Presented by:

Oil and Gas Investor


In early April 2020, Oil and Gas Investor reached out to Dick Stoneburner: “We’re looking for anonymous, fully unfiltered thoughts on the oil and gas industry in the midst of this commodity price collapse. Who might do this?”

Oil and Gas Investor September 2021 Executive Q-A - The Unmasked Oilman - Dick Stoneburner
“What Tamboran is uniquely situated to do is to provide what very well could be a high-volume resource with time.” —Dick Stoneburner, Tamboran Resources Ltd.

The idea was to focus on what every oilman might be thinking at the time—a representation, rather than featuring just one’s thoughts. Stoneburner replied, “I’ll do it.”

The result was the May-issue article, “The Masked Oilman,” the most-clicked article at HartEnergy.com in 2020.

We decided to check back with Stoneburner for a 2021 update.

In the business for more than four decades now, beginning as a wildcatting geologist, Stoneburner is now chairman of Australian shale developer Tamboran Resources Ltd. while continuing as a senior advisor to Pine Brook Road Partners. He was a co-founder, president and COO of startup Petrohawk Energy Corp. and, after its $15.1 billion sale to BHP Group Ltd., was BHP head of North American shale.

Joining Stoneburner on the board at newly public Tamboran (pronounced “tam-boar-an”) is Fred Barrett, co-founder of Bill Barrett Corp.

Tamboran’s management team includes CEO Joel Riddle, formerly an executive at Cobalt International Inc., and COO Faron Thibodeaux, who was general manager of Apache Corp.’s Australian business unit.

Did the oil and gas industry exit the market disaster of 2020 better than in 2019? “I don’t know if I would say ‘better.’ I don’t think we’re any worse. I think you could say we’re better in the sense that we’ve had another two years to ‘get the message,’” Stoneburner said.

That message to oil and gas producers is to focus on returning cash flow to investors and focus less on production growth. “That’s an easy lesson to speak; it’s a harder lesson to learn,” he added.

But “it’s honestly probably an easier route than the treadmill that we were on—looking for 25% production growth and trying to find the capital to do it. It’s not really all that smart. But that’s what we were told [by shareholders] to do during my time at Petrohawk.”

The industry’s pause during 2020 “probably made the whole model of returning capital to shareholders our first and foremost objective.

“I think we, as an industry, have done that and, therefore, I would then kind of back up and say, ‘Yeah, I think we are a better industry because of that.’”

Here’s more from Stoneburner as well as a look at the shale gas opportunity for Tamboran


Oil and Gas Investor September 2021 Executive Q-A - The Unmasked Oilman Alexa Sanders illustration

“The key here too in Tamboran’s net-zero CO₂ vision is that Tamboran doesn’t have any facilities yet. We are starting with a clean slate. Every facility we build will be focused on minimizing methane leaks, have the ability to sequester carbon whenever possible and utilize any and all renewable sources for field operations.”


Investor: Early April 2020 versus July 2021. What’s your outlook now?

Stoneburner: Given the number of vaccinations, there’s just not the same level of risk now. I’d like to think it’s largely behind us. In the spring of 2020, there was great concern—with good reason—that it could take several years or more to get the disease—then, the economy and our industry—under control.

We got a vaccination in relatively short order. It’s been a real testament to science, the government, the private sector and the medical community. Politics aside, I think we ought to be pleased with where we are.

The demand for our products has basically returned.

Investor: The RBL [reserve-based lending] banks that quit: Will they return? Many are still holding the bag.

Stoneburner: RBLs are a little bit of an albatross these days. Many companies still have them, and we’ll still have them in the future. The banks have had to create lifelines that allowed companies to have more duration—to just extend the company and allow them time to get back on their feet, back to drilling and getting cash flow to where it was.

The banks have done a pretty good job of giving enough of a lifeline. There were certainly a lot of bankruptcies. I would venture to say there were probably not as many as the market might’ve thought we’d have.

Today, there are still some circumstances out there where the lenders and borrowers are having to continue that effort.

Investor: You said that the May 2020 WTI contract would go to zero. That happened. And it fell to less than zero. Were you shocked? 

Stoneburner: Well, the negative $37 was just a financial situation. You had people [at closing] who just didn’t have enough buyers of those contracts. People were just having to get rid of them. While it’s very newsworthy and historic, it was a one-day event.

But it doesn’t diminish the fact that it was really $20 a barrel—the weighted average—during that period. I mean, nobody was making any money.

Investor: You’re chairman now of Tamboran, focused on Australian natural gas for in-country use and LNG export. Natural gas seems to have a great future even if without the transition to blue and green fuels.

Stoneburner: No doubt. We still have [U.S.] domestic supply to tap as we need it. And the LNG supply is continuing to grow—almost at breakneck speed.

