Stonehorse Energy Advances Canadian Growth Amid Operational Hurdles
Stonehorse Energy Limited reported steady Q2 2025 results, driven by strong Canadian production despite lower commodity prices and operational setbacks in the US. The company also announced a strategic board appointment as it pursues growth opportunities.
- Canadian operations exceed production forecasts but face price headwinds
- US production steady but impacted by maintenance and a resolved pipeline leak
- Strong cash position of approximately AUD6.4 million maintained
- Board refresh with Nicholas Ong appointed as Non-executive Director and Company Secretary
- Active pursuit of business development and M&A opportunities in Canada
Operational Performance and Financial Health
Stonehorse Energy Limited (ASX, SHE) has delivered a steady operational performance for the quarter ending 30 June 2025, underpinned by its Canadian assets outperforming production expectations. The company’s Canadian wells generated approximately 24,304 barrels of oil equivalent (BOE), with the Caroline Hz 103 well notably exceeding forecasts by 15%, producing 258 BOE per day. However, despite this operational success, lower oil and gas prices tempered cash flow, resulting in AUD555,000 generated from Canadian operations; below initial forecasts.
Meanwhile, the US portfolio produced around 50,000 BOE, aligning with expectations but experiencing temporary setbacks. Production was curtailed due to maintenance work on the Burgess 28-1 well and a leak in a pipeline affecting the Jewell well. Both issues have since been resolved, with production expected to return to prior levels. The US operations contributed approximately AUD321,000 in production revenue for the quarter.
Corporate Developments and Governance
Stonehorse maintains a robust cash position, closing the quarter with about AUD6.4 million in cash and equivalents, supporting ongoing investment in growth initiatives. Operating expenses remained stable across the group, reflecting disciplined cost management in Canada, the US, and Australia.
On the governance front, the company announced a board change with the resignation of Jay Stephenson and the appointment of Nicholas Ong as Non-executive Director and Company Secretary. Ong brings extensive expertise in listing compliance and corporate governance, signaling Stonehorse’s commitment to strengthening its oversight as it navigates expansion.
Strategic Focus and Outlook
Stonehorse’s strategic emphasis remains on expanding its footprint in the Western Canadian Sedimentary Basin through traditional investments in non-operated drilling and work-over opportunities. The business development team is actively engaged in multiple potential partnerships and M&A deals, aiming to finalize arrangements in the first half of FY2026. The company views the current challenging price environment as an opportune moment to invest and grow its Canadian portfolio.
In Australia, Stonehorse holds a 25% interest in the Myall Creek-2 asset in Queensland’s Surat Basin. The company is awaiting clarity on the status of the farm-in agreement and upcoming remediation plans following recent changes within the asset operator.
Looking ahead, Stonehorse anticipates capital and operating expenditures in the coming quarter will align with its strategy to support new production opportunities, particularly in Canada. No reportable events have occurred since the quarter’s end, leaving the company well-positioned to execute its growth plans.
Bottom Line?
Stonehorse’s solid Canadian production and strategic governance moves set the stage for growth, but watch for how US operational recovery and Australian asset clarity unfold.
Questions in the middle?
- How will Stonehorse’s Canadian M&A initiatives impact production and cash flow in FY2026?
- What timeline and outcomes can investors expect for the Australian Myall Creek-2 farm-in agreement?
- Will US production fully recover post-maintenance and pipeline repairs, and how might this affect revenue stability?
