Tamboran Resources CorpTBN
Tamboran Resources Corp Leases Disclosure
Note 5 – Leases
The Group’s operating lease activities consist of leases for office premises.
Commencing May 24, 2025, the Group entered into a new lease agreement with Mackwell 33 Queen Pty Ltd ACN for their office premises in Brisbane, Australia. The term of the lease is five years.
Commencing 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 is three years, with an option to further renew the lease for two 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 is four years, with no option to renew.
On September 9, 2022, Sweetpea Petroleum Pty Ltd (“Sweetpea Petroleum”), 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 originally granted 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 original Gap Period consumed, and subsequent suspension periods negotiated, days are added to the fixed minimum term. As of June 30, 2025, the end date of the drilling contract for the current rig was extended through mid-April 2027. 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 12.76% p.a., which was recognized in finance lease liabilities in the consolidated balance sheet.
The following table presents the classification and location of the Group’s leases on the consolidated balance sheets:
| June 30, | |||||||||||
| 2025 | 2024 | ||||||||||
Right-of-use assets: | |||||||||||
Operating lease right-of-use assets | $ | 1,549,332 | $ | 962,052 | |||||||
Finance lease right-of-use asset | 16,543,737 | 20,697,452 | |||||||||
| 18,093,069 | 21,659,504 | ||||||||||
Lease liabilities: | |||||||||||
Current portion of operating lease obligations | 391,157 | 397,999 | |||||||||
Non-current portion of operating lease obligations | 1,175,149 | 587,250 | |||||||||
Current portion of finance lease obligation | 15,306,802 | 12,767,400 | |||||||||
Non-current portion of finance lease obligation | 9,523,433 | 14,141,713 | |||||||||
| $ | 26,396,541 | $ | 27,894,362 | ||||||||
The following table presents the components of the lease costs as of June 30, 2025 and 2024:
| For the years ended June 30, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
Operating leases: | ||||||||||||||
Operating lease cost charged to profit and loss | $ | 521,640 | $ | 497,734 | ||||||||||
Finance lease: | ||||||||||||||
| Interest on lease liability | 3,019,718 | 3,132,380 | ||||||||||||
| Depreciation on right-of-use asset | 9,613,425 | 11,406,679 | ||||||||||||
| Total finance lease cost | 12,633,143 | 14,539,059 | ||||||||||||
| Less: Lease cost capitalized to unproved properties | (12,633,143) | (14,539,059) | ||||||||||||
| Finance lease cost charged to profit and loss | $ | — | $ | — | ||||||||||
The following table presents the cash flow information related to lease payments for the years ended June 30, 2025 and 2024:
| For the years ended June 30, | |||||||||||
| 2025 | 2024 | ||||||||||
Cash paid for amounts included in the measurement of lease liabilities: | |||||||||||
Operating cash flows for operating leases | $ | 521,640 | $ | 497,734 | |||||||
Financing cash flows for finance leases | 7,765,972 | 5,470,379 | |||||||||
| $ | 8,287,612 | $ | 5,968,113 | ||||||||
The following table presents supplemental information for the Group’s non-cancellable leases for the years ended June 30, 2025 and 2024:
| For the years ended June 30, | |||||||||||
| 2025 | 2024 | ||||||||||
Operating leases: | |||||||||||
| Weighted-average remaining lease term | 3.8 | 2.7 | |||||||||
| Weighted-average incremental borrowing rate | 10.49 | % | % | 10.46 | % | ||||||
| Finance lease: | |||||||||||
| Weighted-average remaining lease term | 1.8 | 2.1 | |||||||||
| Weighted-average incremental borrowing rate | 12.76 | % | % | 13.45 | % | ||||||
As of June 30, 2025, the Group’s undiscounted minimum cash payment obligations for its lease liabilities are as follows:
| As of June 30, 2025 | Operating leases | Finance leases | |||||||||
| Fiscal year ending June 30, 2026 | $ | 536,865 | $ | 16,109,152 | |||||||
| Fiscal year ending June 30, 2027 | 555,859 | 11,297,000 | |||||||||
| Fiscal year ending June 30, 2028 | 338,850 | — | |||||||||
Thereafter | 474,665 | — | |||||||||
Total lease payments | 1,906,239 | 27,406,152 | |||||||||
Less: Imputed interest | (339,933) | (2,575,917) | |||||||||
Present value of lease liabilities1 | $ | 1,566,306 | $ | 24,830,235 | |||||||
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 “Manly Lease”). The commencement date of the sublease was October 1, 2023, with a lease term of 17 months. The Manly Lease, and sublease expired on March 10, 2025 with no renewal. Sublease income for the year ended June 30, 2025 and 2024, was $234,860 and $230,038, respectively, and is included within “” on the Group’s consolidated statements of operations and comprehensive loss. There have been no indications of impairment related to the underlying right-of-use asset.
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.