Tamboran Resources Corp: Form 10-Q for the period ended Mar 31, 2026

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):

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).

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:

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):

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,

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Limitations on Effectiveness of Controls and Procedures

In designing and evaluating our disclosure controls and procedures, management recognizes that any controls

and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving

desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that

there are resource constraints and that management is required to apply judgment in evaluating the benefits of

possible controls and procedures relative to their costs.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our principal executive officer and principal financial officer,

evaluated, as of the end of the period covered by this Quarterly Report on Form 10-Q, the effectiveness of our

disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on

the evaluation, our principal executive officer and principal financial officer concluded that, as of March 31, 2026,

our disclosure controls and procedures as of such date were not effective at the reasonable assurance level due to the

material weakness that was disclosed in our Annual Report on Form 10-K for the years ended June 30, 2025 and

June 30, 2024.

As discussed in Part II, Item 9A, “Controls and Procedures” in our Annual Report on Form 10-K for the year

ended June 30, 2025 and June 30, 2024, we identified the following deficiencies in our internal control over

financial reporting, which in the aggregate, constituted a material weakness:

i) lack of sufficient evidence retained of the performance of internal controls,

ii) insufficient resources in key accounting and finance roles leading to inadequate segregation of duties,

iii) lack of manage access and manage change IT general controls over the cloud-based enterprise resource

planning system, and

iv) accounting for complex transactions in accordance with U.S. GAAP.

Status of Remediation Efforts

In response to the material weakness identified and described above, our management, with the oversight of

the Audit & Risk Management Committee of our Board of Directors, has begun the process of, and is committed to,

designing and implementing effective measures to strengthen our internal controls over financial reporting and

remediate the material weakness.

Our planned internal control remediation efforts, which are underway, include:

• We previously engaged a third–party consulting firm to assist with the documentation of our processes and

internal controls over financial reporting. During the third quarter of fiscal year 2026, management, with

the help of our third-party consulting firm, continued documentation of our key business and IT processes,

refining controls identified through the walkthroughs performed in the second quarter. Assessments are

currently in progress to conclude on design and operating effectiveness and determine additional actions

needed in support of remediation of this material weakness.

• We selected and implemented a new ERP System at the start of fiscal year 2025 to facilitate recording and

reporting of transactions for all entities. Management has commenced a detailed assessment of segregation

of duties across key financial and IT processes to identify areas of elevated risk, including incompatible

activities arising from resource constraints. Based on this assessment, management plans to implement

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remediation actions, including role redesign, enhanced supervisory review controls, mitigating manual

controls, and system‑based restrictions where appropriate, to strengthen segregation of duties and mitigate

the risk of error or inappropriate transactions.

• Our Vice President of Information Technology and Financial Reporting Manager, with extensive

knowledge in their respective fields, continue to implement, enhance, and formalize procedures in their

relevant areas, which will assist in the remediation of the above control deficiencies. We will continue to

assess our needs and hire accounting and finance personnel to ensure reporting requirements are met and

segregation of duties are maintained.

• We will provide training to control owners, as appropriate, in support of an effective internal control

framework, including how to sufficiently document and evidence the completeness and accuracy of the

operation of internal controls and validate appropriate assumptions (inputs) and conclusions (outputs) for

routine and non-routine transactions.

• For certain complex transactions executed during this fiscal period, we engaged technical specialists, as

appropriate, to ensure accurate accounting and the preparation of accounting memoranda. We will continue

to evaluate our practices related to significant non-recurring transactions and continue to implement

improvements in those practices, including the development of a more comprehensive review process and

monitoring controls over significant transactions.

While these actions and planned actions are subject to ongoing management evaluation and will require

validation and testing of the design and operating effectiveness of internal controls over a sustained period of

financial reporting cycles, we are committed to the continuous improvement of our internal control over financial

reporting and will continue to diligently review our internal control over financial reporting.

The material weakness cannot be considered remediated until the newly designed control activity operates for

a sufficient period of time and management has concluded, through testing, that the control is operating effectively.

