Announcement PDF Stonehorse Energy Limited ABN 13 086 972 429 Annual Report - 30 June 2026 Stonehorse Energy Limited Corporate directory 30 June 2026 1 Directors Mr Robert Gardner, Executive Chairman Mr Michael McFadyen, Non-executive Director Mr Nicholas Ong, Non-executive Director Mr Rick Lu, Non-executive Director Company secretary Mr Nicholas Ong Registered office Suite 4, 182 Claisebrook Road Perth WA 6000 Postal address PO Box 52 West Perth WA 6872 Principal place of business Suite 4, 182 Claisebrook Road Perth WA 6000 Telephone +61 (0)8 6141 3500 Facsimile +61 (0)8 6141 3599 Email: info@stonehorseenergy.com.au Share registry Computershare Registry Services Level 17, 221 St Georges Terrace Perth WA 6000 1300 787 272 (investors within Australia) +61 8 9323 2000 Auditor Moore Australia Audit (WA) Level 15, Exchange Tower, 2 The Esplanade Perth WA 6000 Stock exchange listing Stonehorse Energy Limited shares are listed on the Australian Securities Exchange (ASX code: SHE) Website www.stonehorseenergy.com Stonehorse Energy Limited Review of operations 30 June 2026 2 Review of operations Operational Highlights ➢ The combined production from Stonehorse’s Canadian working interests in oil and gas wells was 100,441 BOE during the year, for a daily average of 283 BOE over that period. This does not reflect two (2) of the Drumheller wells drilled in fiscal 2025/26 that were brought on production in August 2026 for an additional combined average daily production of approximately 225 BOED. o In the last six months of fiscal 2025/26 compared to the last six months of fiscal 2024/25 ▪ Revenue was up 156% ▪ Liquids ratio increased from 53% to 72% ▪ Realized price per BOE increased from $25.67 to $63.96 ➢ US operations are consistent with a mature portfolio of producing assets. The US oil and gas well portfolio produced approximately 53,872 BOE during the year for what is now seasoned production. ➢ Negotiations progressing on potential participation in multi well opportunities with a target investment decision in 2Q FY27 with details to follow. Operations review Stonehorse is committed to its corporate strategy of building a portfolio of high-quality oil and gas production assets with working interest percentages reflecting risk appetite and capital availability. Canadian Assets Stonehorse Canada (SCC) continues to execute on its strategic plan with participation in the oil weighted Drumheller development. The company is also reviewing other oil weighted opportunities in the Western Canadian Sedimentary Basin. During fiscal year, Stonehorse Canada Corporation (SCC) participated in six (6) successful wells, all in the Drumheller area of Alberta. Four (4) of these wells were brought onstream prior to year end and two (2) wells were brought on production in August, 2026. With the existing robust price environment, SCC continued this pace into FY27, participating in two (2) additional wells in the Drumheller area during fiscal Q1 FY27. The Company plans to participate in additional wells throughout FY27. Stonehorse is pleased to announce the disposition of its gas-weighted Caroline assets, effective May 1, 2026 for gross proceeds of C$3,114,199.75. The proceeds from this sale are being used to accelerate the Company’s Drumheller development program. Figure 1. Location of the Drumheller Area located in central Alberta, CA. Drumheller Area Stonehorse Energy Limited Review of operations 30 June 2026 3 ll Name Reference Number Working Interest County State Operator Stonehorse, Canada Wapiti 16-02-65-08 18.75% Wapiti, Alberta Gryphon PetroleumCorp Drumheller #1 20% Drumheller, Alberta PrivateOperator Drumheller #2 35% Drumheller, Alberta PrivateOperator Drumheller #3 35% Drumheller, Alberta PrivateOperator Drumheller #4 35% Drumheller, Alberta PrivateOperator Table1.Current Portfolio of(non-operated)working interests in Canada. U.S. Assets The Stonehorse (SHE) U.S. oil and gas well portfolio continued to deliver seasoned production, however sustained soft natural gas prices in North America impacted total net operating revenues. The Company’s Jewell well in Oklahoma, USA delivered approximately 2,869 BOE per month for Stonehorse and was its best performing asset in the US portfolio. Well Name Reference Number Working Interest County, State Operator Stonehorse, United States of America Burgess 28-1 96.81% Ellis, Oklahoma BlackMesa Energy Sutton 2H-52 25.00% Hansford, Texas Strat Land Exploration Bullard 1-18-07UWH 15.60% Gravin, Oklahoma Rimrock Resources Henry Federal 1-8-5XH 2.30% Blaine, Oklahoma Continental Resources Randolph 1-34-27XHM 0.21% Blaine, Oklahoma Continental Resources Randolph 3-34-27XHM 0.21% Blaine, Oklahoma Continental Resources Randolph 4-34-27XHM 0.21% Blaine, Oklahoma Continental Resources Jewell 1-13-12SXH 41.50% Carter, Oklahoma BlackMesa Energy Newberry 12-1 21.70% Carter, Oklahoma BlackMesa Energy Mitchell 12-1 50.00% Carter, Oklahoma BlackMesa Energy