Stonehorse Energy reported steady Q2 2026 operations, with two new Drumheller wells drilled below budget and a C$3.1 million asset sale to fund further Canadian development.
- Two additional Drumheller wells drilled below budget
- Canadian and US assets generated A$1.8 million revenue
- Caroline gas assets sold for C$3.1 million to fund development
- Operating expenses aligned with expectations
- Cash and equivalents stood at A$3.86 million
Drumheller Development Accelerates with New Wells
Stonehorse Energy Limited (ASX:SHE) maintained operational momentum in Q2 2026 by safely drilling two additional development wells in the Drumheller area of Alberta, Canada. Both wells came in below budget, with completion activities ongoing as of July. The company expects to release a production performance update in late August after well flow-back and clean-up. This follows earlier successful drilling phases and supports Stonehorse’s strategy to expand its oil-weighted portfolio in Western Canada.
Revenue Boosted by Higher Oil Prices and Production
The company’s Canadian and US assets generated A$1.8 million in revenue for the quarter, benefiting from both increased production volumes and a more favourable oil price environment. The Canadian working interests produced approximately 39,934 barrels of oil equivalent (BOE), averaging 439 BOE per day, while the US portfolio contributed around 11,099 BOE or 123 BOE per day. Operating expenses across these assets remained in line with expectations, reflecting the mature nature of the US properties and steady development costs in Canada.
Asset Sale to Fund Drumheller Expansion
Stonehorse completed the sale of its gas-weighted Caroline assets in Alberta for gross proceeds of approximately C$3.1 million. The company intends to reinvest these proceeds to accelerate its Drumheller development program, which is central to its growth plans in the Western Canadian Sedimentary Basin. This strategic divestment aligns with Stonehorse’s focus on oil-weighted opportunities and optimising capital allocation across its portfolio.
Australian and US Operations Remain Steady
In Australia, Stonehorse holds a 25% working interest in the Myall Creek property in Queensland’s Surat Basin. However, planned workover and fracture stimulation activities at Myall Creek-2 and Tinowon-C are contingent on a multi-well campaign with no confirmed start date. Meanwhile, US operations continue to produce steadily from a diverse set of wells across Oklahoma and Texas, operated by partners including Black Mesa Energy and Continental Resources.
Financial Position and Outlook
Stonehorse ended the quarter with approximately A$3.86 million in cash and cash equivalents, up from A$2 million at the previous quarter’s start. The company invested around A$4 million in production and development activities during the period, with no exploration expenditure reported. Payments of A$67,000 to related parties covered director fees and executive salaries. Stonehorse’s focus remains on leveraging its Canadian assets, particularly Drumheller, to drive production growth and enhance revenue streams through the rest of 2026.
With production updates from the latest wells expected in August, the market will be watching how these developments translate into operational performance and cash flow. The company’s ability to capitalise on improving oil prices while managing costs will be critical as it navigates its multi-jurisdictional portfolio.
Bottom Line?
Stonehorse’s disciplined capital allocation and ongoing Drumheller drilling set the stage for potential production gains, but forthcoming flow-back results will be pivotal for confirming growth prospects.
Questions in the middle?
- Will the upcoming Drumheller well flow-back results sustain production growth momentum?
- How will Stonehorse balance further capital deployment between Canadian development and its other assets?
- What timing and scale can be expected for the multi-well campaign in Australia’s Surat Basin?