While we have begun implementing a plan to remediate this material weakness, we cannot predict the success

of such plan or the outcome of our assessment of this plan at this time. If our steps are insufficient to successfully

remediate the material weakness and otherwise establish and maintain an effective system of internal control over

financial reporting, the reliability of our financial reporting, investor confidence in us, and the value of our common

stock could be materially and adversely affected. We can give no assurance that the implementation of this plan will

remediate this deficiency in internal control or that additional material weaknesses in our internal control over

financial reporting will not be identified in the future. Our failure to implement and maintain effective internal

control over financial reporting could result in errors in our financial statements that could result in a restatement of

our financial statements or cause us to fail to meet our periodic reporting obligations.

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Changes in Internal Control Over Financial Reporting

Except for the implementation of our remediation plans in connection with our ineffective disclosure controls

and procedures described above, there were no changes in the Company’s internal control over financial reporting

(as defined in Rule 13a-15(f) and Rule 15d-15(f) under the Exchange Act) during the quarter ended March 31, 2026

that have materially affected, or are reasonably likely to materially affect, our internal control over financial

reporting.

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There are numerous factors that affect our business and operating results, many of which are beyond our control.

Except as provided below, there have been no material changes in risk factors for the quarterly period ended March 31,

2026 from those described in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2025.

Risks Related to the Pending Falcon Acquisition

Tamboran stockholders and Falcon shareholders, in each case as of immediately prior to the Falcon Acquisition, will

have significantly reduced ownership in the combined company.

Tamboran anticipates issuing 6,537,503 shares of Tamboran common stock to Falcon in exchange for Falcon’s

equity interests in the Falcon Entities. Based on 28,318,909 shares of common stock issued and outstanding as of May 1,

2026, following the completion of the Falcon Acquisition, it is anticipated that persons who were stockholders and

shareholders of Tamboran and Falcon, respectively, immediately prior to the Falcon Acquisition will own approximately

81.2% and 18.8% of the combined company, respectively, with Tamboran maintaining control over the combined

company. As a result, Tamboran’s current stockholders and Falcon’s current shareholders will have less influence on the

policies of the combined company than they currently have on Tamboran’s policies and Falcon’s policies, respectively.

The Falcon Parent stock consideration will not be adjusted in the event of any change in either Tamboran’s or Falcon’s

share price.

Upon completion of the Falcon Acquisition, Falcon’s shareholders will receive 6,537,503 shares of Tamboran

common stock. The Falcon Parent stock consideration was generally fixed in the Arrangement Agreement and will not be

adjusted to reflect changes in the market price of either Falcon common shares or Tamboran common stock before the

arrangement is completed. Stock price changes may result from a variety of factors (many of which are beyond

Tamboran’s and Falcon’s control), including the following:

• changes in Tamboran’s and Falcon’s respective businesses, operations and prospects;
• investor behavior and strategies, including market assessments of the likelihood that the arrangement will be

completed, including related considerations regarding court approval and regulatory clearance or approval, if any,

of the arrangement; or

• interest rates, general market and economic conditions and other factors generally affecting the price of

Tamboran’s and Falcon’s shares; and

• foreign, federal, state, provincial and local legislation, governmental regulation and legal developments in the

businesses in which Tamboran and Falcon operate.

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The price of Tamboran common stock at the completion of the Falcon Acquisition will vary from its price on the

date the Arrangement Agreement was executed, the date of this proxy statement, the date of the special meeting and the

effective date. As a result, the market value represented by the number of shares issued to Falcon will also vary. For

example, based on the range of closing prices of Tamboran common stock during the period from September 29, 2025, the

trading day before the date of the public announcement of the Falcon Acquisition, through April 30, 2026, the total Falcon

Parent stock consideration represented a market value ranging from a low of $147,747,567.80 to a high of

$326,787,279.47.

The arrangement is subject to a number of conditions which may delay the Falcon Acquisition and could result in

additional expenditures of money and resources or reduce the anticipated benefits, or result in termination of the

Arrangement Agreement and Tamboran having to pay a termination fee.

