Stonehorse Q1: Canadian Wells Produce 319 BOE/Day, US Output Rises to 50,201 BOE

• Canadian wells produced 319 BOE/day, exceeding forecast by 12%
• Gross Canadian production revenue fell 29% due to lower oil and gas prices
• US portfolio output improved to 50,201 BOE for the quarter
• Cash receipts totaled $438,000 with $6.67 million in cash and equivalents
• Increased focus on Canadian acquisitions and corporate transactions

Operational Performance Exceeds Expectations in Canada

Stonehorse Energy Limited (ASX:SHE) reported a robust operational quarter ending 30 March 2025, with its Canadian wells delivering production above forecast. The company’s Canadian assets generated approximately 319 barrels of oil equivalent (BOE) per day, surpassing the forecasted 284 BOE. This outperformance was largely driven by strong results from the Caroline well, which maintained an impressive 97.6% uptime throughout the quarter.

Despite this production strength, gross revenue from Canadian operations declined by 29% compared to the forecast, reflecting the impact of weaker oil and gas prices during the period. This divergence underscores the ongoing challenge for producers balancing volume gains against volatile commodity markets.

US Operations Show Signs of Recovery Amid Operational Challenges

In the United States, Stonehorse’s portfolio of 11 operating wells produced approximately 50,201 BOE for the quarter, marking an improvement over the previous quarter. This uplift was primarily attributed to the recovery of the Jewell well, which had been adversely affected by drilling activities on an adjacent third-party well in late 2024.

However, production from the Burgess 28-1 well was curtailed due to a workover required to address paraffin build-up, temporarily shutting in a well that historically contributed around 800 BOE per quarter. This operational hiccup highlights the maintenance demands inherent in mature oil and gas assets.

Strategic Business Development Accelerates in Canada

Stonehorse has intensified its business development efforts in Canada, allocating additional resources to identify and execute accretive opportunities amid a volatile commodity environment. The company is broadening its acquisition scope beyond new drilling and workover wells to include corporate transactions involving existing production and drilling inventories.

Managing Director David Deloub emphasized the strategic approach to navigating market uncertainty, balancing acquisition price multiples against reduced cash flow from softer commodity prices, while remaining mindful of capital requirements to maintain acreage positions. These initiatives signal Stonehorse’s intent to leverage market dislocations to build a stronger asset base.

Financial Position and Outlook

Stonehorse reported cash receipts from sales of $438,000 for the quarter, ending with $6.67 million in cash and cash equivalents, including $350,000 in listed shares. Operational and exploration expenditures totaled $220,000 and $22,000 respectively, reflecting disciplined capital management.

The company’s Australian asset, a 25% working interest in the Myall Creek gas project in Queensland’s Surat Basin, remains poised for development with operator ADZ Energy planning combined fracs in the second half of 2025, supported by favourable east coast gas prices.

No material events have occurred since the quarter’s end, and Stonehorse continues to monitor market conditions closely as it pursues growth opportunities.

Bottom Line?

Stonehorse’s strategic focus on Canadian acquisitions amid commodity price volatility could define its growth trajectory in 2025.

Questions in the middle?

• How will Stonehorse balance acquisition costs with cash flow constraints in a volatile commodity market?
• What is the expected timeline for Burgess 28-1 well’s return to full production post-workover?
• Could Stonehorse’s expanded business development scope lead to significant portfolio changes this year?