Thelma 1-32 50.00% Murray, Oklahoma BlackMesa Energy Table2.Stonehorse (Lone Pine)Portfolio of(non-operated)working interests in the United States. These US assets were subsequently sold by the Company. Refer to announcement dated 2 September 2026. Australian Assets Stonehorse has a 25% Working Interest in the Myall Creek property located in the Surat Basin, Queensland. Stonehorse has been advised Myall Creek-2 workover and Tinowon-C fracture stimulation is only feasible as part of a campaign. ADZ will be reviewing the data and notify Stonehorse of the next step for Myall Creek-2. Well Name Reference Number Working Interest County State Operator Stonehorse, Australia MyallCreek Myall Creek-2 25% Surat Basin, Qld ADZ Energy Pty Ltd Table3.Current Portfolio of(non-operated)working interests in Australia. About Stonehorse Energy Stonehorse Energy Limited (ASX:SHE) is an Australian ASX listed oil and gas exploration and production company which has working interests in several producing oil and gas assets located in Texas and Oklahoma, in the USA and Alberta in Canada. Stonehorse’s overall objective is cashflow accretive by building a portfolio of working interests in high quality producing well bore assets delivering a return on investment to its shareholders. Stonehorse Energy Limited Directors' report 30 June 2026 4 The directors present their report, together with the financial statements, on the consolidated entity (referred to hereafter as the 'Group') consisting of Stonehorse Energy Limited (referred to hereafter as the 'Company' or 'parent entity') and the entities it controlled at the end of, or during, the year ended 30 June 2026. Directors The following persons were directors of Stonehorse Energy Limited during the whole of the financial year and up to the date of this report, unless otherwise stated: Robert Gardner Executive Chairman Michael McFadyen Non-Executive Director Nicholas Ong Non-Executive Director Rick Lu Non-Executive Director (appointed 5 February 2026) David Deloub Executive Director (resigned 4 September 2025) Principal activities The Group is an Australian based Exploration and Production (E&P) energy company. Its overall objective is to implement its strategy of building a portfolio ofgeographically andgeophysically diverse, highquality well bore assets with Working Interest (WI) percentages reflecting risk appetite and capital availability. Company secretary Nicholas Ong, appointed 17 June 2025 Dividends There were no dividends paid, recommended or declared during the current or previous financial year. Company Specific Risks Oil and Gas exploration and development risks The business of oiland gas exploration, project development and production, by its nature, is highly speculative and contains elements of significant risk with no guarantee of success. Ultimate and continuous success of these activities is dependent on many factors such as: - the discovery and/or acquisition of economically recoverable reserves; - access to adequate capital for project development; - design and construction of efficient development and production infrastructure within capital expenditure budgets; - securing and maintaining title to interests; - obtaining consents and approvals necessary for the conduct of oil and gas exploration, development and production; and - access to competent operational management and prudent financial administration, including the availability and reliability of appropriately skilled and experienced employees, contractors and consultants. Whether or not income will result from projects undergoing exploration and development programs depends on successful exploration and establishment of production facilities. Factors including costs, actual hydrocarbons and formations, flow consistency and reliability and commodity prices affect successful project development and operations. Oil and gas exploration may involve drilling operations and exploration activities which do not generate a positive return on investment. This may arise from dry wells, but also from wells that are productive but do not produce sufficient revenues to return a profit after accounting for drilling, operating and other associated costs. The production from successful wells may also be impacted by various operating conditions, including insufficient storage or transportation capacity, or other geological and mechanical conditions. In addition, managing drilling hazards or environmental damage and pollution caused by exploration and development operations could greatly increase the associated cost and profitability of individual wells. There is no assurance that any exploration on current or future interests will result in the discovery of an economic deposit of oil or gas. Even if an apparently viable deposit is identified, there is no guarantee that it can be economically developed. Stonehorse Energy Limited Directors' report 30 June 2026 5 Operational