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,
2025. 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,
2025, 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 March 31, Nine months ended March 31,
2026 2025 2026 2025
Revenue and other operating income $— $— $— $—
Operating costs and expenses:
Compensation and benefits, including stock-based compensation (3,638) (2,430) (8,953) (6,332)
Consultancy, legal and professional fees (1,562) (1,420) (4,295) (4,104)
Depreciation and amortization (2) (23) (5) (85)
Loss on remeasurement of assets classified as held for sale — — — (376)
Accretion of asset retirement obligations (327) (275) (908) (774)
Exploration expense (670) (1,201) (1,778) (3,684)
Camp (expense) recoveries, net (626) — (3,280) —
LNG feasibility study expense (31) (1,978) (357) (5,211)
Checkerboard fee — — — (5,950)
General and administrative (1,516) (1,474) (4,803) (4,278)
Total operating costs and expenses (8,372) (8,801) (24,379) (30,794)
Other income (expense):
Interest income (expense), net 658 51 591 1,553
Foreign exchange gain (loss), net (2,901) 142 (3,444) (1,340)
Other income (expense), net — 435 — 153
Total other income (expense) (2,243) 628 (2,853) 366
Net loss (10,615) (8,173) (27,232) (30,428)
Foreign currency translation 15,536 1,477 24,030 (15,532)
Total comprehensive income (loss) attributable to noncontrolling interest 987 (943) 38 (5,735)
Total comprehensive income (loss) attributable to Tamboran Resources stockholders $3,934 $(5,753) $(3,240) $(40,225)
Certain amounts in the Group's consolidated financial statements may not add up or recalculate due to rounding.
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Results of Operations for the Three Months Ended March 31, 2026 and 2025
Revenue and other operating income. We have not yet commenced natural gas production; therefore, we did not earn
any revenue and other operating income during the three months ended March 31, 2026 and 2025, respectively.
Compensation and benefits, including stock-based compensation. Compensation and benefits, including stock-based
compensation, increased by $1.2 million during the three months ended March 31, 2026, as compared to the three months
ended March 31, 2025, largely due to increased headcount in relation to the comparative quarter, compensation awarded to
the new CEO during the quarter, and the payout of bonuses during the quarter for the 2025 calendar year at a higher payout
percentage than that accrued in the same quarter of fiscal year 2025.
Consultancy, legal and professional fees. Consultancy, legal and professional fees remained fairly consistent period-
over-period.
Accretion of asset retirement obligations expense. For the three months ended March 31, 2026, an expense for
accretion of asset retirement obligations of $0.3 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. The incremental expense period over period is driven by the three wells drilled in Q1 which
had a full quarter of accretion in the current period.
Exploration expense. For the three months ended March 31, 2026, the exploration expense decreased by $0.5 million
as compared to the three months ended March 31, 2025 as the prior period had increased activity for topographical,
geographical and geophysical studies and other indirect expenditures while the current period focused on the flow test for
SS-6H and preparation of the stimulation programs of SS-3H, SS-4H, and SS-5H, the costs of which are capitalized.
Camp expense recoveries, net. For the three months ended March 31, 2026, expenses for the field camp of $0.6
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.
LNG feasibility study expense. During the three months ended March 31, 2026, expenses related to certain studies
and pre-front-end engineering and design services related to the proposed NT LNG facility were de minimis as these
studies were substantially completed in prior periods.
General and administrative. General and administrative costs during the three months ended March 31, 2026, as
compared to the three months ended March 31, 2025 were fairly consistent period-over-period.
Interest income (expense), net. Interest income, net increased by $0.6 million during the three months ended
March 31, 2026, as compared to the three months ended March 31, 2025, primarily due to interest received on deposits in
connection with our PIPE proceeds that occurred during the period ended March 31, 2026 which did not exist in the
comparative period.
Foreign currency translation. For the three months ended March 31, 2026, we recognized a foreign currency
translation gain of $15.5 million, primarily due to the significant strengthening of the Australian Dollar as of March 31,
2026, as compared to December 31, 2025. In the three months ended March 31, 2025, we recognized a foreign currency
translation gain of $1.5 million, primarily due to the strengthening of the Australian Dollar as of March 31, 2025, as
compared to December 31, 2024. 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
March 31, 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 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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Results of Operations for the Nine Months Ended March 31, 2026 and 2025
Revenue and other operating income. We have not yet commenced natural gas production; therefore, we did not earn
any revenue and other operating income during the nine months ended March 31, 2026 and 2025, respectively.
