The American gas frackers who got government grants, threatened journalists and snubbed a senate inquiry have shifted control of Tamboran to US secrecy jurisdiction Delaware. Callum Foote reports.
Beetaloo Basin gas fracking company Tamboran Resources has notified the ASX of its intention to re-domicile to Delaware in the United States, a jurisdiction known for corporate secrecy and tax avoidance.
A new corporation Tamboran US HoldCo, will be established and become the parent company of the group while Tamboran maintains its existing ASX listing.
Along with fellow speculative Northern Territory fracker Empire Energy, Tamboran shares have languished on the ASX this year, leading to speculation their drilling programs have technical problems and that the promise of lavish gas export revenues from the proposed Middle Arm petro-port in Darwin may never be realised.
There is growing opposition to the Middle Arm project with both farmers and Northern Territory environment groups up in arms over the potential damage to farmlands and the climate from fracking to NT’s Beetaloo Basin. If the project were to proceed, Australia’s carbon emissions are projected to rise by as much as 20%.
Gas fracking has been banned in many countries, but not in Australia or the US.
Tamboran said the reason for the move in corporate control was to better position the company in “a deeper capital market in the United States where sale investors are more active” as well as to improve the company’s “access to lower-cost US debt and equity capital markets”.
It follows a report which revealed poor early stage drilling results at Tamboran’s Amungee 2H exploratory fracking well in the Beetaloo Basin in the Northern Territory.
However, oil and gas opposition groups told MWM the purpose of the move to Delaware was to reduce scrutiny and oversight by investors in Tamboran Group.
Frack Free NT spokesperson Phil Scott said it was unsurprising the company planned to move to a tax secrecy jurisdiction in the United States.
Does it pass the pub test?
“There is massive public opposition to fracking in the NT, the Beetaloo is a very remote place, making operations very expensive, and there are early signs to suggest Tamboran is not delivering the results it expected. No wonder it wants to relocate to a known tax secrecy jurisdiction in America,” he said.
“While Tamboran’s planned move to Delaware is not illegal, I don’t think it would pass a Territory pub test. It will be far harder for the Australian public to scrutinise Tamboran’s corporate activity if it is successful in delisting.”
Tamboran is no stranger to secrecy. In 2021, the Senate Inquiry into fracking in the Northern Territory heard Sweetpea Petroleum, now a subsidiary of Tamboran, was previously owned by a US investment firm that had created a shell company, Longview Petroleum LLC, in Delaware.
Tamboran Resources chief executive Joel Riddle refused to attend that Senate Inquiry, which then moved to refer the company to an in-house parliamentary watchdog to investigate whether it was in contempt of the Senate for refusing to attend the hearing.
The company was also the subject of a complaint to corporate regulator ASIC by finance analyst Bruce Robertson who found that data the company used to promote its float on the ASX was two years out of date.
Squire Patton Boggs legal threats
Robertson was threatened with legal action, along with this publication. Subsequently, the company provided updated data to shareholders.
Michael West Media’s reporting on a statement made to ASIC about the misleading prospectus was met with a legal threat from Tamboran’s lawyer Masi Zaki, a partner at firm Squire Patton Boggs.
Zaki wrote that “in the event you do not take the Article down from the internet such that our client suffers any consequent loss or damage, our client will not hesitate to take appropriate recourse including against you [the reporter] personally.”
Usually, defamation threats are aimed at the publication but in this case the reporter (author of this story) was targeted by Squire Patton Boggs too.
Following initial threats, MWM was again threatened by Tamboran’s lawyers Squire Patton Boggs over coverage of the company. this time from Squire lawyers Sarah Roper and Ashley Rose.
While he was reticent to face the Senate Inquiry, Tamboran chief Joel Riddle had been active making public appearances in defence of his company and has been critical of government decisions.
Riddle was quick to deny Greens leader Adam Bandt’s claims that the Safeguard Mechanism would kill off development of gas projects in the Beetaloo Basin saying that Bandt’s claims were false.
“The Greens have claimed these amendments restrict the Beetaloo Basin’s development. This is 100 percent wrong,” Riddle told the AFR. “Tamboran’s progressive sustainability plan was and is doing everything called for in these amendments. This is a decisive political failure for the Greens who have campaigned to destroy industry, jobs and real progress on emission reductions.”
There have also been calls for Tamboran to return the $7.5 million taxpayer grant it received from the Federal Government last year before it shifted to Delaware in the USA, a known tax secrecy jurisdiction.
Pay it back
“At the bare minimum, Tamboran ought to pay back the taxpayer cash it was granted by the previous Federal Government,” said Frack Free NT spokesperson Phil Scott.
Tamboran’s fracking of the Beetaloo, along with American driller Empire Energy, is also a vital component in feeding gas to the government’s $1.5 billion subsidised Middle Arm petrochemical precinct in the Port of Darwin according to experts.
Northern Territory Environment Centre mining and gas strategist Naish Gawen told MWM that “we think that of the five projects that have been announced for the precinct, most are pretty speculative and not close to happening, except for Tamboran’s gas processing facility”.
“[Tamboran has] a site at the precinct and plans for an LNG processing facility, which would be bigger than the current INPEX and Darwin LNG processing facilities”.
Tamboran’s Port of Darwin facility is still early stages, as the precinct itself still needs to pass its environmental approvals but once that is done the company would need to get a licence to construct the facility.
However, with the full backing of the Federal and Northern Territory Government’s it seems likely that the Port of Darwin petrochemicals precinct will go ahead.