Highlights

Highlights

• Stonehorse Energy reported A$3.166 million in cash at 30 September 2026, after investing outflows exceeded operating inflows during the quarter.

• Eight producing wells at the Drumheller project delivered 563 barrels of oil equivalent per day by quarter end.

• The company completed the sale of its US Lone Star interests to Brookside Energy, banking roughly US$1.114 million in cash.

• Stonehorse (ASX:SHE) shareholders received notice of the company's Annual General Meeting in a filing lodged on 21 October 2026.

Stonehorse Energy (ASX:SHE) used its September 2026 quarterly Cash Flow report, lodged on 29 October, to show the market exactly where its pivot away from US oil Assets and towards its Canadian Drumheller project now stands, and the headline numbers tell a story of a smaller, more production-focused company still working through the costs of that transition.

From Texas to Alberta

Stonehorse (ASX:SHE) Energy is a small-cap oil and gas company that has spent the past year narrowing its focus to the Drumheller project in Alberta, Canada, a multi-well development targeting the Ellerslie reservoir.

Holding Brookside shares alongside the Drumheller wells also leaves Stonehorse (ASX:SHE) with some residual exposure to how the US interests perform under new ownership.

Drumheller Production Ticks Along

By 30 September 2026, Stonehorse had eight wells on production at Drumheller, delivering a combined 563 barrels of oil equivalent per day at the end of the quarter and averaging 438 barrels of oil equivalent per day across the three months.

Those figures mark the company's first full quarter reporting production entirely from the Canadian asset base, now that the US interests have been sold.

The Cash Position

Operating activities generated A$1.372 million in net cash inflow, but investing activities absorbed A$2.026 million, a figure softened by A$1.572 million of disposal proceeds likely linked to the Lone Star sale.

Net of financing activity, cash still declined over the quarter, underlining how much of Stonehorse's current spending is going into Drumheller development rather than being funded purely from field cash flow.

What Investors Should Weigh

A declining cash balance against rising production is not automatically a warning sign for a company in development mode, but it does mean Stonehorse will need either sustained production growth, further cost discipline, or additional funding to keep progressing Drumheller without returning to shareholders.

Oil-weighted production from a modest well count also means Drumheller's Economics are sensitive to prevailing crude prices, so any material move in benchmark oil pricing would flow fairly directly into the project's cash generation.

Looking Ahead

Key dates to watch include the outcome of the annual general meeting, the December 2026 quarterly cash flow report, which will show whether the Drumheller wells have lifted output further, and any update on how the Brookside Energy shares received as part of the Lone Star sale are being managed.

Further drilling or workover activity at Drumheller, should it be announced, would also be a signal that management sees enough running room in the field to justify reinvesting scarce cash there.

Key Insights

Drumheller is now central to Stonehorse Energy’s operating profile. Production levels and positive Operating Cash Flow need to be assessed alongside Capital spending, Commodity prices and the company’s cash balance.