Tamboran Resources Ltd (OTC:TBNRF) has embarked on an equity raise that aims to secure around A$28 million.
This capital injection includes a strategic placement of A$15 million (US$10 million) from Liberty Energy, which will mark a milestone in the company’s growth trajectory.
These funds are earmarked to advance the company's Beetaloo Basin activities in Australia's Northern Territory, particularly the sanctioning of the 40 million cubic feet per day (MMcf/d) Shenandoah South Pilot Project, slated for the first half of 2024.
This includes the purchase of long lead items to maintain project timeline and Front-End Engineering and Design (FEED) activities.
The equity raise consists of a non-underwritten institutional placement and a one-for-6.2 pro-rata accelerated non-renounceable entitlement offer.
Pledge from largest shareholder
Bryan Sheffield, Tamboran's largest security holder, has pledged to participate in the entitlement offer, committing to an $8 million investment.
The offer is set at A$0.16 per new Chess Depositary Interest (CDI), a 15.8% discount to the last closing price of A$0.19 per CDI.
Tamboran will issue 452 million new CDIs, representing 26.4% of Tamboran’s existing CDIs. Post-completion, the company expects to have 2,169 million CDIs in circulation.
While this equity raise marks a significant milestone, Tamboran anticipates the need for additional capital to achieve its ambitious target of 2 billion cubic feet per day (Bcf/d) gas production in the Beetaloo Basin by 2030.
Potential future capital sources include farm-in partnerships, royalty transactions, debt financing and a potential US listing, especially after the company's re-domiciliation into the US.
A step closer
Tamboran managing director and CEO Joel Riddle said: “The capital raise takes us another step closer to the sanctioning of our proposed 40 MMcf/d Pilot Project in the Shenandoah South region.
“I believe this is a key inflection point towards the commercialisation of the Beetaloo, which has the potential to provide Territorians and Australians on the East Coast with energy security for decades to come.
“Investment in gas is expected to be required to meet our energy transition targets and investment in natural gas with low reservoir CO2, such as the Beetaloo Basin, should be developed ahead of those with higher reservoir CO2 content. This could support lower development costs as less cost is associated with injecting CO2 via carbon capture and storage or purchasing offsets.
“We are excited to be joined by Liberty, a leading oilfield services company in the United States with sophisticated and high-quality hydraulic fracturing, engineering and wireline services.
"This partnership, which follows that of Helmerich and Payne in 2022, delivers on our mission to bring US shale expertise into the Beetaloo Basin.”