Compensation and benefits, including stock-based compensation. Compensation and benefits, including stock-based
compensation, increased by $2.6 million during the nine months ended March 31, 2026, as compared to the nine months
ended March 31, 2025, largely due to increased headcount in relation to the comparative period, the transition to a calendar
year employee bonus schedule, and compensation awarded to the interim and new CEO.
Consultancy, legal and professional fees. Consultancy, legal and professional fees remained fairly consistent period-
over-period.
Accretion of asset retirement obligations expense. For the nine months ended March 31, 2026, an expense for
accretion of asset retirement obligations of $0.9 million was recognized. The recognition of such an expense was 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. The incremental expense period over period is driven by the three wells drilled in Q1 which had a full
quarter of accretion in the current period.
Exploration expense. For the nine months ended March 31, 2026, the exploration expense decreased by $1.9 million
as compared to the nine months ended March 31, 2025 as the current period was heavily focused on the drilling of SS-4H,
SS-5H, and SS-6H, resulting in a larger portion of costs capitalized and less costs incurred related to topographical,
geographical and geophysical studies.
Camp expense recoveries, net. For the nine months ended March 31, 2026, expenses for the field camp of $3.3
million were recognized primarily related to mobilization expenses of the modular buildings and related equipment to the
site, camp utilization, camp services, and related consumables. These costs are offset by recoveries from external parties
who utilize the camp.
LNG feasibility study expense. During the nine months ended March 31, 2026, the Group incurred expenses of $0.4
million related to certain studies and pre-front-end engineering and design services related to the proposed NT LNG
facility. These studies were substantially completed in the prior period.
Checkerboard fee. During the six months ended December 31, 2024, the Group incurred an expense of $6.0 million
related to the satisfaction of certain payment obligations to DWE under the TB1 JVSA. This obligation was satisfied
through the issuance of common stock, subsequent to shareholder approval received in November 2024 and is a
nonrecurring event.
General and administrative. General and administrative costs increased by $0.5 million during the nine months ended
March 31, 2026, as compared to the nine months ended March 31, 2025, primarily as a result of increased expenses related
to headcount.
Interest income (expense), net. Interest income, net decreased by $1.0 million during the nine months ended
March 31, 2026, as compared to the nine months ended March 31, 2025, primarily due to the increase in interest expense
on increased drawdowns for bank guarantees under the Facility Agreement with Macquarie Bank Limited entered into in
December 2024.
Foreign currency translation. For the nine months ended March 31, 2026, we recognized a foreign currency
translation gain of $24.0 million, primarily due to the significant strengthening of the Australian Dollar as of March 31,
2026, as compared to June 30, 2025. In the nine months ended March 31, 2025, we recognized a foreign currency
translation loss of $15.5 million, primarily due to the significant weakening of the Australian Dollar as of March 31, 2025,
as compared to June 30, 2024. 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 nine months ended
March 31, 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
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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 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 commencement of substantial
production from our natural gas properties. We do not expect to generate any revenue from production until the second half
of calendar year 2026, at the earliest, which will depend upon successful drilling results, additional and timely capital
funding, negotiation of certain commercial agreements 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 and testing program;
•develop and commercialize our assets, including the SPCF, 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, 2026, we estimate that we will need to invest approximately
$30.2 million to progress our development plans. We expect the proceeds from the public offering during the current fiscal
period and equity raised in April 2026, together with our existing cash on hand, to be sufficient to fund remaining
stimulation costs of SS-4H, SS-5H and SS-6H and committed SPCF construction costs. However, we may require
significant additional funds after June 30, 2026, 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).
March 31,2026 June 30,2025
Cash and cash equivalents $88,151 $39,439
As of March 31, 2026, we had $88.2 million of cash and cash equivalents. This balance represents an increase of
$48.7 million from June 30, 2025. Cash calls received, proceeds from our subscription agreements to institutional investors
and Share Purchase Plan, proceeds from the Syndicated Facility during the period were primarily offset by spending from
operations on the SS-4H, SS-5H and SS-6H 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:
March 31,2026 June 30,2025
Capital commitments:
Sweetpea $23,926 $23,115
EP 161 5,998 2,302
Beetaloo Joint Venture 65,286 75,630
Midstream $8,489 $9,056
Sweetpea
Sweetpea’s committed spend as of March 31, 2026, was $23.9 million, which was related to two licenses, EP 136
with total commitments of $14.4 million and EP 143 with total commitments of $9.5 million.
