탐보란 리소스(TBN) 2026 회계연도 4분기 실적 발표 콜: 첫 비탈루 가스 판매

핵심 요약

• 탐보란 리소스(Tamboran Resources)가 비탈루 분지(Beetaloo Basin)에서 노던 테리토리 시장으로 첫 가스 판매를 달성했다. 실적 발표 당시 20일 동안 가스가 공급되고 있었으며, 계절적 수요로 인해 일일 가스 지명량(nominations)은 25테라줄로 제한되었다.
• 시운전 이후 가스 판매 계약(Gas Sales Agreement)은 일일 40테라줄 규모의 의무 인수(take-or-pay) 공급 기간에 진입할 예정이다. 시운전 기간 중에는 가스 공급이 중단될 수 있어 탐보란은 가스 가격의 75%를 수령한다.
• SS-2 파쇄(stimulation) 캠페인은 3만 수평피트에 걸쳐 178개 스테이지를 완료했으며, 하루에 12개 스테이지를 수행하는 분지 내 최고 기록도 세웠다. 이 중 10개 스테이지에는 현지에서 조달한 비탈루 레드 샌드(Beetaloo Red Sand)가 사용되었다.
• 경영진은 수평 길이가 1만 피트인 유정의 경우 현지 모래를 사용하면 수입 모래 대비 완공 비용을 400만 달러 줄일 수 있을 것으로 추정했다. 적용 확대 여부는 장기 생산 데이터에 따라 결정될 전망이다.
• 탐보란의 분기 말 기준 현금은 2억 2,500만 달러, 미인출 부채는 3,100만 달러다. 데일리 워터스 에너지(Daly Waters Energy)로부터의 조건부 1,500만 달러 수령액을 포함하면 프로포마(pro forma) 현금은 2억 4,000만 달러다.
• 스터트 플래토 압축 시설(Sturt Plateau Compression Facility)은 예정대로 준공되었으며, 예상 예산보다 약 900만 달러 절감되었다. 현재 시운전 및 장비 최적화가 진행 중이다.

주요 재무 데이터

탐보란은 시운전이 계속되는 향후 2개 분기 동안 파일럿 프로젝트의 일부 매출과 비용이 미국 회계기준(U.S. GAAP)에 따라 자본화될 수 있다고 밝혔다. 이에 따라 단기 손익계산서 실적에는 관련 현금 흐름이 반영되지 않을 수 있다.

사업 및 운영 성과

첫 가스 판매는 비탈루 분지 파일럿 프로젝트가 상업적 공급 단계로 전환되었음을 의미한다. 현재 물량은 유정의 공시 용량보다는 노던 테리토리 정부의 지명량에 의해 제한되고 있다. 탐보란은 지속적인 생산량과 감퇴율 기록을 구축하기 위해 2개 유정에 우선순위를 두고 있으며, 다른 유정들은 플로우백 용수(flowback water) 회수 및 지명량 충족 필요에 따라 번갈아 가동되고 있다.

SS-2 패드 수압파쇄 프로그램에는 리버티 에너지(Liberty Energy)의 장비가 투입되었으며, 3만 수평피트에 걸쳐 178개 스테이지를 완료했다. 지퍼 프랙(zipper-frac) 방식을 적용해 일일 최대 20시간 가동 및 분지 기록인 하루 12개 스테이지를 처리했다. 탐보란과 리버티는 수압파쇄 및 와이어라인 서비스 연장에 관한 구속력 없는 양해각서(MOU)를 체결했다. 리버티는 2027년부터 저배출 펌핑 장비를 도입할 계획이다.

SS2-5H 유정의 10개 스테이지에 비탈루 레드 샌드가 사용되었다. 경영진은 펌핑 압력이나 균열 개시(fracture initiation)에 악영향이 없었으며, 추적자(tracer) 시험 결과 인접 스테이지와 동일한 성능을 나타냈다고 보고했다. 탐보란은 유정 전체에 적용하는 방안을 검토하기 전에 SS-1 패드에서 추가적인 일부 구간 테스트를 진행할 계획이다.