Tamboran’s and Falcon’s respective obligations to consummate the Falcon Acquisition are subject to the satisfaction

(or waiver by all parties, to the extent permissible under applicable laws) of a number of conditions described in the

Arrangement Agreement. Some of the conditions to completion of the arrangement are not within Tamboran’s control and

Tamboran cannot predict when, or if, these conditions will be satisfied. If any of these conditions are not satisfied or

waived prior to the termination date, it is possible that the Arrangement Agreement may be terminated. The Arrangement

Agreement provides that, upon termination of the Arrangement Agreement under certain circumstances, Tamboran or

Falcon would be required to pay the other party a termination fee of $3.75 million and $1.62 million, respectively. In

addition, Falcon would be required to reimburse Tamboran for its documented out-of-pocket expenses incurred in

connection with the arrangement under certain circumstances.

Although the parties have agreed to use reasonable best efforts, subject to certain limitations, to complete the

arrangement promptly, these and other conditions may fail to be satisfied. In addition, completion of the arrangement may

take longer and could cost more than we expect. Any delay in completing the Falcon Acquisition may adversely affect the

benefits that Tamboran expects to achieve if the Falcon Acquisition and the integration of businesses were to be completed

within the expected timeframe.

If a governmental authority asserts objections to the Falcon Acquisition, Tamboran may be unable to complete the

Falcon Acquisition or, in order to do so, Tamboran or Falcon may be required to comply with material restrictions or

satisfy material conditions.

Closing is subject to the condition that there is no order preventing the consummation of the Falcon Acquisition and

no law applicable to the Falcon Acquisition that makes consummation of the Falcon Acquisition illegal. Pursuant to the

Arrangement Agreement, Tamboran and Falcon have agreed to use reasonable best efforts, subject to certain limitations, to

complete the Falcon Acquisition promptly.

There can be no assurance as to the cost, scope or impact of the actions that may be required to address any

governmental authority objections to the Falcon Acquisition. If Tamboran or Falcon takes such actions, it may be

detrimental to them or to the combined company following the consummation of the Falcon Acquisition. Furthermore,

these actions may have the effect of delaying or preventing consummation of the Falcon Acquisition or imposing additional

costs on or limiting the revenue or cash available for distribution of the combined company following the consummation of

the Falcon Acquisition. There are also limitations in the Arrangement Agreement on the actions Tamboran is required to

take in order to address any governmental authority objections to the Falcon Acquisition; so, depending on the nature of the

governmental authority objections to the Falcon Acquisition, Tamboran may decline to agree to take such actions resulting

in the failure of the Falcon Acquisition to be completed.

Tamboran or Falcon may waive one or more of the closing conditions without re-soliciting approval by Tamboran

stockholders.

Tamboran or Falcon may determine to waive, in whole or part, one or more of the conditions to closing prior to

Tamboran or Falcon, as the case may be, being obligated to consummate the Falcon Acquisition. Tamboran expects to

evaluate the materiality of any proposed waiver and its effect on Tamboran stockholders in light of the facts and

circumstances at the time, to determine whether any amendment of this proxy statement or any re-solicitation of proxies is

required in light of such waiver. Any determination whether to waive any condition to closing or to re-solicit stockholder

approval or amending or supplementing this proxy statement as a result of a waiver will be made by Tamboran at the time

of such waiver based on the facts and circumstances as they exist at that time.

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The business relationships of Tamboran and Falcon, as applicable, may be subject to disruption due to uncertainty

associated with the Falcon Acquisition, which could have a material adverse effect on the results of operations, cash

flows and financial position of Tamboran pending and following the Falcon Acquisition.