Risks Oil and gas exploration and development activities involve numerous operational risks, including encountering unusual or unexpected geological formations, mechanical breakdowns or failures, human errors and other unexpected events which occur in the process of drilling and operating oil and gas wells. The occurrence of any of these risks could result in substantial financial losses to the Company due to injury or loss of life, damage to or destruction of property, natural resources or equipment, environmental damage or pollution, clean-up responsibilities and regulatory investigation, amongst other factors. Damages occurring to third parties as a result of such risks may give rise to claims against the Company which may not be covered fully by insurance or at all. Sovereign risks The Company’s key project interests are situated in North America. Accordingly, the Company is subject to the risks associated in operating in foreign countries. These risks include economic, social or political instabilities or change, hyperinflation, currency non- convertibility or instability and changes of law affecting foreign ownership, government participation, taxation, working conditions, rates of exchange, exchange control, exploration licensing, export duties, repatriation of income or return of capital, environmental protection, labour relations as well as government control over natural resources or government relations that require the employment of local staff or contractors or require other benefits to be provided to local residents. Contractual and Joint Venture Risk The Directors are not able to presently assess the risk of financial failure or default by a participant in any joint venture to which the Company is, or may become, a party or the insolvency or other failure by any of the contractors engaged by the Company for any exploration or other activity. Any such failure or default could adversely affect the operations and performance of the Company and the value of the Shares. Industry risk Oil and Gas Reserves and Production Estimates Oil and Gas Reserves and production estimates are expressions of judgement based on knowledge, experience and industry practice. Estimates which were valid when originally calculated may alter significantly when new information or techniques become available. In addition, by their very nature, resource estimates are imprecise and depend to some extenton interpretations which may prove to be inaccurate. As further information becomes available through additional fieldwork and analysis the estimates are likely to change. This may result in alterations to development plans which may, in turn, adversely affect the Company’s operations and the value of the Shares. Commercial Risk The oil and gas exploration industry is competitive and there is no assurance that, even if commercial quantities of those resources is discovered by the Company on its current projects or future projects it may acquire an interest in, a profitable market will exist for sales of such resources. There can be no assurance that the quality of any such resources will be such that they can be extracted economically. Commodity Price Volatility and Exchange Rate Risks If the Company achieves success leading to oil and gas production, the revenue it will derive through the sale of resources it may discover exposes the potential income of the Company to commodity price and exchange rate risks. Commodity prices fluctuate and are affected by many factors beyond the control of the Company. Such factors include supply and demand fluctuations for oil and gas, technological advancements, forward selling activities and other macro-economic factors such as inflation expectations, interest rates and general global economic conditions. Furthermore, international prices of various commodities are denominated in United States dollars whereas the income and expenditure of the Company are and will be taken into account in Australian currency. This exposes the Company to the fluctuations and volatility of the rate of exchange between the United States dollar and the Australian dollar as determined in international markets. If the price of commodities declines this could have an adverse effect on the Company’s exploration, development and possible production activities, and its ability to fund these activities, which may no longer be profitable. Stonehorse Energy Limited Directors' report 30 June 2026 6 Insurance Risks Exploration for and development of oil and gas involves hazards and risks that could result in the Company incurring losses or liabilities that could arise from its operations. If the Company incurs losses or liabilities which are not covered by its insurance policies, the funds available for exploration and development will be reduced and the value and/or title to the Company’s assets may be at risk. The Company insures its operations in accordance with