A variation 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. This application remains under
review. As such, the Group maintains a minimum work program commitment of $14.4 million.
An application for EP 143 was submitted to DME in March 2026 requesting a variation of the minimum work
program for years 3, 4 and 5 and extension of the term to December 31, 2029. 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, for a period of 12 months to March 2027. Our commitment through
March 2027 is expected to be $6.0 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. This program remains under review. The terms of the Beetaloo Joint Venture continue to necessitate specific
minimum work obligations through May 2028. These commitments include an expected spend of $65.3 million related to
drilling and multi-stage hydraulic fracturing of four wells, 3D seismic survey, and subsurface studies, with expenditure
across EP 76 of $11.0 million, EP 98 of $42.3 million and EP 117 of $12.0 million.
Midstream
Committed spend remaining for the SPCF project as of March 31, 2026, was $8.5 million which was related to the
remaining procurement, and construction management for the detailed design, engineering, planning, 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 is subject,
among other conditions, to the Company raising additional capital in the amounts of at least A$62.5 million and A$75.0
million, respectively. All Facilities terminate on December 19, 2027. The obligations under the Facility Agreement are
unconditionally guaranteed on a senior secured basis by TR Ltd.
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As of March 31, 2026, there was A$32.2 million of letters of credits issued under the Facility Agreement. As of
March 31, 2026 there was A$1.7 million of unused credit under Facility A and A$1.1 million of unused credit under
Facility B and Facility C.
Cash Flows
The following table summarizes our cash flows for the periods indicated (in thousands):
Nine months ended March 31,
2026 2025
Statement of Cash Flows:
Net cash used in operating activities $(27,037) $(23,205)
Net cash used in investing activities (112,793) (73,681)
Net cash from financing activities $194,048 $48,344
Net Cash Used in Operating Activities
For the nine months ended March 31, 2026, net cash used in operating activities was $27.0 million during which we
incurred a net loss of $27.2 million compared to net cash used in operating activities for the nine months ended March 31,
2025 of $23.2 million, during which we incurred a net loss of $30.4 million. The net loss for the nine months ended
March 31, 2026, included the non-cash impacts of depreciation and amortization, stock-based compensation, performance
bond facility fees, accretion of asset retirement obligations, interest expense, and foreign exchange differences.
Additionally, in the nine months ended March 31, 2026, net unfavorable changes in operating assets and liabilities totaled
$8.6 million, primarily consisting of a $4.2 million decrease in accounts payable and accrued expenses due to timing of our
pay cycle during the fiscal period, a $3.6 million increase in trade and other receivables and a $1.5 million increase in
prepaid expenses and other assets.
Net Cash Used in Investing Activities
For the nine months ended March 31, 2026, net cash used in investing activities was $112.8 million compared to
$73.7 million for the nine months ended March 31, 2025. In the period ended March 31, 2026, there was spend on
exploration and evaluation activities of $79.7 million in connection with the drilling of the SS-4H, SS-5H and SS-6H pilot
wells, expenditure of $24.4 million of spend related to SPCF, $3.0 million incurred in connection with the proposed Falcon
Acquisition, $2.6 million related to interest on financing lease liabilities and $2.9 million related to interest on borrowings
under our SPCF Syndicated Facility Agreement.
Net Cash from Financing Activities
For the nine months ended March 31, 2026, net cash received from financing activities was $194.0 million compared
to $48.3 million received for the nine months ended March 31, 2025. The increase was primarily due to proceeds from the
issuance of common stock of $110.4 million that occurred in the current fiscal period compared to $7.4 million in gross
proceeds from the greenshoe option exercised in July 2024, $44.0 million of proceeds from the Syndicated Facility, $55.4
million attributable to contributions from noncontrolling interest holders to fund their share of cash calls compared to $48.5
million in the prior period, partially offset by common stock issuance transaction costs of $5.2 million, payment of debt
issuance costs of $3.3 million, repayments of finance lease liabilities of $6.9 million and $0.3 million related to the
payment of performance bond facility establishment fees.
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.
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.
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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 March 31, 2026 from those described in the Group’s Annual Report on Form 10-K for the year ended June 30,
2025.
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