Tamboran Resources Corp

(UNAUDITED)

Note 1 – Business and Basis of Preparation

General

Tamboran Resources Corporation (the “Company” or “Tamboran” and together with its consolidated subsidiaries,

the “Group”) is an early-stage growth-oriented natural gas company with a vision of supporting the netzero CO 2 energy

transition in Australia and Asia-Pacific through developing low CO 2 unconventional gas resources in the Northern

Territory(“NT”) of Australia. The Group is in the exploration stage with a current focus on exploiting its primary assets,

which are rights to working interests (“Tenements”) in exploration acreage in the Beetaloo sub-basin (“Beetaloo” or

“Beetaloo Basin”), NT Australia. To date, the Group has not determined whether the Tenements contains any natural gas

reserves that are economically recoverable. Further, the Group had no revenues from its gas operations as of September 30,

Going Concern and Management’s Liquidity Plan

The accompanying condensed consolidated financial statements have been prepared on the basis that the Group will

continue as a going concern which contemplates the realization of assets and the satisfaction of liabilities in the ordinary

and usual course of business.

As of September 30, 2024, the Group had:

•not generated revenues since inception, and is unlikely to generate earnings in the immediate or foreseeable

future;

•aworking capital surplus of$47,264,270 (excluding assets held for sale);

•an accumulated deficit of$136,274,345 since inception; and

•significant expenditures planned for the unproved properties in the next 12 months.

These factors raise substantial doubt regarding the Group’s ability to continue as a going concern for the 12 months

following the date these condensed consolidated financial statements were available for issuance. The continuation of the

Group as a going concern is dependent upon the ability of the Group to obtain necessary additional capital to fund ongoing

exploration, appraisal and development projects and/or obtain gas producing properties to attain future profitable

operations. No assurance can be given that the Group will be successful in these efforts in the future.

Management has several plans in various stages of progress to source additional funding to provide operating capital

for continued growth of the Group. Therefore, these condensed consolidated financial statements donot include any

adjustments related to the recoverability and classification of recorded assets and liabilities that might be necessary should

the Group be unable to continue as a going concern.

Basis of Presentation of Condensed Consolidated Financial Statements

The accompanying condensed consolidated financial statements have been prepared in conformity with the

accounting principles generally accepted in the United States of America (“U.S. GAAP”) and rules and regulations of the

Securities and Exchange Commission (“SEC”) applicable to interim financial statements. Pursuant to such rules and

regulations, certain disclosures and information required by U.S. GAAP for complete consolidated financial statements

have been condensed or omitted. The accompanying condensed consolidated financial statements and notes therein should

be read in conjunction with the financial statements and notes included in our consolidated financial statements for the year

ended June 30, 2024 (“Group’s Annual Financial Statements”).

These condensed consolidated financial statements reflect all adjustments, in the opinion of management, which

include normal and recurring adjustments necessary to fairly state the Group’s consolidated financial position, results of

operations, and cash flows for the periods presented herein. The interim results are not necessarily indicative of results for

any other future annual or interim period. The June 30, 2024, condensed consolidated balance sheet was derived from the

audited Group’s Annual Financial Statements but doesnot include all disclosures required by U.S. GAAP for annual

financial statements.

Significant Judgments and Accounting Estimates

The preparation of these condensed consolidated financial statements in conformity with U.S. GAAP requires

management to make certain estimates and assumptions that affect the amounts of assets and liabilities, revenue and

expenses and related disclosures of contingent assets and liabilities reported in the condensed consolidated financial

statements and the accompanying notes. There have beenno significant changes to the Group’s accounting estimates from

those disclosed in the Group’s Annual Financial Statements.

Significant Accounting Policies

The Group’s significant accounting policies are described in the notes to the consolidated financial statements for the

year ended June 30, 2024, included in the Group’s Annual Financial Statements. There have beenno significant changes in

accounting policies during thethree months ended September 30, 2024.

Foreign Currency Translation

These condensed consolidated financial statements are presented in US dollars (“$” or “dollars”) and the functional

currency of the Group is the Australian Dollar (“A$”). Adjustments resulting from the translation of functional currency

financial statements to reporting currency are accumulated and reported as a part of “Accumulated Other Comprehensive

Loss”, a separate component of stockholders’ equity.