SS-1 패드에서는 3개 유정 시굴 캠페인 중 첫 2개 유정의 굴착 조사가 완료되었으며 세 번째 유정은 시굴 중이다. 비트 설계 개선, 진동 방지 툴, 시굴 장비 개조를 통해 모로악(Moroak) 지층에서 최고 시굴 속도를 기록했고 수평 구간 평균 굴진율(ROP)도 향상되었다. 경영진은 탐보란이 과거 24일 만에 유정을 굴착한 경험이 있음을 지적하며, 25일 이하의 굴착 시간을 현실적인 목표로 보고 있다.

동부 퇴적중심지(depocenter)에서는 산토스(Santos)가 EP 161 광구에서 지베라 사우스 1H(Jibera South 1H) 및 뉴캐슬 사우스 1H(Newcastle South 1H) 평가정을 착공했다. 탐보란은 25%의 지분(working interest)을 보유하고 있다. B 셰일층이 주요 타깃이며, 다른 구간에서도 추가적인 다층 유전/가스전(stacked-pay) 잠재력이 확인되었다.

경영진 전망

경영진은 우기 동안 기온과 전력 수요가 증가함에 따라 노던 테리토리의 가스 지명량이 증가할 것으로 예상한다. 탐보란은 고객 수요에 따라 시점이 달라질 수 있지만, 지명량이 올해 말까지 계약 수준인 일일 40테라줄에 다다를 수 있다고 밝혔다. 계절적 제한 조치는 내년에 다시 적용될 수 있으며, 이에 따라 일부 추가 유정의 가동이 중단될 수 있다.

시운전 및 생산 테스트가 완료되면 탐보란은 공급이 일일 40테라줄 규모의 의무 인수(take-or-pay) 기간으로 전환될 것으로 예상한다. 인수자가 인수하지 않은 가스는 향후 인도할 가능성을 위해 적립(banked) 처리된다.

회사는 오는 11월 2027 회계연도 1분기 실적 발표에서 첫 분기별 가스 매출 및 수익을 보고할 예정이다. FY2027 및 FY2028 캠페인은 데일리 워터스 에너지, 인펙스(INPEX), 산토스와 함께 향후 18개월 동안 최소 6개의 평가 확장정(step-out wells)을 시굴하는 등 양쪽 비탈루 퇴적중심지 전반에 걸친 자원 영역 확정(delineation)에 집중할 계획이다.

광범위한 자본 투입 프로그램은 전략적 파트너 선정 및 관련 작업 프로그램에 대한 합의에 부분적으로 좌우될 예정이다. 경영진은 논의가 진행 중이라고 밝혔으나 거래 일정표는 제시하지 않았다.

리스크 및 주요 관심 분야

• 탐보란은 모든 유정의 생산 이력이 90일 미만이어서 장기 감퇴율 및 회수율에 대한 가시성이 제한적이다.
• 비탈루 레드 샌드는 초기 펌핑 및 추적자 테스트에서 예상대로 작동했으나, 변화하는 저류층 압력(reservoir stress) 하에서의 내구성은 더 긴 생산 이력을 통해 검증되어야 한다.
• 현재 판매 물량은 노던 테리토리 정부의 지명량에 의존하며, 의무 인수 공급이 시작될 때까지 계절적 수요 변화에 노출되어 있다.
• 스터트 플래토 압축 시설의 확장은 주변 제3자 파이프라인 인프라가 추가 생산된 가스를 신규 시장으로 수송할 수 있다는 신뢰도에 달려 있다.
• 향후 자본 지출의 시기와 규모는 전략적 파트너와의 협상 및 개발 우선순위에 대한 조율과 연계되어 있다.
• 구속력 있는 동부 연안 가스 판매 계약을 체결하기 위해서는 더욱 명확한 자원 정의와 추가적인 지하 리스크 해소(subsurface derisking)가 요구될 것으로 예상된다.

애널리스트 Q&A 주요 내용

애널리스트들은 굴착 효율성, 유정 감퇴 데이터, 현지 모래의 확장성, 자본 지출, 파이프라인 개발에 집중했다.

경영진은 시굴 성능 향상의 요인으로 비트 재설계, 진동 방지 툴, 방향 수정 계획, 시굴 장비의 온도 제어 개선을 꼽았다. 저비용 셰일 개발로 나아가기 위한 주요 요구 사항으로 반복 작업, 안정적인 작업조 투입, 분지 전반의 활발한 활동이 제시되었다.

