Texas oil man Bryan Sheffield takes $20m stake in Beetaloo gas junior Tamboran Resources
One of the big winners in the US shale revolution – Texas oil man Bryan Sheffield – hopes to replicate that success in Australia, picking up a major stake in Tamboran Resources.
One of the big winners in the US shale revolution – third-generation Texas oil man Bryan Sheffield – hopes to replicate that success in Australia, picking up a major stake in Beetaloo Basin-focused Tamboran Resources.
Mr Sheffield, who turned 109-year-old oil wells owned by his grandfather Joe Parsley into breakthrough shale oil company Parsley Energy, has tipped $20m into Tamboran at 37c a share as part of an overall placement of $35m.
Tamboran managing director Joel Riddle said it was Mr Sheffield’s first investment into the Australian energy sector, and a vote of confidence in the company’s bid to source low-carbon dioxide gas from the Northern Territory basin.
The new capital raising, which will be announced to the ASX on Tuesday, brings the amount of money raised by the gas junior, which only listed in July, to $114m this calendar year.
Mr Riddle said the funds would be used to accelerate the commercialisation of its wholly owned EP 136 project, which is adjacent to its EP 161 joint venture with Santos.
Tamboran is waiting on flow test results for two horizontal wells at EP 161, which is 75 per cent owned by Santos, and has said previously that the T2H well, which was completed during the first quarter, “encountered significant gas shows and pressures that are typically strong indicators of commercial flow rates”.
Mr Riddle said results from EP 161 were due in coming weeks and could “significantly de-risk” its wholly-owned project.
“We were pretty explicit around our ambitions to accelerate drilling and commercialisation into the Beetaloo with our EP 136 block,’’ he said. “What’s really exciting is that the wells we are drilling with Santos right now are directly adjacent to EP 136, so the results that we’ll see in those two wells will have the potential to significantly de-risk that 100 per cent acreage.’’
Mr Riddle said the new capital would allow Tamboran to “get aggressive on 136 next year’’.
“We have ambitions to bring the initial pilot development from the Beetaloo out of 136. It’s exciting times,’’ he said.
Mr Riddle said Mr Sheffield, who would emerge with a 7.5 per cent stake in the company following his investment, had been “following the story for quite some time’’.
“Our chairman is a fellow called Dick Stoneburner, who was key to unlocking the Eagle Ford shale there in Texas with Petrohawk,’’ Mr Riddle said.
“What you find is that these guys work in close circles in Texas … there was a connection there between our chairman and Bryan.’’
Bryan’s father, Scott Sheffield, also previously sat on the board of Santos.
“He was aware of the Beetaloo from Santos’s holding. It’s a small world when it comes to shale,’’ Mr Riddle said. “And the Beetaloo is pretty well regarded by those in the business as the next big thing.’’
Mr Riddle said the fact that Beetaloo gas had a low carbon dioxide content made it attractive to investors.
“Not all gas is created equal,’’ Mr Riddle said.
“You have very high CO2 gas that has been developed or is in the process of being developed, then you have the low-CO2 resources in the Beetaloo, which I think will take priority as the world moves to consuming cleaner forms of energy.
“Eventually what I see happening is with carbon capture and even if you have to purchase offsets, if you’re starting at a low CO2 level it makes developing the gas resource more amenable as it relates to development costs.
“It makes the Beetaloo gas very attractive to investors because of the ability to get through the screen which I think all investors will be looking for as being, ‘How are you going to get to get to net zero?’’’
Mr Sheffield’s Parsley Energy was acquired by Pioneer Natural Resources, which is headed by Bryan’s father Scott, in January 2021 for $US7.3bn ($10.1bn).
Mr Sheffield said: “The Beetaloo Sub-Basin has a number of the key elements of a world-class shale play. The Mid-Velkerri shale has a large aerial extent, ample thickness and great rock quality. I am excited to be part of the Tamboran story,’’ he said.
Tamboran shares last changed hands for 38.5c, valuing the company at $251m.
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