industry practice. However, in certain circumstances the Company’s insurance may not be of a nature or level to provide adequate insurance cover. The occurrence of an event that is not covered or fully covered by insurance could have a material adverse effect on the business, financial condition and results of the Company. Insurance against all risks associated with oil andgas exploration and production is not always available and, where available, the costs canbe prohibitive or not adequate to cover all claims. Commercialisation The Company’s potential future earnings, profitability, and growth are likely to be dependent upon the Company being able to successfully implement some or all of its commercialisation plans. The Company’s ability to doso is further dependent upon a number of factors, including matters which may be beyond the control of the Company. The Company may not be successful in securing identified customers or market opportunities. The Company’s ability to sell and market its production will be negatively impacted in the event it is unable to secure adequate transportation and processing. Access will depend on the proximity and capacity of pipelines and processing facilities. Furthermore, the Company maybe required to develop its own pipeline infrastructure or secure access to third party pipeline infrastructure in order to deliver oil and gas to key markets or customers, or to directly deliver gas to key markets or customers. The development of its own pipeline infrastructure will be subject to the Company obtaining relevant approvals including pipeline licences. General investment risks General Economic Conditions General economic conditions, introduction of tax reform, new legislation, the general level of activity within the resources industry, movements in interest and inflation rates and currency exchange rates may have an adverse effect on the Company’s exploration, development and possible production activities, as well as on its ability to fund those activities. Volatility in Global Credit and Investment Markets Global credit, commodity and investment markets may experience uncertainty and volatility. The factors which may lead to this situation are outside the control of the Company and may impact the price at which the Shares trade regardless of operating performance and affect the Company’s ability to raise additional equity and/or debt to achieve its objectives, if required. Government and Legal Risk The introduction of new legislation or amendments to existing legislation by governments (including introduction of tax reform), developments in existing common law or the respective interpretation of the legal requirements in any of the legal jurisdictions which govern the Company’s operations or contractual obligations, could impact adversely on the assets, operations and ultimately the financial performance of the Company, or the Shares. The same adverse impact is possible by the introduction of new government policy or amendments to existing government policy, including such matters as access to lands and infrastructure, compliance with environmental regulations, taxation and royalties. Financial position As at 30 June 2026, the Group's cash and cash equivalents decreased by $1,438,155 from $5,277,388 at 30 June 2025 to $3,839,233 and had working capital of $6,764,317 (June 2025: $7,006,266). Significant changes in the state of affairs Other than referred to in the section of Review of Operations, there were no significant changes in the state of affairs of the Group during the financial year. Matters subsequent to the end of the financial year On 2 September 2026, the Company announced that it had sold its US oil and gas interests to Brookside Energy Limited ("Brookside") for approximately US$1.114 million, including cash and the transfer of 7.5 million shares in the Company held by Brookside. No other matter or circumstance has arisen since 30 June 2026 that has significantly affected, or may significantly affect the Group's operations, the results of those operations, or the Group's state of affairs in future financial years. Stonehorse Energy Limited Directors' report 30 June 2026 7 Likely developments and expected results of operations The Company is actively pursuing business development in the Western Canadian Sedimentary Basin, focusing on non-operated drilling, work-over wellbore investments, and potential corporate M&A opportunities. The team is working on several opportunities simultaneously. Despite a challenging price environment, the Company views this as a favourable time to invest and expand its Canadian operations. However, there is no guarantee that these opportunities will result in completed transactions or deliver the anticipated outcomes. Environmental regulation The Group’s operations are subject to environmental regulations in relation to its exploration activities. The Directors are not aware of any