생산과 관련해 경영진은 우선순위가 지정된 2개 유정이 예상대로 가동 중이며 만족스러운 압력 데이터를 보이고 있다고 언급했다. 남은 핵심 과제는 시간이 지남에 따라 생산량이 어떻게 감소하는지 여부다. 지명량이 증가함에 따라 추가 유정이 기여할 수 있지만, 지속적인 장기 성능 이력을 위해 우선순위가 부여되는 유정은 2개에 불과할 것으로 예상된다.

탐보란은 충분한 생산 증거가 확보될 때까지 유정 전체에 현지 모래를 사용할 계획이 없다. 회사는 저류층 압력이 감소함에 따라 레드 샌드 적용 스테이지가 상대적 기여도를 유지하는지 평가할 예정이다. 경영진은 성능이 비슷하게 유지될 경우 현지 모래가 궁극적으로 분지 내 사용되는 받침체(proppant)의 사실상 전부를 차지할 수 있다고 설명했다.

동부 연안 인프라와 관련하여 경영진은 APA가 인허가 및 부지 사용권(right-of-way) 작업을 추진 중이라고 밝혔다. 다만 구속력 있는 상업적 확약은 명확한 자원 기반을 구축하는 추가 생산 데이터 및 평가 결과 이후에 이루어질 것으로 예상된다.

실적 발표 전체 녹취록

전체 실적 발표 컨퍼런스 콜 녹취록

경영진 발표

Operator

Greetings, and welcome to the Tamboran Resources Fourth Quarter Fiscal Year 2026 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded. [Operator Instructions] It's now my pleasure to turn the call over to Todd Abbott, Chief Executive Officer. Todd, please go ahead.

Todd Abbott

Hello, everyone, and welcome to Tamboran Resources Financial Year 2026 Fourth Quarter Earnings Presentation. My name is Todd Abbott, and I'm the Chief Executive Officer of Tamboran Resources. I'm joined here today by Chief Financial Officer, Eric Dyer; and VP, Investor Relations and Corporate Development, Chris Morbey.

I'll start by reviewing delivery against the commitments we made 12-months ago, then cover production and commissioning as we build towards plateau rates and contracted supply. I will also discuss what our latest well results and operating improvements mean for our performance and cost as we continue to derisk our asset. I will then review our funding position and close with the next development milestones before we take your questions.

Moving to Slide 2, you can see our disclaimer, which relates to forward-looking statements within the presentation. I encourage you to review those at your convenience.

On Slide 3. The last few months have been a pivotal period for Tamboran and the Betaloo Basin as we have delivered on a key commitment and provided the next step in derisking the basin. We have delivered First Gas Sales from the Betaloo to the Northern Territory Gas market. Homes and businesses in Darwin are now being powered by a local onshore resource. These gas sales also bring royalties to the Northern Territory Government and native title holders alongside job opportunities for Territorians. Tamboran already employs a significant local workforce, which we expect to grow as activity increases over the coming years.

Moving to Slide 4. Gas has now been flowing into the market for 20 days. Volumes are currently limited by market demand with the Northern Territory Government nominating 25 terajoule per day as the territory comes out of its lower demand season. We expect demand and therefore, nominations to keep growing through the Northern Territory's peak demand period. We are currently in the commissioning period of the Gas Sales Agreement. Once the agreement moves into the supply period, take-or-pay provisions will apply to the 40-terajoule per day contract quantity, and we will be getting revenue based on that 40-terajoules per day. Any gas the offtaker does not take will be banked for future potential delivery. This gives us downside protection in the event of lower nominations during the contracted period.

Regarding our flowback strategy, we will prioritize 2 wells to ensure that we're generating long-term production and well performance data to further derisk the basin. The remaining wells will be managed as needed to recover flowback water and to close any gap to the allowable nominations. In achieving this first gas milestone, our operations team have been working deliberately across multiple work streams. They successfully completed the stimulation campaign on the SS-2 pad in the Betaloo Basin. The program utilized the Liberty Energy stimulation fleet that was imported into the basin in 2023. During the program, we completed 178 stages across 30,000 lateral feet. It was the largest stimulation campaign conducted in the basin. And the Zipper-frac approach allowed us to achieve 20 hours of operations and the Betaloo Basin record 12 stages completed in a day. This gives us and the market early evidence that we can execute completions more efficiently.