Parties with which Tamboran and Falcon, as applicable, does business may experience uncertainty associated with

the Falcon Acquisition, including with respect to current or future business relationships with Tamboran following the

Falcon Acquisition. Tamboran’s and Falcon’s business relationships may be subject to disruption as joint venture partners

and other business partners may attempt to delay or defer entering into new business relationships, negotiate changes in

existing business relationships or consider entering into business relationships with parties other than Tamboran or Falcon,

as applicable, following the Falcon Acquisition. These disruptions could have a material and adverse effect on the results of

operations, cash flows and financial position of Tamboran, regardless of whether the Falcon Acquisition is completed, as

well as a material and adverse effect on Tamboran’s ability to realize the expected benefits of the Falcon Acquisition. The

risk, and adverse effect, of any disruption could be exacerbated by a delay in completion of the Falcon Acquisition or

termination of the Arrangement Agreement.

The Arrangement Agreement subjects Tamboran to restrictions on its business activities prior to the Closing, limits its

ability to pursue alternatives to the Falcon Acquisition and may discourage other companies from making a favorable

alternative transaction proposal.

The Arrangement Agreement subjects Tamboran to restrictions on its business activities prior to the Closing. The

Arrangement Agreement obligates Tamboran to generally conduct its businesses in the ordinary course until the Closing

and to, among other things, use its reasonable best efforts to (i) preserve substantially intact its present business

organization, goodwill and assets, (ii) keep available the services of its current officers and employees and (iii) preserve its

existing relationships with governmental entities and others having significant business dealings with Tamboran. These

restrictions could prevent Tamboran from pursuing certain business opportunities that arise prior to the Closing and are

outside the ordinary course of business.

Tamboran is subject to customary restrictions on its ability to solicit alternative acquisition proposals and to provide

information to, or engage in discussions with, third parties regarding such proposals, except that Tamboran is permitted in

limited circumstances prior to receiving approval from Tamboran stockholders of the issuance of new shares of Tamboran

common stock to Falcon in the Falcon Acquisition to provide information to, and engage in discussions with, a party which

has made an unsolicited acquisition proposal that the Tamboran board of directors has determined constitutes or would

reasonably be expected to constitute a superior proposal. Furthermore, in limited circumstances prior to receiving

stockholder approval, the Tamboran board of directors may effect a change of its recommendation in response to an

applicable intervening event if the Tamboran board of directors determines in good faith that a failure to effect a change in

recommendation would be reasonably likely to be inconsistent with the Tamboran board of director’s fiduciary duties.

Tamboran does not currently control the Falcon Entities.

Tamboran will not control the Falcon Entities until completion of the Falcon Acquisition and the business and results

of operations of the Falcon Entities may be adversely affected by events that are outside of Tamboran’s control during the

intervening period. The performance of the Falcon Entities may be influenced by, among other factors, economic

downturns, changes in commodity prices, political instability in the countries in which the Falcon Entities operate, changes

in applicable laws, expropriation, increased environmental regulation, volatility in the financial markets, unfavorable

regulatory decisions, litigation, rising costs, civic and labor unrest, disagreements with joint venture partners, delays in

ongoing exploration and development projects and other factors beyond Tamboran’s control. As a result of any one or

more of these factors, among others, the operations and financial performance of the Falcon Entities may be negatively

affected, which may adversely affect the future financial results of the combined company.

Failure to complete the Falcon Acquisition could negatively impact Tamboran's stock price and have a material adverse

effect on its results of operations, cash flows and financial position.

If the Falcon Acquisition is not completed for any reason, the ongoing businesses of Tamboran may be materially

adversely affected and, without realizing any of the benefits of having completed the Falcon Acquisition, Tamboran would

be subject to a number of risks, including the following:

• Tamboran may experience negative reactions from the financial markets, including negative impacts on our stock

price;

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• Tamboran and its subsidiaries may experience negative reactions from their joint venture partners and other

business partners;

• Tamboran will still be required to pay certain significant costs relating to the Falcon Acquisition, such as legal,

accounting, financial advisor and printing fees;

• Tamboran may be required to pay a termination fee as required by the Arrangement Agreement;
• the Arrangement Agreement places certain restrictions on the conduct of Tamboran’s business prior to the

completion of the Arrangement Agreement, which may delay or prevent Tamboran from undertaking business

opportunities that, absent the Arrangement Agreement, may have been pursued;

• matters relating to the Falcon Acquisition (including integration planning) require substantial commitments of

time and resources by Tamboran's management, which may have resulted in the distraction of Tamboran's

management from ongoing business operations and pursuing other opportunities that could have been beneficial to

the companies; and

• litigation related to any failure to complete the Falcon Acquisition or related to any enforcement proceeding

commenced against Tamboran to perform its obligations pursuant to the Arrangement Agreement.