outstanding breaches. The Directors have considered the enacted National Greenhouse and Energy Reporting Act 2007 (the NGER Act) which introduced a single national reporting framework for the reporting and dissemination of information about the greenhouse gas emissions, greenhouse gas projects, and energy use and production of corporations. At the current stage of development, the Directors have determined that the NGER Act has no effect on the Group for the current, nor subsequent, financial year. The Directors will reassess this position as and when the need arises. Information on directors Name: Robert Gardner Title: Executive Chairman Experience and expertise: Mr Gardner is a Perth based business proprietor, with over 30 years' experience in the mining industry. Mr Gardner has developed a number of projects that are now major assets of ASX listed companies and has extensive experience in the China region. Mr Gardner is also a major shareholder in the Company. Other current directorships: Dragon Mountain Gold Limited Former directorships (last 3 years): None Interests in shares: 39,500,000 Interests in options: Nil Interests in rights: Nil Name: Michael McFadyen Title: Non-Executive Director Experience and expertise: Mr McFadyen brings over three decades of experience in the oil and gas industry, spanning both offshore and onshore exploration and production (E&P). His career highlights include 24 years in global offshore operations and12 years in North American onshore projects. Notably, he served as Executive Vice President Offshore at Murphy Oil Corporation, where he oversaw a significant increase in U.S. Gulf of Mexico operations, boosting net production from 18 MBOEPD to 85 MBOEPD. Starting his career with Texaco E&P in1991, Mike held various roles in operational andproject management before joining Murphy Oil in 2002 as Drilling Manager. He led major projects, such as the Kikeh Deepwater Development, and eventually became Executive Vice President of EXPRO in 2011. Mr McFadyen holds a Bachelor of Science in Petroleum Engineering from the University of Wyoming and has completed advanced management programs at Harvard Business School and Kellogg Business School. His leadership is further established through his involvement with key industry boards and committees. Other current directorships: None Former directorships (last 3 years): None Interests in shares: 16,000,000 Interests in options: Nil Interests in rights: 5,000,000 Stonehorse Energy Limited Directors' report 30 June 2026 8 Name: Nicholas Ong Title: Non-Executive Director Experience and expertise: Mr Ong brings 20 years’ experience in IPO, listing rules compliance and corporate governance. He is experienced in mining project finance, mining and milling contract negotiations, mine CAPEX & OPEX management, and toll treatment gold reconciliation. Nicholas is a Fellow of the Governance Institute of Australia and holds a Bachelor of Commerce and a Master of Business Administration from the University of Western Australia. Nicholas is currently a Company Secretary of several ASX listed companies. Other current directorships: Beroni Group Limited, CFOAM Ltd, Everflow Resources Limited, Flexiroam Limited, Nelson Resources Limited Former directorships (last 3 years): White Cliff Resources Limited, Helios Energy Limited, Vonex Limited, Miepay Limited Interests in shares: Nil Interests in options: Nil Interests in rights: Nil Name: Rick Lu Title: Non-Executive Director Experience and expertise: Mr. Lu is a highly accomplished financial executive with over 30 years of experience in the energy and mining sectors, bringing extensive expertise in all aspects of corporate and financial management. Throughout his career, he has provided strategic and financial advisory services, as well as corporate administration support, to a wide range of international enterprises. Mr. Lu has successfully managed due diligence processes, acquisitions, staffing, and post-acquisition integrations, and has held senior leadership positions with several globally operating companies. He holds a Bachelor of Commerce degree from the University of Toronto and an MBA and PhD from the University of Windsor, Canada. Other current directorships: Nil Former directorships (last 3 years): Nil Interests in shares: 5,180,000 Interests in options: Nil Interests in rights: Nil Name: David Deloub (resigned 4 September 2025) Title: Executive Director Experience and expertise: Mr Deloub has over 30 years of experience in the finance and corporate sectors and holds a degree in economics and post graduate qualifications in banking and finance. Mr Deloub was a director of Patersons Capital Partners, a boutique advisory firm focusing on strategic and financial advice to ASX listed small cap companies. He has considerable corporate finance, business development, management and operational experience in Australia, the United States and Africa. Other current directorships: None Former directorships (last 3 years): None Interests in shares: 10,000 (at the date of resignation) Interests in options: Nil Interests in rights: 12,000,000 (lapsed 4 September 2025) 'Other current directorships' quoted above are current directorships for listed entities only and excludes directorships of all other types of entities, unless otherwise stated. 