Foreign Currency Transactions

Foreign currency transactions are translated into the Company’s functional currency using the exchange rates

prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such

transactions and from the translation at financial year-end exchange rates of monetary assets and liabilities denominated in

foreign currencies are recognized in the condensed consolidated statements of operations and comprehensive loss.

Leases

As a Lessee

The Group accounts for leases under ASC 842, Leases(“ASC 842”). The Group determines if an arrangement is a

lease at inception of the arrangement and if such lease will be classified as an operating lease or a finance lease. The

Group’s leases represent its right to use an underlying asset for the lease term. Right-of-use (“ROU”) assets and liabilities

are recognized at the lease commencement date based on the present value of lease payments over the lease term. As the

Group’s leases do not provide an implicit rate, the Group used a proxy for its incremental borrowing rate, which is the rate

incurred to borrow on a collateralized basis over a similar term, an amount equal to the lease payments in a similar

economic environment.

The Group has elected to account for lease and non-lease components in its contracts as a single lease component for

all asset classes except for office premises.

Operating leases are included in “Operating lease right-of-use assets” within the Group’s condensed consolidated

balance sheet. The Group’s related obligation to make lease payments are included in “Current portion of operating lease

obligations” and “Operating lease obligations” within the Group’s condensed consolidated balance sheet. Operating lease

expense for lease payments is recognized on a straight-line basis over the lease term.

Finance leases are included in “Finance lease right-of-use assets” within the Group’s condensed consolidated balance

sheet. The Group’s related obligation to make lease payments are included in “Current portion of finance lease obligations”

and “Finance lease obligations” within the Group’s condensed consolidated balance sheet. Finance lease expense includes

amortization of the ROU assets and interest on lease liabilities. The Group capitalizes the finance lease expense as a part of

unproved properties when the leased asset is directly involved in the drilling of wells (i.e. the finance lease expense is a

direct cost of drilling wells).

Leases with a lease term of 12 months or less are not recorded on the condensed consolidated balance sheet and are

recognized as lease expense on a straight-line basis over the lease term. When it is reasonably certain the Group will

exercise an option to extend the short-term lease beyond 12 months, the cost will be capitalized.

As a Lessor

Sublease income is recognized on a straight-line basis over the term of the sublease agreement and is recorded within

“Other expenses, net” in the condensed consolidated statements of operations and comprehensive loss.

Natural Gas Properties

The Group is in the exploration stage and hasnot yet realized any revenues from its operations. The Group holds a

number of exploration permits that are grouped into areas of interest according to geographical and geological attributes.

Expenditure incurred in each area of interest is accounted for using the successful efforts method, as defined within ASC

932, Extractive Activities – Oil and Gas.

Under this method, all general exploration and evaluation costs such as geological and geophysical costs are

expensed as incurred. The direct costs of acquiring the rights to explore, drilling exploratory wells, and evaluating the

results of drilling are capitalized as exploration and evaluation assets (as a part of unproved properties) pending the

determination of the results of the well. If a well does not result in hydrocarbons being present, the previously capitalized

costs are immediately expensed.

Note 2 – Variable Interest Entities

Tamboran (B1) Pty Ltd (“TB1”) is a 50/50 joint venture between the Company, through its wholly owned subsidiary

Tamboran (West) Pty Ltd (“TR West”), and Daly Waters Energy, LP ("DWE") governed by the amended and restated joint

venture and shareholders agreement dated June 3, 2024 (the “TB1 Joint Venture Agreement”). In assessing the primary

beneficiary of TB1, the Company determined the primary activities that most significantly impact the economic

performance of TB1 include serving as the manager, determining the strategy and direction of TB1, and the power to create

a budget.

The Company was appointed as the manager to manage and carry out day-to-day operations which supports the basis

of Tamboran as the primary beneficiary. The Company, as manager, also prepares the work plans and budget of TB1. As

such it was determined that the Company has the power to direct TB1’s activities that most significantly impact TB1’s

economic performance. As a result of the assessment performed, the results of TB1 have been included in the

accompanying condensed consolidated financial statements. TB1 hasno assets that are collateral for or restricted solely to

settle its obligations. The creditors of TB1 donot have recourse to the Group’s general credit.