The next measure of success is sustaining an improved pace across a full campaign, reducing downtime and bringing down completion cost per well.

We have also entered into a nonbinding memorandum of understanding with Liberty Energy, setting out the intent to extend the hydraulic fracture stimulation and wireline services agreement covering Tamboran's operations in the Betaloo Basin. Liberty intends to begin phasing lower emissions pumping equipment into the Betaloo fleet from 2027. Importantly, the campaign included 10 stages using the locally supplied Betaloo Red Sand across various locations in the SS2-5H well. The pumping and placement of the local sand was an identified risk going into the program. However, given we experienced no impact to pump pressures or fracture initiation during these stages, we are confident on our ability to place local sand in future campaigns. Tracers across the horizontal length have shown that the stages are producing in line with offset wells, but these are still early days, and the true test will be the longer-term flow rates and recoveries. We plan to further test our Betaloo Red Sand during the upcoming stimulation program planned on the SS-1 pad. Success of that local sand is a key step in delivering near-term cost reduction for well completions. It is expected that, that sand could save USD 4 million per well with a 10,000-foot horizontal section compared to the sand imported from overseas. Those long-term flow rates and recoveries from those stages will help us assess how widely we can apply those savings.

In conjunction with the upstream activity, the operations team successfully completed construction of the Sturt Plateau compression facility, on time and approximately USD 9 million below the forecasted budget. This allowed us to meet our commitment to the supply of the Northern Territory gas market during the quarter. The commissioning of the facility remains ongoing as we fine-tune control systems and refine equipment settings. During the commissioning period, we will be receiving 75% of the gas price. This is due to the interruptible nature of the supply. Once commissioning and production testing requirements are complete, we will commence delivery into the take-or-pay contract with the Northern Territory Government.

During the quarter, the operations team also commenced drilling the 3-well campaign on the SS-1 pad with the H&P Flex 3 Rig. Drilling of the first 2 wells has been completed with the third well currently drilling ahead. We continue to incorporate lessons from previous campaigns. This program includes first wells drilled with our improved drill bit design and anti-vibration tools. This resulted in record speeds through the Moroak formation. Modifications to the rig have resulted in reduced mud temps, allowing increased average ROP in the lateral sections. We continue to work with our contract partners to improve efficiencies and reduce downtime, especially within the lateral section, and we believe these are addressable as we ramp up activity.

In the East, drilling of the 2-well appraisal program with Santos on EP 161 has also commenced with the Jibera South 1H and Newcastle South 1H wells in that depocenter. During the quarter, we significantly strengthened our balance sheet. In April, we raised USD 186 million net of fees via an underwritten public offer and an institutional and retail entitlement. The funds from the raise solidify the balance sheet and provide us financial flexibility.

At the end of the quarter, Tamboran had USD 225 million in cash and USD 31 million in undrawn debt for funding of the SPCF, including the USD 15 million that we expect to receive from Daly Waters Energy, the pro forma cash position is USD 240 million. Receipt of that $15 million remains subject to certain conditions precedent. Over the next 2 quarters, we expect that under U.S. GAAP, some revenue and costs related to the Pilot Project will be capitalized to the balance sheet during commissioning, rather than flowing through the income statement. This is to avoid reporting volatility and means that the income statement will not reflect cash movements during the period. We expect to announce first quarterly gas sales and revenue in our 1Q fiscal '27 earnings in November.

The next phase of our development plan is to further delineate our gas resources across both depocenters in the Betaloo Basin. This will be the focus of our '27 and '28 campaigns. We are working with our joint venture partners, Daly Waters Energy and INPEX in the West and Santos in the East to drill and stimulate at least 6 step-out wells over the next 18 months. We are progressing discussions with multiple parties to bring in a strategic partner. These strategic discussions and the upcoming appraisal work, aims to align on resource delineation and commercialization pathways that will support a large-scale development and underpin new pipeline infrastructure. That infrastructure is expected to connect the Betaloo Basin to multiple high-value markets.

