to a $3.9 million loss in the prior year, primarily due to the weakening of the Australian Dollar[169] [Liquidity and Capital Resources](