The Company also assessed which party to the TB1 Joint Venture Agreement has the obligation to absorb losses or

the right to receive the benefits of the VIE that could potentially be significant to the VIE. The future profits and losses of

TB1 are shared by the Company and DWE in proportion to their respective equity interest in TB1, however, to date the

Company has contributed a greater proportion of the capital and has no ability to recoup any of the excess funding the

Company has made to TB1 from DWE and therefore has a greater exposure to absorb losses.

A loan was provided to TR West from Tamboran Resources Pty Ltd (formerly known as Tamboran Resources

Limited) ("TR Ltd."), a wholly owned subsidiary of the Company. The loan was used by TR West to acquire its interest in

TB1. On November 9, 2022, TB1 completed the acquisition of a 77.5% share of Beetaloo Basin assets, EP 76, EP 98, and

EP 117. As a result of the TB1 Joint Venture Agreement, the Company and DWE each beneficially acquired a 38.75%

interest in the permits for the total undivided interest of 77.5%. Falcon Oil and Gas Australia limited ("Falcon") holds the

remaining undivided interest of 22.5% in the assets (collectively known as the "Beetaloo Joint Venture").

On March 4, 2024, Falcon, the owner of the remaining 22.5% interest in the Beetaloo Joint Venture assets, capped its

participation to 5% in the Beetaloo Joint Venture’s second Shenandoah South well pad (“SS2”). On March 21, 2024,

Tamboran B2 Pty Ltd ("TB1 Operator") (a wholly owned subsidiary of TB1 in which the Company has a 50% interest)

agreed to pick up Falcon’s interest, increasing TB1 Operator’s working interest to at least 95% in the wells drilled from the

SS2 well pad.

The following table summarizes the carrying amounts of TB1’s assets and liabilities included in the Group’s

condensed consolidated balance sheet as of September 30, 2024 and June 30, 2024:

Note 3 – Property, Plant and Equipment & Natural Gas Properties

Natural Gas Properties

The Group held unproved natural gas properties as of September 30, 2024 and June 30, 2024, amounting to

$259,656,933 and$230,119,448, respectively. These amounts reflect the Group’s explorationand evaluation projects,

which are pending the determination of proven and probable reserves and werenot being depleted for thethree months

ended September 30, 2024, and 2023. These assets will be reclassified to proven gas properties upon commencement of

production and then subsequently depleted.

During thethree months ended September 30, 2024 and September 30, 2023, the Group recognizedno impairment

related to unproved natural gas properties.

Property, Plant and Equipment

The Group held property, plant and equipment, including leasehold improvements, as of September 30, 2024 and

June 30, 2024, amounting to$74,792 and$102,244, respectively.

Assets Under Construction

In April, 2024 the Group began to execute agreements for long lead items required for the Sturt Plateau Compression

Facility (“SPCF”) in the Beetaloo Basin. These items included essential plant components comprising of a compressor and

dehydration unit that would convert future raw gas to meet sales gas quality, subject to the terms of definitive development

agreements. During thethree months ended September 30, 2024, the Group commenced detailed design of the SPCF. The

Group held total assets under construction related to the SPCF as of September 30, 2024 and June 30, 2024 of$10,411,399

and$7,542,064 respectively.

The 40 MMcf/d SPCF is expected to be connected to the Amadeus Gas Pipeline ("AGP") via the construction of

the 35-kilometer Sturt Plateau Pipeline ("SPP") subject to achieving project milestones and executing further agreements.

Loss on Assets Classified as Held for Sale

During thethree months ended September 30, 2024, the Group had rig 403 classified as held for sale. In September,

2024, the Group entered into an exclusivity agreement with a third party for the sale of rig 403 for$8,500,000 (excluding a

sales commission of 6%). On September 30, 2024, the Group received a non-refundable advance payment of$400,000 for

a 30-day exclusivity period. As this exclusivity agreement indicated a firm offer, the Group recognized a loss on assets held

for sale of $376,000 to reduce the asset to the lower of its carrying amount and the fair value less costs to sell.