To close, we have delivered the First Gas Sales that we committed to 12 months ago and completed the compression facility on time and below the forecasted budget. Our latest drilling and stimulation work is showing where we can improve efficiency, while local sand offers a potential source of completion cost savings. The equity raise has strengthened our balance sheet for the next phase of development. The priority now is to turn those achievements into sustained operating performance. That means completing commissioning and production testing, building towards plateau production and contracted supply and demonstrating that the gains in well delivered can be repeated. Those are the measures, I will use to judge our progress as we advance our development plans and partner discussions.

As we close, I want to thank all Tamboran employees for their commitment, their performance and their support for one another as we continue to grow, evolve and deliver for our customers and shareholders. Thank you.

Operator

[Operator Instructions our first question today is coming from Scott Hanold from RBC Capital Markets.

질의응답

Scott Hanold

Congrats on all the milestones that you guys have achieved and plenty ahead. I want to start maybe focusing on the SS1-6H well. It sounds like it was a pretty successful drill and -- could you give us a sense of what specifically you're changing in your drilling operations to see that success? And what other knobs and dials are you looking forward to doing? And I'm sorry, I'm going to layer on one more thing on this. What kind of cost -- what is that kind of pro forma cost on that now that you've seen some good improvement?

Todd Abbott

Yes, Scott, good to hear from you. Good question. On the 6H and maybe even more broadly kind of on the total drilling program, like the recent changes you'll see there, and I referenced it in the remarks there, the bit design on some of the kind of upper level zones there that we were going through. The vibration damper was actually a pretty big change for us. So that's helped us quite a bit.

I'll also add like one of the things that isn't really a tool change, but the directional plans on those wells and that the way we attack that Moroak Sandstone, which is just a really hard zone, just hard rock to get through. So that's been one of the areas where we saw the biggest opportunities. And in that last well, we got through it with one bit, which was a big win for us. Earlier wells, initial wells on this had many more bits trying to get through that zone. So that's been a key improvement for us. When we look at the kind of opportunities going ahead, we think improving time on our downhole tools is going to help us a lot. We do see opportunities eventually to go to a synthetic oil-based system, which will help our drilling times as well, the ROPs.

And then there's going to be a lot of little things. I mean, I think you've heard me say this before, ultimately, to really get the drilling times and those costs down where we need them to be, we need two things. We need repeatability. So just doing the same thing, same crews, doing it again and again and again. And then the other is scale across the basin. So this is all operators, but having enough critical mass of activity in the basin so that service companies have their center of operations that can be efficient in the way they set up their operations, so that we have readily available tools, readily available people, skill sets, logistics all work better. Everything we've seen in these large shale plays in the U.S. will eventually happen here. But those are the two things that really get it down into those kind of U.S. level cost structures.

Scott Hanold

Good to hear that. My follow-up question is -- and correct me if I'm wrong, it sounds like there's two of the wells that are producing online at this point in time. And could you give us a sense of what you've seen? I know it's still early, but what have you seen on the pressure data on those wells? And are those wells kind of -- have you opened the choke up fully on those? Or are they still choke back here at this point?

Todd Abbott

Yes. I'll say it's been variable on that. The wells look good. They're in line with our expectations. What we're really interested to see on those are the long-term decline rates, and won't know that for a bit. And we haven't produced a well out here for more than 90 days. So specifically, we're working under that 25-terajoule a day nomination limitation. So we're prioritizing 2 wells so that we can develop the production histories and the well performance data to show what the wells can do. But aside from those 2, we've had the other wells cycling on and off kind of as needed, if we need to close the gap to the denomination or as we need to manage getting water off of those wells, kind of helping clean those up. With regard to pressure data, I mean, the pressure data looks good. But again, it's kind of all in line with our expectations. We just need to watch that over time.

Operator

Next question is coming from Leo Mariani from ROTH.

Leo Mariani

I was hoping you maybe talk to what you think CapEx is going to be in the rest of the calendar year. So I guess it would be calendar 3Q and 4Q? Just trying to get a sense of that would be helpful.

Todd Abbott

Yes. And we'll get Chris to kind of go through the specific numbers on it. But I'll tell you, at a high level, we've got 4 wells in the Pilot Area that you'll see 3 this year, 1 next year. We've got the 2 Santos wells over EP 161 with our 25% working interest drill this year, stimulating next year. And then we've got the 4 wells in the BCDA with Daly Waters. It's about a 10% working interest there. So I mean, overall, you can expect our capital to be focused on derisking.

