Tamboran Resources Corporation (NYSE:TBN) announced September 7 that it and Daly Waters Energy, LP had begun gas sales from the Shenandoah South Pilot Project into Australia’s Northern Territory network. The deliveries mark the Beetaloo Basin’s first gas sales and move the project into revenue generation.
The Sturt Plateau Compression Facility has a capacity of approximately 48.5 million cubic feet per day. Contracted supply of approximately 38.8 million cubic feet per day is expected by early 2027 under a long-term take-or-pay agreement with the Northern Territory Government. These are gross project volumes. Commissioning gas receives a discounted price because supply remains interruptible.
Bull Case
Tamboran Resources Corporation now has a working route from wells through processing infrastructure to a customer. All five wells on the Shenandoah South 2 pad have been drilled, stimulated and connected to the facility. Initial deliveries reduce uncertainty around the physical connection between the resource and its market.
Contracted demand equals 80% of stated processing capacity, providing a substantial foundation for utilization once production reaches the target. Take-or-pay agreements generally require buyers to pay for committed volumes even if they do not take delivery, subject to contractual conditions.
The gas sales agreement specifies a fixed price with annual adjustments linked to Australia’s Consumer Price Index. That structure provides more revenue visibility than relying entirely on spot-market demand, although the price remains confidential.
For Tamboran Resources Corporation, the pilot also creates an opportunity to learn while generating sales. Longer production histories can improve estimates of well decline rates and future drilling requirements. If repeatable well performance supports lower development costs, the project could strengthen the case for financing larger developments.
Bear Case
A buyer commitment does not establish the cost of supplying that buyer. Discounted commissioning sales offer limited evidence of eventual cash margins, and the September 7 announcement did not quantify initial delivery rates or realized prices.
Tamboran Resources Corporation has previously stated that additional wells will be needed to maintain plateau production over the contract’s life. Reaching 38.8 million cubic feet per day is therefore only one test. Sustaining that output requires drilling expenditure, dependable facility uptime and consistent results across successive wells.
Financing adds another hurdle. The processing-facility funding package announced in September 2025 provided up to A$179.8 million through a four-year facility, with 30% amortization and a 70% balloon payment at maturity. That structure creates refinancing exposure if operating cash generation falls short.
Broader expansion also requires additional pipeline capacity and capital. Investors need realized selling prices alongside royalties, production expenses, processing charges, and transportation costs to assess operating profitability. Drilling and infrastructure spending then determine how much cash remains available for growth. A profitable pilot would strengthen the development case, while economics across a larger acreage position still require testing.
Hedge Fund Sentiment
The filings available so far reflect positions held before Tamboran Resources Corporation reported its first Beetaloo Basin gas sales. Insider Monkey’s database showed 19 hedge funds holding Tamboran Resources Corporation at the end of 2Q2026, up from 15 funds three months earlier.
Conclusion
Tamboran Resources Corporation has achieved a meaningful operating milestone backed by contracted demand. The next step is proving that sustained production can cover operating costs, replacement drilling, and financing obligations. Full contracted output, facility uptime, realized cash margins, and development costs will determine whether first sales become a scalable business.
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This article is originally published at Insider Monkey.
