Stonehorse Energy Limited (ASX: SHE), an Australian-based exploration and production company focused on onshore oil and gas in Canada and the United States, has announced significant operational and strategic developments. The company aims to build a portfolio of high-quality well bore assets with working interest percentages reflecting risk appetite and capital availability. Stonehorse has agreed to participate in a second phase of four new development wells in the Drumheller Area near Calgary, Alberta, following the successful completion and production of the initial four-well program. Concurrently, the company also reported the divestment of a non-core asset.
The decision to proceed with the phase two Drumheller program, in partnership with the same operator, comes after the strong performance of the initial four wells, which are now successfully on production. Stonehorse is set to invest approximately C$8.0 million into these four new wells. These proposed wells are situated in an area known for light oil production with a high liquids ratio, similar to the first phase. The target remains the Ellerslie Reservoir, which currently produces over 40,000 barrels of oil equivalent per day, with liquids accounting for 77% of this volume. The spudding of well #5 is slated to commence imminently.
In a strategic move to refine its production portfolio, Stonehorse Energy has divested a 26.25% working interest in land and production near Sundre, Alberta. This transaction generated C$3.05 million in cash, with the proceeds designated for general corporate purposes. Following this sale of a natural gas property, Stonehorse’s production profile is anticipated to be strongly weighted towards oil and liquids, a strategy further bolstered by the light oil focus of the Drumheller program. Executive Chairman, Mr Robert Gardner, commented, “We are extremely pleased with the results from the first four Drumheller wells. Stonehorse will continue to participate in further opportunity to partner with a strong operator for high impact and quick payback wells in Western Canada.”