And frankly, the full capital program isn't going to be fully locked-in until we finalize who our partner is and align those, what I would call, collective strategic priorities, kind of where we're going to be in both basins. As you can imagine, each potential partner has a little bit different focus, either one depocenter or the other or for some both. So as those conversations evolve, we'll lock the rest in.

Leo Mariani

Okay. And can you provide a little bit more color on kind of where you are in the process of securing a partner? Do you think that's likely to happen kind of in the next handful of months, which will let you kind of give a better picture of what that kind of '27 calendar year budget would be?

Todd Abbott

Yes, it's certainly moving forward. Look, we continue to see strong outside interest. We're having the right conversations with the right potential partners. I mean, at the end of the day, we're looking for the right capabilities to fit with the strategy and the right time frame with the operation. So I can sympathize with the kind of desire for certainty on the time line, but just please bear with us. It's all in play. And I'm sure everyone appreciates that deals like these take time and need to be carried-out thoughtfully. So we're working through that process. It will -- wherever we land on that, whichever partner we ultimately land with, it will be with a defined work program. And going back to your first question, that will update that capital program.

Operator

Next question is coming from Jeff Grampp from Northland Capital Markets.

Jeffrey Grampp

I was curious with respect to additional in-basin sand testing, I think you said the upcoming fracs will include at least 1 well. I just wanted to clarify, is that something you guys are comfortable doing across the whole wellbore? Will this be another partial test? And then maybe just taking a step back, what do you guys view as kind of the scalability of in-basin supply to the extent you have more confidence there? How meaningful of a portion of the program could that be longer term?

Todd Abbott

Yes. So first, I'll just kind of talk about the early performance. And I mentioned in the remarks, too, we had no problems pumping the sand, which -- that was something we were watching for. We started the fracs, like initiated the fracs well with it. So we're highly confident in our ability to pump it. When we look at the tracers coming back from those stages, they look identical to the other stages and the other wells. So early results are positive. But just like with the production, we won't know the full answer until we get some production history on this and see how all that holds up. So yes, we're optimistic on what it can do.

With regard to these next wells, we won't move to a full Red Sand program until we are confident in it. So we need some of that history. Each well we drill out here is pretty important to help derisk the basin. So we're not going to kind of take outsized risk on any one of them. So we'll do some additional stages on these next completions, but we won't do full wells at this point, Jeff. Going forward, like once we get history on it, once we're comfortable that the Betaloo Red Sand does what we expect and hope it will do, I can see us going to a 100% full program of Red Sand or effectively 100%. There could be some supplements here and there. But I think the end goal is to use in-basin sand in the Betaloo. And from a well cost perspective, it's going to be the obvious right thing to do.

Jeffrey Grampp

Yes. Understood. That makes sense. And for my follow-up, with respect to the potential to expand the SPCF, I think you talked about maybe making an investment decision next year. What are the milestones or key, I guess, check boxes, if you will, to get comfortable making that decision? Is that more on comfortability around your own internal producibility volumes, offtake, financing, all the above? Just any kind of, I guess, kind of milestones to keep an eye out to track that project?

Todd Abbott

Yes. I think all the things you're mentioning are important inputs on it, although I feel pretty good about all the ones you mentioned. The one that we really have to look at, and this is probably the key uncertainty on whether we expand it or not, is making sure that the surrounding infrastructure network will allow us to move the incremental volumes to the incremental markets, right? Just having high confidence that we can get that.

We don't own the pipelines all around us and understanding how the gases are going to flows and how those are going to be upgraded or modified over time will help us make the decision. So we're working through that now, kind of getting a better understanding each day on it. But that's something we just need certainty on before we make that kind of investment. We need confidence that we will be able to...

Operator

Next question is coming from Charles Meade from Johnson Rice.

Charles Meade

Good morning Todd to you, and Eric and Chris and the rest of the Tamboran team. Todd, I want to go back to the -- your decision to flow these -- or really, I guess, prioritize these 2 wells in the initial 25 million cubic feet a day. It seems like getting more production history on more wells is the -- one of the key near-term things that you're looking for. So I'm curious, can you give us an idea when that 25 million cubic feet a day will go to up to the 40 million cubic feet? I mean, I think you said it's contingent on the full commissioning of the SPCF. Can you just give us a time line on when you're going to be able to start to build more of that production history?

