As the U.S. shale oil and gas revolution took off two decades ago, Australia took notice and wondered whether the boom could be replicated down under.

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In September, the effort began to pay off, thanks to the arrival of American oilmen. The first commercial natural gas deliveries from the Beetaloo Basin started flowing to the energy-hungry Northern Territory. The potential is far greater, and little-known Tamboran Resources and Daly Waters Energy had to clear years of roadblocks to get here.

Sydney startup Tamboran first hired an American ExxonMobil and Chevron veteran as its CEO in 2013. In 2014, Texas oil legend Scott Sheffield joined the board of Aussie natural gas player Santos. He was intrigued by the prospect of bringing shale drilling and fracking expertise to the outback, particularly the sparsely populated reserve with a peculiar name: the Beetaloo Basin.

Sheffield saw the Beetaloo’s upside, and its similarity to the Appalachia’s Marcellus Shale. He brought it to the attention of his son, Bryan, also a Texas oil CEO. Bryan was interested but too busy taking his company, Parsley Energy, public. A few months later, shale pioneer Aubrey McClendon took a small land position in the Beetaloo and Bryan read about it.

“I just remember feeling deflated,” Bryan Sheffield told Fortune. “He got into the Beetaloo really early and cheap. I remember thinking to myself, ‘He’s just running circles around me.’”

McClendon died in a car accident a year later, and more setbacks would soon befall the basin. Amid the global pushback to fracking, the Northern Territory imposed a moratorium from 2016 to 2018. Santos and others had drilled with limited results but couldn’t replicate the American formula. COVID-19 then tanked global exploration budgets and most companies’ interest in the Beetaloo. Parsley suffered in the pandemic and was sold to Scott’s company, Pioneer Natural Resources, for $4.5 billion. Two years ago, ExxonMobil bought Pioneer for $60 billion, the largest U.S. oil deal of the century.

After the pandemic, Bryan Sheffield’s top geologist from Parsley again raised the Beetaloo. This time, Sheffield, armed with his own startup private equity firm, Formentera Partners, took the lead.

“This play keeps coming up. This is three times,” Bryan Sheffield said. It felt like a sign.

After investing heavily in the small Aussie gas players, Tamboran and Beetaloo Energy, Sheffield also started his own Australian subsidiary, Daly Waters Energy.

Fast forward four years, partners Daly Waters and Tamboran announced the first natural gas sales ever from the Beetaloo in September. The milestone shows the basin can deliver, but it still must prove it can become economic over the long term.

“This is a total gamechanger,” Sheffield said. Five wells are now ramping up. “We created revenue. This whole time, the past five years, we have not had $1 coming back to us.”

The timing matters, both for the money-losing companies and for Australia, which could face natural gas shortfalls in the coming years. The U.S., Australia, and Qatar are by far the top liquefied natural gas exporters. Qatar is largely offline now because of the Iran war, and more of Australia’s offshore gas fields are drying up. The answer may lie onshore, in Beetaloo shale.

Sheffield’s capital influx was critical, but so was recruiting top American oilfield services players with shale expertise. Drilling leader Helmerich & Payne (H&P), tools and services giant Baker Hughes, and fracking leader Liberty Energy—the company cofounded by U.S. Energy Secretary Chris Wright—all took ownership stakes in Tamboran. Beetaloo Energy recently contracted with Halliburton.

“Applying the American [fracking] recipe to another country is the way forward,” Sheffield said. A newly built pipeline and gas processing plant now move the gas. “The big problem was the lack of service companies and infrastructure. Talking the service companies into moving into this play was key to unlocking it.”

“It’s kind of like in that movie, ‘Field of Dreams,” he added. “’If you build it, they will come.’”

The Liberty Energy fracking spread at the drilling program of Tamboran Resources and Daly Waters Energy in Australia’s Beetaloo Basin.Formentera Partners

A basin that long defied drillers

A 1979 minerals drilling program triggered an accidental gas blowout in the Beetaloo. That drew the attention of U.S. oil and gas power Amoco, later acquired by BP, which drilled a test well in 1984. It came up dry. Others tried and failed too, despite survey data showing the basin’s gassy potential.

