Stonehorse Energy Q4 Production Beats Forecasts by 24%, Revenue Falls 36%
Stonehorse Energy Limited outperformed production forecasts in Q4 2024 despite a revenue dip caused by weak natural gas prices, while advancing new project negotiations in Canada and the US.
- Canadian wells exceeded production forecast by 24%
- US portfolio production improved, notably Jewell well output more than doubled
- Revenue declined 36% from pre-drill forecasts due to low gas prices and Wapiti well underperformance
- Cash reserves increased to $6.5 million with steady operating cash flow
- Entered non-binding LOI for multi-well Canadian opportunity, with final agreement delayed to Q1 2025
Operational Outperformance in Canada
Stonehorse Energy Limited (ASX:SHE) reported a robust operational quarter ending December 31, 2024, with Canadian wells producing 29,461 barrels of oil equivalent (BOE), surpassing the forecast of 23,857 BOE by nearly 24%. This strong performance was supported by an impressive 97% production uptime. However, despite exceeding production volumes, gross revenue from Canadian assets fell 36% short of pre-drill expectations, primarily due to weaker natural gas prices and lower output from the Wapiti well.
US Portfolio Recovery and Growth
The US oil and gas portfolio also showed encouraging signs, producing approximately 49,900 BOE for the quarter. The standout was the Jewell well in Oklahoma, which rebounded from a previous quarter setback caused by adjacent drilling activities, increasing production from 9,535 BOE in Q3 to 23,153 BOE in Q4. This recovery underscores the resilience of Stonehorse’s seasoned assets despite ongoing soft natural gas prices in North America.
Financial Position and Corporate Developments
Financially, Stonehorse maintained a solid cash position, ending the quarter with $6.5 million in cash and equivalents, up from $6.3 million the previous quarter. Operating cash flow remained positive, with receipts from sales totaling $663,000. The company also held its Annual General Meeting in November 2024, where shareholders approved a change of auditors to Moore Australia, signaling a commitment to governance and transparency.
Strategic Growth Initiatives
Stonehorse is actively pursuing growth opportunities in Western Canada, focusing on oil and liquids-rich projects that promise strong returns despite low gas prices. The company signed a non-binding Letter of Intent (LOI) with a Canadian private firm to explore a multi-well oil play southeast of its current assets. However, delays in securing optimal acreage have pushed the timeline for finalising a commercial agreement into the first quarter of 2025. Additionally, negotiations are underway for enhanced oil recovery projects in Central Alberta and Southeast Saskatchewan, reflecting a strategic pivot towards value-accretive developments.
Outlook and Market Context
While natural gas prices remain subdued, Stonehorse’s focus on oil and liquids-rich assets positions it well to navigate market headwinds. The company’s diversified portfolio across Canada, the US, and Australia, with a 25% interest in the Myall Creek property in Queensland, provides multiple avenues for growth. The planned fracture stimulation at Myall Creek in Q2 2025 aligns with broader efforts to enhance production and capitalise on favourable east coast Australian gas prices.
Overall, Stonehorse Energy’s Q4 results reflect operational resilience and strategic momentum, though the impact of commodity price volatility and acreage acquisition delays warrant close attention moving forward.
Bottom Line?
Stonehorse’s production gains highlight operational strength, but upcoming acreage deals and gas price trends will shape its next growth phase.
Questions in the middle?
- Will Stonehorse secure the optimal acreage to finalise its Canadian multi-well agreement in Q1 2025?
- How will sustained low natural gas prices affect revenue and investment decisions in the near term?
- What impact will the planned fracture stimulation at Myall Creek have on Australian production volumes?