Todd Abbott

Yes. Charles, just to make sure I understand your question. You're asking when can we get like -- it's about 25 terajoules now, but when can we get up to the 40 terajoules take-or-pay?

Charles Meade

Yes. And presumably, if you're doing it from 2 wells now, then when you get to 40 terajoules, then you're doing 3 or perhaps even 4 wells. And I guess I didn't do a good job asking the question, but it seems like the data that everyone wants to see are these decline curves. And so when are you going to be able to start building not 2 decline curves, but 3 or 4?

Todd Abbott

Yes. Okay. I understand your question. So yes, on the nominations, right? So the NTG, the Northern Territory Government nominates the gas that they need, right? So right now, because of just where they are seasonally, those needs are not high. So they've limited us to 25 terajoules a day for most days. That will continue kind of in the near term as they move into the wet season, as temperatures rise, you're going to see that load increase, their power generation load increase and thus their gas demand increase.

But just to be clear, I think I said this clearly earlier in the remarks, but not exactly your question, Charles, but for everyone else's benefit, the 25 terajoules a day is a Northern Territory Government limitation, not a well [indiscernible]. So we're meeting that now. We prioritized the 2 wells. Exactly what you're saying, our priority is on generating well history and performance data for these wells long term. So we prioritized the 2 wells. We expect as we move through towards the end of this year, that nomination is going to go up. We're going to get more wells under that.

But to start with, we're prioritizing those 2 wells. And the wells we're prioritizing are both full 10,000-foot lateral and then the well with Betaloo Red sand so that we can get clarity on that data. I think probably by the end of the year, we'll see up with that -- I'm kind of predicting a little bit what they're going to nominate that 40 terajoule a day target. So we'll be able to get more wells in there, Charles, but it's hard to say exactly.

But then later, as we go into next year, we should expect the seasonal restrictions to kind of come back in, and we'll have to pull some of those incremental wells offline. So you won't get the full kind of 12-month history on the other wells, but we are going to prioritize at least 2 wells, so that we can really see the long-term history of what the wells do. Am I answering your question? I feel like I muddled through that.

Charles Meade

No, no, no, you did. That's a great elaboration. And you understood what I was asking even if I didn't make it very clear on my part. But -- and then separately, going in a different direction about the derisking more of the basin. These 2 wells that -- these 2 Santos-operated wells off to the East, can you remind us, I mean, you've shown these logs on Page 12, and it looks thicker over there. You've got multiple landing guards. Can you remind us where -- which of these shale zones you have the laterals targeted-in? And also, can you remind us which of these zones did you test vertically way back in 2021 with that Tanumbirini?

Todd Abbott

Yes. So on the east side, just like the West side, the primary target is the B shale. And if you look on those logs, yes, you can see they vary a little bit, but what you'll see common in both logs is the B shale is the primary target to most people when they will look at it, and both areas have multiple stack pay outside of the B shale, right? So whether you're looking at the A or the C or some of the other things in there. Going back to the history, I'll have to go back and look at the log to see exactly what that well test was. You're predating me a little bit, so I need to go back and check on that. Chris or Eric may hand in on whatever on top of mind...

Eric Dyer

Yes. I mean the -- so there was a vertical frac done by Santos, I want to say, 2019 that hit most of the zones and there was -- one of the lower zones was a bit tight. But look, there's a lot of prospectivity there. The B shale is by far the primary target. But there is some downhole potential and there is some opportunity. But really, that's all off of one vertical frac from 7 years ago. So I think capital is precious, and we've got to be very careful with what we're doing. We're working very closely with Santos to evaluate where we're looking at in that side of the basin. But I do think that, that's one of those things where, in time, there is potential.

Operator

Next question is coming from Paul Diamond from Citi.

Paul Diamond

Circling back to local sand. I guess I know you guys have run the tracer data and talked about 12-month curves being ideal. But I guess can you dig down a little bit there? What are you looking for in that data? I guess what's the hurdle rate on kind of the go or no go for using 100% sand on maybe the 6 wells in the next 18 months or if it's a longer-term narrative?

