Macquarie Bank is bullish on this Australian energy stock

Mon 16 Jan 23, 12:30pm (AEST)
An image of an outback sealed road in remote Australia, Northern Territory
Source: Unsplash

Key Points

  • Macquarie Bank expects 2023 to be “pivotal” for companies in QLD’s shale gas-heavy Beetaloo Basin
  • The bank has today put its weight behind Tamboran Resources
  • Macquarie sees a chance for 40% Total Shareholder Return (TSR) with a share price target of 35cps

Macquarie Bank expects 2023 to be a “pivotal” year for shale gas frackers in the Northern Territory’s Beetaloo Basin

As just one example, the bank has thrown its support behind energy midweight Tamboran Energy (ASX:TBN) in a research note released on Monday. 

Macquarie sees TSR of 40% for shareholders if they buy today, with the bank whacking a 12-month, 35c target price on Tamboran.

As at 11:50am AEST Monday 16 January 2023, Tamboran’s share price sits at 24.5c. 

The company’s shares are currently 39% below its IPO price of 40c in 2021. 

Beetaloo to out-do Perth Basin 

Worth noting: Macquarie highlighted open report data from the NT Geological Survey, which supports the thesis that gas volumes trapped in the Beetaloo basin are multiples higher than that found in the prolific Perth Basin

The result of Tamboran’s Amungee-2H flow test, which will measure initial gas volumes returned to surface from the newly completed well, will be closely watched by Macquarie and other stakeholders. 

These results are expected to land in March or April 2023, drilling concluded last month. 

The bank is also bullish on Tamboran due to an expansion of its acreage at Beetaloo, the development of which is supported by both the Northern Territory Government in Darwin, as well as the Feds in Canberra.

In September last year, Tamboran picked up half of Origin Energy’s Beetaloo assets. 

US billionaire shale investor Bryan Sheffield also took interest to the tune of $60m. 

5 million square cubic feet the magic number 

The bank notes flow rates over 5 million square cubic feet per day (5MMscf/d) will likely lead to an upward re-rating. 

The first Amungee well, Amungee-1H, was extrapolated to boast flow rates up to 5.8MMscf/d based on a 200m column.

There is a caveat for an upward re-rating: A-2H flow rates must be substantiated per 1,000m. 

However, that consideration basically encapsulates the entire well, given that its lateral span (fracking wells typically drill horizontally) sits at 1,275m. 

All in all, Macquarie is waiting to see if A-2H will replicate the results logged from A-1H. 

Tamboran Resources' three month charts
Tamboran Resources' three month charts


Written By

Jonathon Davidson

Finance Writer

Jonathon is a journalism graduate and avid market watcher with exposure to governance, NGO and mining environments. He was most recently hired as an oil and gas specialist for a trade publication.

Get the latest news and insights direct to your inbox

Subscribe free