A new report warns there are financial risks of getting stuck in the Beetaloo Basin. 

In a critical assessment of the Beetaloo Basin's shale gas reserves, economists from the Institute for Energy Economics and Financial Analysis (IEEFA) have flagged the venture as a potentially massive financial sinkhole for both investors and Australian taxpayers. 

The institute has issued a report scrutinising the economic viability of tapping into what is considered one of the world’s most promising shale resources, claiming it remains commercially unproven.

The report, ‘Beetaloo a $10bn pipe dream for gas producers’ (PDF), challenges the optimism surrounding the Beetaloo Basin in the Northern Territory. 

Despite not having produced any commercial gas to date, the field has attracted significant taxpayer-funded infrastructure investments, predicated on its speculated success. 

Kevin Morrison, IEEFA’s Energy Finance Analyst for Australian Gas, notes the substantial infrastructure needs due to the basin's remoteness. 

Processing and transporting gas, especially to the east coast of Australia, is anticipated to necessitate an investment exceeding $10 billion for the NTLNG project. 

Morrison’s analysis casts doubts on the economic value of these projects, pointing out their high cost, risk, and the uncertain nature of returns.

Further complicating the situation is the exit of several large players from the basin, leaving behind a trio of smaller companies: Tamboran Resources, Empire Energy, and Falcon Oil and Gas. 

These firms, described as junior explorers, are pressing ahead with plans to commercialise the reserves during a glut in the global LNG market. 

Morrison specifically critiques the financial outlook of Tamboran Resources, a company which has seen its share price halve since its 2021 listing on the ASX due to multiple share issues aimed at funding its operations. 

Despite raising over $365 million from investors and spending more than $300 million on exploration, Tamboran has not produced any commercial gas, reflecting the speculative nature of its Beetaloo venture.

Tamboran's strategy to secure additional funding through a US listing in Delaware is highlighted as potentially contentious, given the state's corporate anonymity rules. This move, along with the extensive taxpayer support for the project, raises questions about transparency and the financial soundness of the investment for Australian stakeholders.

Morrison's report ultimately calls for a reassessment of public financial support for the development of the Beetaloo Basin and the associated Middle Arm Sustainable Development Precinct.