If the Falcon Acquisition is not completed, the risks described above may materialize and they may have a material

adverse effect on Tamboran's results of operations, cash flows, financial position and stock price.

Tamboran and Falcon are expected to incur significant transaction costs in connection with the Falcon Acquisition,

which may be in excess of those anticipated by them.

Tamboran and Falcon have incurred and are expected to continue to incur a number of non-recurring costs associated

with negotiating and completing the Falcon Acquisition and combining the operations of the two companies. These costs

have been, and will continue to be, substantial and, in many cases, will be borne by Tamboran whether or not the Falcon

Acquisition is completed. A substantial majority of non-recurring expenses will consist of transaction costs and include,

among others, fees paid to legal, accounting and other advisors, employee retention, severance and benefit costs, and filing

fees. Tamboran will also incur costs related to formulating and implementing integration plans, including facilities and

systems consolidation costs and other employment-related costs. Tamboran and Falcon will continue to assess the

magnitude of these costs, and additional unanticipated costs may be incurred in connection with the Falcon Acquisition and

the integration of the two companies’ businesses. While Tamboran and Falcon have assumed that a certain level of

expenses would be incurred, there are many factors beyond their control that could affect the total amount or the timing of

the expenses. The elimination of duplicative costs, as well as the realization of other efficiencies related to the integration

of the businesses, may not offset integration-related costs and achieve a net benefit in the near term, or at all. The costs

described above and any unanticipated costs and expenses, many of which will be borne by Tamboran even if the Falcon

Acquisition is not completed, could have an adverse effect on Tamboran’s financial condition and operating results.

Litigation relating to the Falcon Acquisition could result in an injunction preventing the completion of the Falcon

Acquisition and/or substantial costs to Tamboran and Falcon.

Securities class action lawsuits and derivative lawsuits are often brought against public companies that have entered

into acquisitions, mergers or other business combination agreements. Even if such a lawsuit is without merit, defending

against these claims can result in substantial costs and divert management time and resources. An adverse judgment could

result in monetary damages, which could have a negative impact on Tamboran’s and Falcon’s respective liquidity and

financial condition.

Lawsuits may be brought against Tamboran, Falcon or their respective directors which could seek, among other

things, injunctive relief or other equitable relief, including a request to rescind parts of the Arrangement Agreement already

implemented and to otherwise enjoin the parties from consummating the Falcon Acquisition. One of the conditions to the

Closing is that no injunction by any court or other tribunal of competent jurisdiction has been entered and continues to be

in effect and no law has been adopted or is effective, in either case that prohibits or makes illegal the Closing.

Consequently, if a plaintiff is successful in obtaining an injunction prohibiting completion of the Falcon Acquisition, that

injunction may delay or prevent the Falcon Acquisition from being completed within the expected timeframe or at all,

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which may adversely affect Tamboran’s and Falcon’s respective business, financial position, results of operations and cash

flows.

There can be no assurance that any of the defendants will be successful in the outcome of any pending or any

potential future lawsuits. The defense or settlement of any lawsuit or claim that remains unresolved at the time the Falcon

Acquisition is completed may adversely affect Tamboran’s or Falcon’s respective business, financial condition, results of

operations and cash flows.

Falcon may have liabilities that are not known to Tamboran.

