santos-backed tamboran resources

March 13, 2013, 7:01 PM
Santos-Backed Shale Explorer Seeks $20.5 Million

By Gillian Tan

An Australian shale oil and gas explorer, which counts Santos Ltd. STO.AU -0.15%as a major shareholder, is seeking new funding ahead of a possible initial public offering next year.

Tamboran Resources aims to raise up to 19.9 million Australian dollars (US$20.5 million) in new funds, according to a investor presentation seen by The Wall Street Journal.

Tamboran hopes to place between 6.63 million to 13.26 million shares at A$1.50 each. Santos owns 14% of the stock after acquiring A$10 million-worth of shares at the same price, according to the presentation Total FP.FR -0.04%diluted capital after the raising will be between A$93.2 million and A$99.8 million.

The company owns permits or has applied for tenements spanning more than 27 million acres, which it thinks contain unconventional oil and natural gas. These blocks are located in areas including the Ngalia, Pedirka, Beetaloo and McArthur basins of Australia, Botswana’s Karoo Basin and Ireland’s Lough-Allen Basin.


Associated Press The group’s board includes experienced shale basin developers. Eastern Star Gas founder Patrick Elliott is executive chairman, while former president of Southwestern Energy Co. SWN -0.29%Richard Lane is his deputy. Eastern Star was sold to Santos in 2011, while Southwestern Energy’s market value grew from below US$200 million to US$15 billion during Mr. Lane’s decade-long tenure.

The placement price equates to A$2.83 an acre, which is lower than the US$6 an acre paid by France’s Total SA in its deal with Central Petroleum Ltd. CTP.AU 0.00%to explore Australia’s Southern Georgina Basin last November and the US$11 an acre paid by Santos in its exploration venture with Central Petroleum last October in the Amadeus basin.

The company’s acreage in the Beetaloo and McArthur Basins, where Santos will be Tamboran’s joint venture partner, was drilled by a Rio Tinto RIO.AU +0.29%unit between 1988 and 1992, according to the presentation. Falcon and Hess Corp. HES +0.70%struck a joint venture in an adjoining area for US$24 an acre in March 2011.

In December, Santos agreed a three-year staged commitment, which could see it acquire a 75% interest in the Beetaloo and McArthur acreage in return for more than $70 million in exploration spending.

Santos also has the right to increase its direct equity stake in Tamboran to 20%.

CIMB Group Holdings 1023.KU -1.93%and RBS Morgans-advised Tamboran management are traveling through Asia and Australia in a roadshow for the next fortnight, according to the presentation.

http://www.tamboran.com/

http://blogs.wsj.com/dealjournalaustralia/2013/03/13/santos-backed-shale-explorer-tamboran-resources-seeks-20-5-million/