Subsequent to September 30, 2024, the Group completed the sale of rig 403. Refer to Note 13 for additional details.

Note 4 – Leases

As a Lessee

The Group’s operating lease activities consist of leases for office premises.

cing July 1, 2024, the Group entered into a new lease agreement with Drecom Pty Ltd ATF English Family Trust for their

office premises in Darwin, Australia. The term of the lease isthree years, with an option to further renew the lease fortwo

years.

Commencing October 1, 2023, the Group entered into a new lease agreement with Lendlease IMT (OITST ST) Pty

Ltd for their office premises in Barangaroo, Australia. The term of the lease isfour years, with no option to renew.

On September 9, 2022, Sweetpea Petroleum Pty Ltd (“Sweetpea”), a wholly owned subsidiary of Tamboran, entered

into a drilling contract with Helmerich & Payne International Holdings LLC ("H&P") for H&P to assist the Group in

carrying out its onshore drilling operations in Australia. The drilling contract grants Tamboran the right to use the drilling

rig from H&P over the non-cancellable contract term of 25 months starting from July 1, 2023. Under the terms of the

agreement, the Group has the right to place the drilling rig on a temporary suspension rate between wells for a period up to

270 days (the “Gap Period”). For each day of the Gap Period consumed, additional days are added to the fixed minimum

term. As of September 30, 2024, the end date of the drilling contract for the current rig is mid-July 2026. The drilling

contract is recognized as a finance lease under ASC 842 (“H&P Rig Lease”).

The present value of the minimum future obligations was calculated based on an interest rate of 13.5% p.a., which

was recognized in finance lease liabilities in the condensed consolidated balance sheet.

The following table presents the classification and location of the Group’s leases on the condensed consolidated

balance sheets:

For thethree months ended September 30, 2024, and 2023, the components of the lease costs were as follows:

The following table presents the cash flow information related to lease payments for thethree months ended

September 30, 2024, and 2023:

The following table presents supplemental information for the Group’s non-cancellable leases for thethree months

ended September 30, 2024, and 2023:

As of September 30, 2024, the Group’s undiscounted minimum cash payment obligations for its lease liabilities are

as follows:

As a Lessor

On October 15, 2023, the Group entered into an agreement with a third party to sublease its former office premises in

Manly, Australia. The commencement date of the sublease was October 1, 2023, with a lease term of 17 months. Sublease

income for thethree months ended September 30, 2024, was$81,637 and is included within “Other expenses, net” on the

Group’s condensed consolidated statements of operations and comprehensive loss. There have beenno indications of

impairment related to the underlying right-of-use asset.

Note 5 – Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses included in current liabilities consist of the following:

Note 6 – Asset Retirement Obligations

The Group recognizes the liability for an asset retirement obligation at their estimated fair value in the period in

which the obligation originates. Fair value is estimated using the present value technique (level 2) based on a number of

observable inputs including estimates and assumptions such as future retirement costs, future inflation rates and the

Group’s credit-adjusted risk-free interest rate.

The Group capitalized the present value of the estimated asset retirement obligations as a part of the carrying amount

of the related natural gas properties. The liability has been accreted to its present value forthree months ended

September 30, 2024.

The reconciliation of changes in asset retirement obligations for thethree months ended September 30, 2024, is as

follows:

Note 7 – Stockholders’ Equity

Movement in Common Stock:

July 2024 Greenshoe Option

Subsequent to the Initial Public Offering (“IPO”) in June 2024, the underwriters exercised the greenshoe option

granted to them to purchase additional shares of common stock of the Company. Under this option, underwriters purchased

a total of 308,750 shares of common stock of the Company on July 30, 2024. The net proceeds from the IPO and from the

issuance under greenshoe option will be used for natural gas exploration and appraisal activities, progressing the Group’s

three phases of development and other general corporate purposes.

Note 8 – Stock-Based Compensation

Milestone Options

During thethree months ended September 30, 2024, the Group didnot grant any new milestone options to its

employees and no milestone options were forfeited.