Falcon may have liabilities that Tamboran failed, or was unable, to discover in the course of performing its due

diligence investigations. Other than publicly available information, all historical information relating to Falcon and its

subsidiaries has been provided in exclusive reliance on the information made available to us by Falcon and its

representatives. Through the completion of the Falcon Acquisition, Falcon continues to be obligated to file certain reports

with the TSXV and AIM. Additionally, pursuant to the Arrangement Agreement, during the period from the date of the

Arrangement Agreement until the earlier of the effective time and the termination thereof, Falcon is required to notify us in

writing of any material change in the business, operations, results of operations, properties, assets, liabilities (whether

absolute, accrued, contingent or otherwise), or financial condition of it and its subsidiaries on a consolidated basis or any

change in any representation or warranty it has provided in the Arrangement Agreement that may render any representation

or warranty misleading or untrue in any material respect. Tamboran may learn additional information about the other party

that materially adversely affects it, such as unknown or contingent liabilities and liabilities related to compliance with

applicable laws. As a result of these factors, the combined company may incur additional costs and expenses and may be

forced to later write-down or write-off assets, restructure operations or incur impairment or other charges that could result

in the combined company reporting losses. Even if Tamboran’s due diligence has identified certain risks, unexpected risks

may arise and previously known risks may materialize in a manner not consistent with its preliminary risk analysis. If any

of these risks materialize, this could have a material adverse effect on the combined company’s financial condition and

results of operations and could contribute to negative market perceptions about Tamboran common stock.

Potential payments to Falcon shareholders who exercise dissent rights could have an adverse effect on the combined

company’s financial condition.

Falcon shareholders have the right to exercise dissent rights and demand payment equal to the fair value of their

Falcon common shares and certain Falcon shareholders have exercised such rights. If dissent rights are properly exercised

in respect of a significant number of Falcon common shares, a substantial payment may be required to be made to such

Falcon shareholders, which could have an adverse effect on the combined company’s financial condition and cash flows.

Risk Factors Relating to the Combined Company Following the Arrangement

The combined company may be unable to integrate the businesses of Tamboran and the Falcon Entities successfully or

realize the anticipated benefits of the Falcon Acquisition.

The Falcon Acquisition involves the combination of an independent public company with the subsidiaries of another

independent public company. The combination of independent businesses is complex, costly and time consuming, and each

of Tamboran and Falcon will be required to devote significant management attention and resources to integrating the

business practices and operations of the Falcon Entities into Tamboran. Potential difficulties that Tamboran and Falcon

may encounter as part of the integration process include the following:

• the inability to successfully combine the business of Tamboran and the Falcon Entities in a manner that permits

the combined company to achieve, on a timely basis, or at all, the enhanced revenue opportunities and cost

savings and other benefits anticipated to result from the Falcon Acquisition;

• complexities associated with managing the combined businesses, including difficulty addressing possible

differences in operational philosophies and the challenge of integrating complex systems, technology, networks

and other assets of each of the companies in a seamless manner that minimizes any adverse impact on customers,

suppliers, employees and other constituencies;

• the assumption of contractual obligations with less favorable or more restrictive terms; and

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• potential unknown liabilities and unforeseen increased expenses or delays associated with the Falcon Acquisition.

In addition, Tamboran and Falcon have operated and, until the completion of the Falcon Acquisition, will continue to

operate, independently. It is possible that the integration process could result in:

• diversion of the attention of each company’s management; and
• the disruption of, or the loss of momentum in, each company’s ongoing businesses or inconsistencies in standards,

controls, procedures and policies.

Any of these issues could adversely affect each company’s ability to maintain relationships with customers, suppliers,

employees and other constituencies or achieve the anticipated benefits of the Falcon Acquisition or could reduce each

company’s earnings or otherwise adversely affect the business and financial results of the combined company following

the Falcon Acquisition.

The trading price and volume of the combined company common stock may be volatile following the Falcon

Acquisition.