That was still 20 years before U.S. shale operators would crack the code for shale rock with the right mix of horizontal drilling and slickwater fracking. Slickwater uses a mix of water, sand, and thin, friction-reducing chemicals rather than thicker gels to shatter dense shale rock deep underground and free the gas.

In 2008, in Texas, geologist and Petrohawk Energy cofounder Dick Stoneburner—a great name for a shale rock expert—helped pioneer drilling and fracking and led the discovery of the Eagle Ford Shale oil boom in South Texas. Three years later, Australian mining giant BHP bought Petrohawk for $12 billion as its entry into U.S. shale. Stoneburner was contractually required to assist with the transition, which brought him to Australia.

Once free of his BHP obligation, he was recruited to Tamboran’s board in 2014. That was the year Santos drilled its first Beetaloo test well using modified shale techniques. The results were modest and didn’t wow investors, but they remained promising.

“I got intrigued,” Stoneburner told Fortune. “Santos had limited shale experience, really none. They had a big learning curve.”

Stoneburner saw Santos’ flaws and, eventually, so did Bryan Sheffield. The wells needed wider diameters (wider casing) and slickwater fracking, not gelled fluids, to sustain enough pressure to produce ample gas flows. That required equipment available only in the U.S.

“This is when I knew the play was going to work. They just weren’t doing it right,” Sheffield said. They discovered Australian rigs could only accommodate smaller diameters. “That’s when I knew I had to talk a rig company into moving horizontal rigs to Australia.”

The pitch was easier than expected. Coming out of the pandemic, services companies had excess equipment and were eyeing growth. H&P shipped a high-specification rig, Chris Wright’s Liberty brought a fracking fleet, and Baker Hughes supplied tools and services. “It’s not off-the-shelf stuff. So it’s all worked out very, very well,” Stoneburner said.

Sheffield was first impressed by the detailed report on the Beetaloo put together by his former geologist, Tom Layman. After the pandemic, he was put in touch with Stoneburner. They knew of each other but hadn’t met in person. Sheffield then met Tamboran’s CEO at the time, Alabama native Joel Riddle.

Rather than only invest in Tamboran, Sheffield bought stakes in Beetaloo Energy and Falcon Oil & Gas, which was acquired by Tamboran earlier this year. He also formed Daly Waters.

“He was ready to go,” Stoneburner said, surprised by Sheffield’s speed and aggressiveness.

Origin of the domino

The largest acreage holder in the Beetaloo was Australian utility Origin Energy. It lacked shale experience and had no clear plan for the land. Under investor pressure to decarbonize and avoid fracking, Origin weighed selling.

In 2022, Tamboran, flush with Sheffield’s capital, pounced. The group acquired Origin for just over $40 million, plus a portion of future royalties, and became the basin’s top player. Sheffield and Stoneburner credit Riddle with getting the deal done.

“Origin was a really huge domino to fall,” Stoneburner said.

“We split the deal because it was too much for [Tamboran] to take on alone, and I kind of just paid out of my family office,” Sheffield elaborated. Tamboran and Formentera-backed Daly Waters essentially halved the acreage, and Sheffield forming a joint venture on Tamboran’s operations. Today he controls nearly 10% of Tamboran stock.

Formentera’s usual strategy is “singles and doubles” in mature U.S. shale basins, and Sheffield’s early Australian equity stakes followed that approach. The Origin deal changed that.

“I knew my investors would not like the Beetaloo because there’s a lot of risk,” Sheffield said. “The pension funds and the endowments, they did not invest. It was just too risky for them. The Beetaloo is the home run product, and it’s more tailored toward family offices.”

Since the Origin deal closed, Tamboran and Daly Waters have brought in their services partners to Australia, built a pipeline and processing facility, finished early permitting, and developed the pilot project, Shenandoah South. It is now finally online and poised to ramp up. Daly Waters plans to add a second H&P rig next year.