As of September 30, 2024, the milestone options are substantially below the current market value of the underlying

securities. As such, the Company accelerated the recognition of the remaining expense. The Group recognized$138,996

(inclusive of accelerated expense) and$268,403 as stock-based compensation expense related to milestone options for the

three months ended September 30, 2024, and September 30, 2023, respectively.

Restricted Stock Units

On August 6, 2024, the Group adopted the 2024 Incentive Award Plan (the "2024 Plan"). As of September 30, 2024,

the maximum number of shares of common stock that may be issued under the 2024 Plan was 1,600,000 shares.

The 2024 Plan, allows, among other things, for the grant of Restricted Stock Units ("RSUs"). On August 6, 2024, the

Group issued RSUs to certain eligible service providers, employees and executive officers (the “participants”) to provide

them an opportunity to participate in the growth and profits of the Group and to attract, motivate, and retain their services

to promote the long-term success of the Group.

On August 6, 2024, the Company granted 47,400 Restricted Stock Units (“Retention Awards”) to its employees in

Australia and U.S. The Retention Awards granted to Australian employees entitle them to CHESS Depository Interests

("CDIs") representing 39,250 shares of common stock (each CDI represents 1/200 th of a share of common stock).

Similarly, the Retention Awards granted to U.S. employees entitle them to 8,150 shares of common stock. The vesting

conditions state that all Retention Awards will vest in full on December 31, 2025, provided the employee remain in service

as of the vesting date. The fair value at grant date of the Retention Awards was$21.73 per common stock and$0.109 per

CDI.

On August 6, 2024, the Company also granted 795,000 Restricted Stock Units (“IPO Awards”) to its employees in

Australia and U.S. The IPO Awards granted to Australian employees entitle them to CDIs representing 620,000 shares of

common stock. Similarly, the IPO Awards granted to U.S. employees entitle them to 175,000 shares of common stock. The

IPO Awards will vest in following three tranches:

•Tranche 1 –397,500 IPO Awards granted to Australian and U.S. employees will vest in full on July 3, 2027,

provided the employee remains in service as of the vesting date. The fair value at grant date of Tranche 1 was

$21.73 per common stock and$0.109 per CDI.

•Tranche 2 –98,750 IPO Awards granted to Australian and U.S. employees will vest subject to the completion

of the Group’s Phase 1 Development Plan to establish first production of the Shenandoah South Pilot Project

and establish first production of 40 TJ/d measured by completion of the milestones (“Vesting Trigger

Conditions”). Full vesting of Tranche 2 may occur at any time between July 3, 2027, and July 3, 2029, should

the Vesting Trigger Conditions be satisfied, or unless otherwise determined by the Board of the Company. The

fair value at grant date of Tranche 2 was$21.73 per common stock and$0.109 per CDI.

•Tranche 3 –298,750 IPO Awards granted to Australian and U.S. employees will vest subject to the Company’s

Total Shareholder Return (“TSR”) reaching or exceeding the 75th percentile of the Benchmark Index TSR

between July 3, 2027, and July 3, 2029. TSR will be measured against the S&P SmallCap 600 Energy (or any

other market index determined by the Board in their sole discretion) (“Benchmark Index”) over the same

performance measurement period. The fair value at grant date of Tranche 3 was$19.64 per common stock and

$0.098 per CDI

The grant date fair value of the Tranche 3 RSUs were determined through the use of the Monte Carlo simulation

method. This method requires the use of subjective assumptions such as the price and the expected volatility of the

Company’s common stock and its self-determined peer group companies’ stock, risk free rate of return, and cross-

correlations between the Company and its peer group companies. Expected volatilities for the Company and each peer

company utilized in the model are estimated using a historical period consistent with the awards’ remaining performance

period as of the grant date. The risk-free interest rate is based on the yield on U.S. Treasury Constant Maturity for a term

consistent with the remaining performance period. The valuation model assumes dividends, if any, are immediately

reinvested.

The following table summarizes the assumptions used to calculate the grant date fair value of the Tranche 3 RSUs

granted on August 6, 2024:

The Retention Awards and IPO Awards entitle the participants to receive the equivalent value (in cash or shares of

common stock/CDIs) of dividends paid on shares of common stock and CDIs, respectively.

