Tamboran Resources Corporation (ASX: TBN) shares are tumbling on Thursday after returning from a trading halt.
In early afternoon trade, the Tamboran share price is down a massive 17.46% to 26 cents, following a major funding update.
The move stands out even more given the stock remains up 60% over the past 12 months, driven by rising confidence in its Beetaloo Basin gas plans.
Today’s sell-off suggests investors are weighing the dilution from the capital raise against the company’s next phase of growth.
Let’s take a closer look.
Big capital raise completed as trading resumes
According to the release, Tamboran has completed the US public offer and institutional entitlement component of its latest equity raise.
The company secured gross proceeds of US$103 million from the underwritten public offer, equivalent to roughly $147.1 million. This was alongside a further $86 million through the institutional entitlement offer.
That lifts funds already locked in to about $233 million, with the retail entitlement offer still to come. Eligible retail holders can subscribe for 1 new CDI for every 20 held at 25 cents each, with the offer closing on 27 April.
With the new CDI’s priced well below the last traded price of 31.5 cents before the halt, the market now has a clear short-term pricing reference.
Tamboran said the proceeds will be used to fund additional drilling in the Pilot Area and drilling in EP 161. Funds will also go toward further resource delineation across the Orion acreage and Beetaloo Central Development Area, as well as working capital and general corporate purposes.
Management says Beetaloo buildout is accelerating
Chief executive officer Joel Riddle said the raise supports what is expected to be the company’s busiest development phase yet.
Management said the funds should support Beetaloo Basin operations through to 2028, including lifting capacity above the contracted 40 terajoules a day.
The company also said first gas sales remain targeted for the September quarter of 2026, alongside continued appraisal work across its acreage.
That gives investors a clearer view of what the dilution is funding and which commercial milestones are coming next.
Foolish takeaway
The discounted raising appears to be the main reason for the sell-off, though broader market weakness is also adding pressure today.
A discounted raising of this size will often weigh on the share price in the short term, especially after such a strong 12-month run.
Even after the 17% drop, Tamboran remains up 60% over the past year, which shows investors are still backing the Beetaloo growth opportunity.
The next thing to watch is whether the newly funded drilling program can keep first gas timelines and development momentum on track.
The post Why this ASX energy stock just crashed 17% after a blockbuster year appeared first on The Motley Fool Australia.
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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.