Japan’s INPEX became a major investor early this year, supporting the eventual gas supply to Australia’s LNG facilities serving Japan and the rest of Asia, especially INPEX’s Ichthys LNG hub in northwestern Australia. Tamboran also is a joint venture partner with Santos, which operates two LNG facilities the Beetaloo could supply: Darwin LNG and Gladstone LNG.

Last year, Tamboran made a change and removed Riddle as CEO, naming Stoneburner interim CEO. Scott Sheffield joined the board at the same time. He had served only three years on Santos’ board. Riddle is rightfully credited with building Tamboran up, but he also clashed with partners.

“I was there to help mend relationships,” Stoneburner said, which led to Tamboran’s Falcon acquisition.

In January, Tamboran hired Houston-based Todd Abbott—a 15-year veteran under Scott Sheffield’s Pioneer and a friend of Stoneburner. Bryan Sheffield also backed the move. “I was trained as an oilman underneath Scott Sheffield and his people, and Todd Abbott is the exact same,” he said. “We come from the same learning curves.”

Abbott read last year’s news of Stoneburner’s interim role and sent a text. “He just replied back, ‘We should talk,’” Abbott told Fortune.

Formentera Partners and Daly Waters founder Bryan Sheffield crouches over a map of the liquefied natural gas export facilities in Australia that gas from the Beetaloo Basin could service.Formentera Partners

At the starting line

Abbott’s most fun years were the “grow, grow, grow” days of the Permian Basin’s early shale oil boom at Pioneer. Now, he said, U.S. shale is about, “How do I get another penny out of it?” each day. Tamboran offers a chance to build a pioneering position in a basin again, a “once-in-a-lifetime opportunity.”

“First production is the really big milestone,” Abbott said of the Beetaloo. “But it’s certainly not the finish line. It’s more of the starting line.”

The Beetaloo’s rock closely resembles the Marcellus Shale of Pennsylvania and West Virginia, though the Beetaloo is 1.3 billion years old versus the Marcellus’ nearly 400 million.

Early well results are promising, Abbott said, but more are needed in the coming weeks and months to attract new investors and partners. Tamboran admits it needs a larger partner to keep scaling. Its stock is up more than 25% this year, but a new auditor’s report still flags its financial viability as a “going concern.” It isn’t profitable yet and is only now booking first revenue. “We’re out looking for the right strategic partner for the long term,” Abbott said.

Production is ramping up to 40 million cubic feet of gas per day. The plan is to grow to 100 million in 2028, once a gas-processing expansion is complete. The goal after that is more drilling and another pipeline by 2030. That would supply more Australia domestic gas beyond the Northern Territory and feed LNG exports. Until now, the territory has relied on emergency contracts with LNG exporters for gas-fired electricity.

“Once it’s fully connected, the Beetaloo is multiple times large enough to supply the Australian domestic market. It takes care of the expected shortage,” Abbott said. “But to really get this basin up to the scale, it needs LNG export access.”

Australian entrepreneur Patrick Elliott founded Tamboran in 2009 and remains on the board, but the Beetaloo quickly became an American-Aussie venture. “Seventeen years is a long time, but there was a lot of work to do, and it’s accelerating now,” Abbott said. “It’s an exponential curve, and you’re starting to see real traction.”

Nothing has underscored the Beetaloo’s potential this year more than the Iran war, which has kept Qatar’s LNG exports largely offline. That leaves the the world, especially Asia-Pacific, heavily dependent on U.S. and Australian LNG, and Australia will need more natural gas to ship. “It has focused everyone on the need for diversifying,” Abbott said. “Supply chains are critical, and energy security is national security.” He added that Australia can supply Asia more cheaply than the U.S. because of shorter shipping distances.

About 75% of Australia’s natural gas production is offshore, which limits growth. The rest was onshore coalbed methane, or coal seam gas, and those resources aren’t in growth mode either.

“There are really not a lot of other sources of this scale in the Asia-Pacific that can do it,” Abbott said. “I think it really put eyes on Australia and on the Beetaloo at a pretty critical moment for us.”

This story was originally featured on Fortune.com

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