Todd Abbott

Yes. I mean I would say the real impact of the Red Sand is really in development mode, right, where your capital intensity is higher. We have more wells going in. So we certainly want to have that answer before we get into a development mode. We want to use increasing test as we go forward. What we're specifically looking for in this, is to make sure that the zones where we place that Red Sand hold up on a relative contribution basis over time. Right?

So you can see situations where as the reservoir drawdowns and as those stresses change downhole a bit, the crush pressure for that, that's not a technical term, but can kind of increase over time. We want to make sure that this sand holds up the way the other zones hold up. So that's what we're looking for. We're looking for relative contribution across those different zones and make sure they're comparable. And as long as they are, the cost differences are dramatic, we'll stay with the local sand.

Paul Diamond

Got it. And then switching to Slide 11. You guys show your kind of target of 25 days or less than 25 days. Just trying to get an understanding of, I guess, how -- I guess we're all trying to triangulate CapEx over the long term. But how do you -- how much lower do you think you can get over the course of the next, call it, the 6 delineation wells over the next 18 months? Is 25 days kind of the right number? Or is there a target below that?

Todd Abbott

I think 25 days is a very realistic number for us, and we've actually beat that on other wells, right? We've had a 24-day well. And if you look at our performance in the individual sections of those wells, you add all those up, they're well under the 25 days. On each one, there's kind of been little things here and there that have kept us from doing that, but we're starting to see exactly how we de-bottleneck those processes. So I think you'll see us continuing to improve those. Longer term, I think you could -- especially in the development mode, you should see us setting more ambitious targets than 25 days. But for where we are right now, I think 25 days, is a good target.

Operator

Next question is coming from Anish Kapadia from Hannam.

Anish Kapadia

Just had a question, first of all, in terms of -- I just want to see what needs to happen before the non-binding LOIs that you have for the pipeline get converted into binding GSAs? And when do you realistically expect that conversion to begin? And kind of related to that, what are the remaining commercial regulatory financing milestones for the East Coast pipeline? And what's the kind of current timetable for that binding pipeline development agreement and FID?

Todd Abbott

Yes. So your question is specifically East Coast?

Anish Kapadia

Yes.

Todd Abbott

Okay. Yes. Look, I think APA has been out there pretty actively talking about their work on the East Coast pipeline. They've done a lot of work on both the permitting side and the right-of-way acquisition or [ reason-in ] acquisition to get that and are fairly well progressed. So high confidence that's moving to their credit. They're not really waiting. They're charging ahead on it. From a sequencing standpoint, the way I see that developing is this.

You'll see additional work, like the production data that we're putting on the board from the Pilot Area is probably the biggest piece of information to derisk the subsurface. That's what everybody and kind of everyone on this call and everyone within Tamboran are waiting to see. But that will demonstrate the well decline and the longer-term nature of these wells. Then you've got the other wells that are going in this year.

So the 2 wells over EP 161 are going to be important. The other wells in the West will also correlate. Then over time, and kind of referencing this with our JV process again, there will be other work programs that come out and delineate additional resource. But ultimately, what the industry has to do, and I say that meaning broader than just Tamboran is collectively our work will derisk the resource to merit that infrastructure investment. And that can happen fairly quickly. The resource out here is such that it doesn't take a lot of wells to identify pretty large resource and to merit that large infrastructure investment. So that East Coast pipeline with APA doing their work and with us doing the upstream work, it really derisk the investment.

And we all know that the LNG for this on the East Coast and the new both in the domestic market and in the LNG facilities over there. So GSAs, early conversations are already happening, but there's nothing binding that's going to happen until you have a very clear resource. So I hope that's helpful. That's kind of where the sequence is. It's a little bit hard to say exactly what the timing looks like, but that's the way the sequence will work.

Operator

We reached the end of our question-and-answer session. I'd like to turn the floor back over for any further or closing comments.

Todd Abbott

Listen, guys, we always appreciate the conversations. We're excited about where we're going. We are fully focused on strategically de-risking this play. That's the most important work ahead of us. So the production data is going to go a long ways towards that and then some further delineation work in '27. And I think it's going to be a big year for the basin. So thank you for your engagement, and we'll keep moving on.

Operator

Thank you. That does conclude today's teleconference and webcast. You may disconnect your line at this time, and have a wonderful day. We thank you for your participation.