The RSUs are not transferable. There are no participation rights or entitlements inherent in the RSUs and the

participants will not be entitled to participate in new issues of capital offered to stockholders or holders of CDIs.

If the Company makes a bonus issue of common stock, CDIs, or other securities to existing stockholders or holders

of CDIs (other than an issue in lieu or in satisfaction of dividends or by way of dividend reinvestment), the number of

shares of common stock or CDIs that must be issued on the exercise of a Retention Award or IPO Award, respectively, will

be increased by the number of shares of common stock or CDIs that the participant would have received if the participant

had exercised the RSUs before the record date for the bonus issue.

The following table presents the stock-based compensation expense related to our RSUs for thethree months ended

September 30, 2024:

Note 9 – Income Taxes

The effective tax rates for thethree months ended September 30, 2024, and 2023 were bothnil. The Group’s

effective tax rate differed from the applicable statutory income tax rate due to operating losses incurred for thethree

months ended September 30, 2024, and 2023. The Group has accumulated losses for tax purposes as of September 30,

2024, in the amount of$290,783,210 which may be carried forward and offset against taxable income in the future for an

indefinite period, subject to meeting Australian tax rules around continuity of ownership or business continuity test.

As of September 30, 2024, and June 30, 2024, the Group didnot have any uncertain tax positions.

Note 10 – Loss Per Share

Basic net loss per share applicable to common stockholders is computed by dividing earnings applicable to common

stockholders by the weighted average number of common shares outstanding. Diluted loss per share assumes the

conversion of any convertible securities using the treasury stock method.

The computations for basic and diluted loss per share are as follows:

The Company’s potentially dilutive shares, which include outstanding milestone options and RSUs, havenot been

included in the computation of diluted net loss per share for thethree months ended September 30, 2024, and 2023 as the

result would be anti-dilutive.

Note 11 – Commitments and Contingencies

From time to time, the Group may be subject to various claims, title matters and legal proceedings arising in the

ordinary course of business, including environmental contamination claims, personal injury and property damage claims,

claims related to joint interest billings and other matters under natural gas operating agreements and other contractual

disputes. The Group maintains general liability and other insurance to cover some of these potential liabilities. All known

liabilities are fully accrued based on the Group’s best estimate of the potential settlement amount. While the outcome and

impact on the Group cannot be predicted with certainty, the Group believes that its ultimate liability with respect to any

such matters will not have a significant impact or material adverse effect on its financial positions, results of operations or

cash flows. Results of operations and cash flows, however, could be significantly impacted in the reporting periods in

which such matters are resolved.

Capital Commitments

Sweetpea

Sweetpea’s committed spend as of September 30, 2024, was$24,332,061 which was related totwo licenses, EP 136

with total commitments of$14,709,994 and EP 143 with total commitments of$9,622,067.

A renewal application for EP 136 was submitted to the Department of Mining and Energy (“DME”) (formerly the

Department of Industry, Tourism and Trade) in September 2023, and approved in July 2024, granting afive-year extension

for the period July 24, 2025 to July 23, 2030 with a minimum work program commitment of $14,709,994.

A variation application for EP 143 was submitted to DME in August 2024, and approved in October 2024. The total

minimum work program commitments remain the same at$9,622,067 with activity and associated spend being transferred

within the license term.

EP 161

For the McArthur working interest, we are obligated to contribute our share of expenses to uphold our stake in EP

161. Our commitment through March 2026 is expected to be$2,768,940 based on the minimum work requirements. There

areno minimum commitment requirements after March 2026.

Beetaloo Joint Venture

The terms of the Beetaloo Joint Venture necessitate specific minimum work obligations through May 2028. These

commitments include an expected spend of$65,463,797 related to drilling and multi-stage hydraulic fracturing offive

wells, 2D seismic survey, and subsurface studies, with expenditure across EP 76 of$22,264,007, EP 98 of$20,935,782 and

EP 117 of$22,264,008. An application was submitted to DME on September 26, 2024 to vary the year 2 and 3 work

program, and is currently pending resol ution.