'Former directorships (last 3 years)' quoted above are directorships held in the last 3 years for listed entities only and excludes directorships of all other types of entities, unless otherwise stated. Stonehorse Energy Limited Directors' report 30 June 2026 9 Meetings of directors The number of meetings of the Company's Board of Directors ('the Board') held during the year ended 30 June 2026, and the number of meetings attended by each director were: Number eligible to attend Number attended Michael McFadyen 2 2 Nicholas Ong 2 2 Rick Lu 1 1 David Deloub - - Held: represents the number of meetings held during the time the director held office. Shares under option There were no unissued ordinary shares of Stonehorse Energy Limited under option outstanding at the date of this report (2025: Nil). No person entitled to exercise the options had or has any right by virtue of the option to participate in any share issue of the Company or of any other body corporate. Shares issued on the exercise of options There were no ordinary shares of Stonehorse Energy Limited issued on the exercise of options during the year ended 30 June 2026 and up to the date of this report. Indemnity and insurance of officers The Company has indemnified the directors and executives of the Company for costs incurred, in their capacity as a director or executive, for which they may be held personally liable, except where there is a lack of good faith. During the financial year, the Company paid a premium in respect of a contract to insure the directors and executives of the Company against a liability to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits disclosure of the nature of the liability and the amount of the premium. Proceedings on behalf of the Company No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the Company, or to intervene in any proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the Company for all or part of those proceedings. Non-audit services There were no non-audit services provided during the financial year by the auditor. Auditor's independence declaration A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out immediately after this directors' report. Remuneration report (audited) The remuneration report details the key management personnel remuneration arrangements for the Group, in accordance with the requirements of the Corporations Act 2001 and its Regulations. Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly, including all directors. Stonehorse Energy Limited Directors' report 30 June 2026 10 Principles used to determine the nature and amount of remuneration The objective of the Group's executive reward framework is to ensure reward for performance is competitive and appropriate for the results delivered. The framework aligns executive reward with the achievement of strategic objectives and the creation of value for shareholders, and it is considered to conform to the market best practice for the delivery of reward. The Board of Directors ('the Board') ensures that executive reward satisfies the following key criteria for good reward governance practices: ● Provide competitive rewards to attract qualified and experienced executives; ● Link executive rewards to length of service, experience and overall performance of the Group; and ● Equity participation is a cost effective and efficient incentive given the Group's pre-production status. The Board of Stonehorse Energy Limited believes the remuneration policy to be appropriate and effective in its ability to attract and retainthe bestexecutives and Directors to run andmanagetheGroup, as wellas creategoalcongruencebetween directors, executives and shareholders. Shares and options may only be issued to directors subject to approval by shareholders in a general meeting. The Board has no established retirement or redundancy schemes. The remuneration structure for KMP is based ona number of factors, including length ofservice, particular experience of the individual concerned, and overall performance of the Group. The contracts for service between the Group and KMP are on a continuing basis, the terms of which are not expected to change in the immediate future. The Board determines the proportion of fixed and variable compensation for each KMP. Director's fees are reviewed annually by the Board. No termination payments are payable to Non-Executive Directors. In accordance with best practice corporate governance, the structure of non-executive director and executive director remuneration is separate. Fixed remunerat