And that’s a great thing because it’s a worldwide commodity. We need to get it to developing nations. We need to get it to people who don’t have a source of energy to help improve quality of life.

What Tamboran is uniquely situated to do is to provide what very well could be a high-volume resource with time. This is going to supply not only the Australian domestic market, but it’s perfectly situated to provide the Asia-Pacific region with much more competitive LNG. It is only a three-day trip to Singapore and nine days to Tokyo from Australia. It looks like a world-class resource in a pretty good spot of the world. Given that Australia is a free-market economy and an OECD country, the resource is clearly advantaged. And it’s low-CO₂ natural gas.

It’s a gas resource that could really make a difference in that part of the world.

Oil and Gas Investor September 2021 Executive Q-A - The Unmasked Oilman - Tamboran Resources Wells Location Map
Tamboran’s natural gas target is 2% to 3% CO₂ and just a few-day tanker trip to Singapore and Tokyo.

Investor: Speaking of what it “looks like,” you were at a Core Lab program in 2007 when you saw a core sample Encana [Corp.] pulled in 2006 from the Haynesville Shale. You immediately recognized the Haynesville held incredible resource. How did the Tamboran sample from the Beetaloo/McArthur Basin compare?

Stoneburner: That’s a great question. Tamboran logged their #1 Tanumbirini, the vertical discovery for the field, while I was visiting them in Sydney in 2014. I looked at the log and, about a year later, saw the core analysis from Core Lab and the report from Netherland Sewell [& Associates] on the resource potential.

The long and short of it is that, from a purely petrophysical standpoint and an original gas in place standpoint, this resource is comparable to the best resources in North America.

It became apparent to us—and I think it’s becoming more apparent to not only the Australian E&P community, but to the Australian government—this really has the potential to change the game for the country in terms of a supply that they can count on.

It’s much like the supply that North America has counted on in all the different gas basins—from the Montney to the Haynesville to the Marcellus—that have just basically changed the whole dynamic of North American gas supply.

Investor: Would Tamboran be interested in owning U.S. natural gas resources, but those are simply all owned up already?

Stoneburner: We’re an Australia-listed public company that is hyper-focused on our asset in the Beetaloo. So we really don’t want to be distracted by working on two continents.

The advantaged proximity of Tamboran’s asset can’t be overlooked. We are about 500 kilometers from the Darwin LNG facility. We also have the Gladstone LNG facility in Queensland, north of Brisbane. Both are operated by our partner, Santos Ltd.

The proximity of those two facilities to vast markets in Southeast Asia is incredible.

We also have a JV with Jemena, one of the largest pipeline operators in Australia. It recently built a pipeline perfectly located to help us commercialize the resource when we’re ready to deliver the volumes.

As long as we can make the resource competitive and drive down the costs like producers in the U.S.—getting it of the ground on an F&D [finding and development] basis, then simply on the cost of transportation on the water—we should be much more competitive than the LNG that the U.S. is supplying.

Investor: And compared with Middle Eastern LNG?

Stoneburner: Now [the Middle Eastern suppliers’] F&D is hard to beat. And that’s the challenge we will have.

But, if we prove this resource to be commercial, that’s going to be the proof that this is truly a competitive resource for the Australian market and, more broadly, Asia-Pacific.

Investor: You mentioned Tamboran’s gas prospect is low CO₂.

Stoneburner: The gas is only 2% to 3% CO₂. It’s a fraction of what most natural gas has in Australia.

The key here too in Tamboran’s net-zero CO₂ vision is that Tamboran doesn’t have any facilities yet. We are starting with a clean slate. Every facility we build will be focused on minimizing methane leaks, have the ability to sequester carbon whenever possible and utilize any and all renewable sources for field operations.

That’s how we will achieve net zero. We’re starting from a point without any old facilities. The facilities will have net-zero standards from day one.

So the combination of a very low CO₂ resource and the ability to manage carbon and to use renewables, we feel like we can be a net-zero producer in a relatively short order.

Investor: Good point. You’re starting from “2021 and beyond” standards.

Stoneburner: No baggage at all.

Investor: Tamboran was drilling its first horizontal this summer.

Stoneburner: We’re participating in two wells with Santos this year with a 25% interest. The first one, the drilling is completed; we’re drilling the second one now. They both should be flow-tested by early fourth quarter. We’re going to drill our first operated well in the first half of 2022.

We were drilling the first horizontal while we were completing our IPO. What I think the market embraced—as much as the market can embrace a non-revenue energy IPO—was the fact that we will be putting these dollars to work into this resource that the government, the industry and Australia fully recognize as probably the most exciting opportunity the country has to create a significant gas resource, not only for domestic use, Natural gas is becoming widely accepted as a bridge fuel to a world with lower emissions. And Australia has a chance to join the list of countries that can help make that happen.