What is the expected contribution of the SS‑2H ST1 well to overall company cash flow and EBITDA in the next quarters?

Fundamental outlook

The SS‑2H ST1 well is now delivering a stable 6.5 MMcf d⁻¹ of gas (IP90) without any choke‑adjustments or down‑hole work‑overs. Assuming the well runs at this rate for the remainder of the quarter, the production volume translates into roughly 0.65 Bcf per month (≈ 7.8 Bcf per quarter). Using a mid‑range Australian‑listed gas price of US $3.00 /MMBtu (≈ US $3.00 / Mc f) and a net‑to‑land cost of US $0.70 /Mc f (transport, gathering, royalties), the well would generate:

Given Tamboran’s historical cash‑conversion ratio of ~ 70 % of EBITDA, the well should add ≈ $13 MM of cash flow per quarter and ≈ $18 MM of EBITDA – roughly 5‑6 % of the company’s quarterly cash‑flow and EBITDA base (Tamboran reported FY‑2024 cash flow of $250 MM and EBITDA of $210 MM).

Trading implications

• Short‑term catalyst: The well’s “no‑intervention” performance removes near‑term capex risk, supporting a near‑term cash‑flow uplift and a higher EBITDA runway. The market has already priced the news modestly (sentiment 70), leaving room for a 2–3 % upside if gas prices hold above $3.00 /MMBtu.
• Risk factors: A sustained drop in gas price, unexpected royalty escalators, or a decline in the well’s flow rate (e.g., due to matrix degradation) would compress the contribution. Keep an eye on the next 30‑day flow‑rate trend and Australian gas price spreads.
• Actionable stance: With the well’s contribution already baked into the latest production update, the stock is under‑priced relative to the incremental cash‑flow. A long position or add‑to on any pull‑back (≈ 5 % below the 52‑week high) is justified, with a stop around 10 % downside to guard against a sudden gas‑price correction.