Stonehorse Energy is advancing its Canadian footprint with a CAD 1.85 million investment in the second well of a promising three-well program in Alberta’s Drumheller area, targeting production start in early Q2 2026.
- Stonehorse invests CAD 1.85 million for 35% interest in Drumheller #2 well
- Well targets high-growth Ellerslie Reservoir with strong liquids production
- Drilling commenced 24 February 2026, production expected early Q2 2026
- Option to participate in two more wells under similar terms
- Strategy focuses on partnering with basin experts to expand Western Canada presence
Stonehorse Deepens Commitment in Drumheller
Stonehorse Energy Limited (ASX: SHE) has announced its participation in the second well of a three-well drilling program in the Drumheller area of Alberta, Canada. The company will invest CAD 1.85 million to secure a 35% working interest in the well, known as Drumheller #2, which began drilling operations on 24 February 2026. This move follows the success of the initial Drumheller #1 well, which exceeded expectations and set a positive precedent for the program.
Targeting a High-Quality Reservoir
The Drumheller #2 well is targeting the Ellerslie Reservoir, a prolific zone known for its light oil production and high liquids ratio. The reservoir currently produces over 40,000 barrels of oil equivalent per day, with liquids comprising 77% of that output and an impressive 18% annual growth rate since 2017. The well’s planned measured depth is 4.7 kilometres, including a 3.2-kilometre lateral section, drilled from an existing well pad with established facilities, which should enable a swift transition to production and sales.
Strategic Growth and Future Opportunities
Stonehorse’s Executive Chairman, Robert Gardner, emphasised the strategic importance of this investment, highlighting the company’s intent to partner with basin experts and expand its footprint in Western Canada. Beyond Drumheller #2, Stonehorse holds rights to participate in two additional wells under the same terms, each requiring a similar investment of approximately CAD 1.85 million for a 35% working interest. The operator behind the program has identified over 80 potential new well locations, offering significant upside potential should the partnership continue to deliver strong results.
Operational and Market Implications
With first production from Drumheller #2 anticipated in early Q2 2026, Stonehorse is positioning itself to benefit from near-term cash flow and production growth. The company’s approach of acquiring working interests that reflect its risk appetite and capital availability aligns with a measured growth strategy in a competitive energy market. However, the success of these wells will depend on operational execution and commodity price dynamics, factors that remain outside the company’s direct control.
Looking Ahead
Stonehorse’s ongoing investment in the Drumheller program signals confidence in the region’s resource potential and the operator’s capabilities. As drilling progresses and production data emerges, market participants will be watching closely to assess how these developments translate into financial performance and shareholder value.
Bottom Line?
Stonehorse’s Drumheller expansion marks a pivotal step in its Canadian growth story, with early production and further drilling options on the horizon.
Questions in the middle?
- How will commodity price fluctuations impact the economics of the Drumheller wells?
- What are the timelines and conditions for exercising options on the additional two wells?
- How might Stonehorse’s partnership with the operator evolve amid the 80-plus potential well locations?