The trading price and volume of the combined company common stock may be volatile following completion of the

Falcon Acquisition. The stock markets in general have experienced extreme volatility that has often been unrelated to the

operating performance of particular companies. These broad market fluctuations may adversely affect the trading price of

the combined company common stock. As a result, you may suffer a loss on your investment. Many factors may impair the

market for the combined company common stock and the ability of investors to sell shares at an attractive price, and could

also cause the market price and demand for the combined company common stock to fluctuate substantially, which may

negatively affect the price and liquidity of the combined company common stock. Many of these factors and conditions are

beyond the control of the combined company or the combined company stockholders.

The market price of Tamboran common stock may decline if large amounts of Tamboran common stock are sold

following the Falcon Acquisition and may be affected by factors different from those that historically have affected or

currently affect the market price of Tamboran common stock.

The market price of Tamboran common stock may fluctuate significantly following completion of the Falcon

Acquisition and holders of Tamboran common stock could lose some or all of the value of their investment. If the Falcon

Acquisition is consummated, Tamboran will issue shares of Tamboran common stock to former Falcon shareholders. The

Arrangement Agreement contains no restrictions on the ability of former Falcon shareholders to sell or otherwise dispose

of such shares following completion of the Falcon Acquisition. Former Falcon shareholders may decide not to hold the

shares of Tamboran common stock that they receive in the Falcon Acquisition, and Tamboran’s historic stockholders may

decide to reduce their investment in Tamboran as a result of the changes to Tamboran’s investment profile as a result of the

Falcon Acquisition. These sales of Tamboran common stock (or the perception that these sales may occur) could have the

effect of depressing the market price for Tamboran common stock. In addition, Tamboran’s financial position after

completion of the Falcon Acquisition may differ from its financial position before the completion of the Falcon

Acquisition, and the results of Tamboran’s operations and cash flows after the completion of the Falcon Acquisition may

be affected by factors different from those currently affecting its financial position or results of operations and cash flows,

all of which could adversely affect the market price of Tamboran common stock. Accordingly, the market price and

performance of Tamboran common stock is likely to be different from the performance of Tamboran common stock prior

to the Falcon Acquisition. Furthermore, the stock market has experienced significant price and volume fluctuations in

recent times which, if they continue to occur, could have a material adverse effect on the market for, or liquidity of,

Tamboran common stock, regardless of our actual operating performance.

The anticipated benefits attributable to the Falcon Acquisition may vary from expectations.

The combined company may fail to realize the anticipated benefits expected from the Falcon Acquisition, which

could adversely affect the combined company’s business, financial condition and operating results. The success of the

Falcon Acquisition will depend, in significant part, on the combined company’s ability to successfully integrate the

acquired business and realize the anticipated strategic benefits from the combination. Tamboran believes that the

combination of the two leading Beetaloo Basin businesses will provide a pro forma 2.9 million net prospective acres across

the Beetaloo Basin depocenter. The anticipated benefits of the Falcon Acquisition may not be realized fully or at all, or

may take longer to realize than expected. Actual operating, technological, strategic and revenue opportunities, if achieved

at all, may be less significant than expected or may take longer to achieve than anticipated. If the combined company is not

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able to achieve these objectives and realize the anticipated benefits expected from the Falcon Acquisition within the

anticipated timing or at all, the combined company’s business, financial condition and operating results may be adversely

affected.

The Falcon Acquisition may result in a loss of joint venture partners and other business partners and may result in the

termination of existing contracts.

Following the Falcon Acquisition, some of the joint venture partners and other business partners of Tamboran or

Falcon may terminate or scale back their current or prospective business relationships with the combined company. Some

customers may not wish to source a larger percentage of their needs from a single company or may feel that the combined

company is too closely allied with one of their competitors. In addition, Tamboran and Falcon have contracts with joint

venture partners and other business partners that may require Tamboran or Falcon to obtain consents from these other

parties in connection with the Falcon Acquisition, which may not be obtained on favorable terms or at all. If relationships

with joint venture partners and other business partners are adversely affected by the Falcon Acquisition, or if the combined

company, following the Falcon Acquisition, loses the benefits of the contracts of Tamboran or Falcon, the combined

company’s business and financial performance could suffer.

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