Midstream

Procurement of the long lead items for the SPCF compressor package and dehydration package were placed in June

2024 with progress payments of$1,902,385 required prior to the end of 2025.

Environmental

The Group’s operations are subject to risks normally associated with the drilling, completion and production of oil

and gas, including blowouts, fires, and environmental risks such as oil spills or gas leaks that could expose the Group to

liabilities associated with these risks.

In the Group’s acquisition of existing or previously drilled well bores, the Group may not be aware of prior

environmental safeguards, if any, that were taken at the time such wells were drilled or during such time the wells were

operated. The Group maintains comprehensive insurance coverage that it believes is adequate to mitigate the risk of any

adverse financial effects associated with these risks.

However, should it be determined that a liability exists with respect to any environmental cleanup or restoration, the

liability to cure such a violation could still fall upon the Group. No claim has been made, nor is the Group aware of any

liability which the Group may have, as it relates to any environmental cleanup, restoration, or the violation of any rules or

regulations relating thereto except for the matter discussed above.

Legal Proceedings

The Group is a party to legal proceedings encountered in the ordinary course of its business. While the ultimate

outcome and impact to the Group cannot be predicted with certainty, in the opinion of management, it is remote that these

legal proceedings will have a material adverse impact on the Group’s condensed consolidated financial condition, results of

operations or cash flows.

Note 12 – Related Party Transactions

The Group transacts withtwo shareholders identified as related parties, H&P and Mr. Bryan Sheffield. The

transactions during thethree months ended September 30, 2024 are as follows.

H&P

During the year ended June 30, 2023, the Group entered into a strategic alliance with H&P and secured a

$15,000,000 equity investment from H&P (and as a consequence, a member of the H&P Executive Leadership Team was

appointed as a director of the Group). The strategic alliance resulted in H&P supporting the Group’s development plans in

NT Australia through their equity investment in the Company while at the same time executing on H&P’s strategy to gain

more international exposure through the use of drilling rigs in Australia.

On July 1, 2023, the lease commenced with H&P for the use of the FlexRig® for a 25-month period (Refer to Note

4). During the three months ended September 30, 2024, the Group incurred cost of$3,951,666, relating to a combination of

site mobilization, standby, drilling, labor and rig move costs, which remains unpaid as of September 30, 2024 in addition to

one open payable of $745,502 from June 2024.

Mr. Sheffield

During the three months ended September 30, 2024, the Group transacted with DWE, an entity controlled by

Mr. Sheffield who has been a shareholder in the Company since November 2021.

The Group and DWE maintain a 50/50 joint venture, TB1 (see Note 2 - Variable Interest Entities).

During thethree months ended September 30, 2024, DWE's share of expenditure for which contributions were due

was$5,902,678 to fund their share of costs for the Beetaloo Joint Venture. As of September 30, 2024, the Group had

unpaid cash calls owing from DWE in the amount of$3,306,021.

Note 13 – Subsequent Events

Rig 403 sale

In October 2024, the Group completed the disposal of the rig 403 at a price of$8,500,000 (of which the Group had

received$400,000 in advance during thethree months ended September 30, 2024). The Group paid sales commission of

6% on the sales proceeds in November 2024.

Research and Development ("R&D") tax claim

In October 2024, the Group lodged an amended income tax return for the year ended June 30, 2023 claiming eligible

R&D expenditure, which is expected to result in a cash refund of$6,839,963. The amount has not been recorded as a

receivable as it is not virtually certain.

SPCF

In October 2024, the Group entered into a Unit Holders and Shareholders Deed with DWE for the establishment of a

trust to be owned 50/50 by the Group and DWE to own the SPCF.

Also in October 2024, the Group signed a contract with Enscope Pty Ltd ("Enscope"), an Australian engineering

consultancy to order long lead items costing$1,976,519, required for the SPCF.

The Group has evaluated its subsequent events occurring after September 30, 2024, through November 12, 2024,

which represents the date these condensed consolidated financial statements were available to be issued. No further

subsequent events have been identified that would require disclosure in these condensed consolidated financial statements.