Unreasonable good financials projected for Stonehorse Energy, page-2

David answers seem to indicate that he is in fact pursuing multiple overlapped concurrent well opportunities at this moment,

using words like … “beinvesting in multiple wells per year”,

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We know that David wrote that he intends to reach their target production of

1) 2000BOE/Day

2) plus enough profit to reinvest to at least sustain same earnings into the future

and that the combined target he estimated likely could be reached within in 2 to 3 years’ time.

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From modelling, this could be achieved with 4 Certus type wells being opened per year i.e. hence his “multiple wells per year” answer. We know from Bill and Mike that there are lots of opportunities in Alberta and they like to work quick as indicated by the first well drilling finishing that may happen this week .

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I think given his answers and the production type curves its seems Stonehorse Energy is on track to their target of annual earnings greater than (14.4 million + reinvestment cost ) in 2 to 3 years’ time needed to payout dividends and sustain earnings.

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This is modeled in the spread sheet below.

Table 1:

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Description ofcolumns

Numbers are in $1000

Column 1 is the month number, each year is marked in bold, month 0 starts when drilling started

Column 2 is SHE cash reserves

Column 3 is how much they spent on wells that month

Column 4 is total revenue generated per month from wells; this ignores income from interest and proton loans.

Column 5 is current well earnings after tax per month

Column 6 to 16, each column is 1 new well earnings after tax per well. Note this is after expenses, royalties, operating expenses, etc... It is profit according to David estimate of $1.2 per mcf of gas and $20 /BOE.

Column 17: Light blue sum of all wells earnings per month, i.e. Profit not Revenue.

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Notice by month 30, exactly half way between David Estimate of 2 to 3 years they reach target production of 2000 BOE/day plus near enough to sustain earnings into the future. The is columns is the profit

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From this table SHE could payout 100% of current market cap of 10.95 million in dividends per year and reinvest in further wells to sustain the earnings for the following years dividends and still have some change left over.!!!.