Ann: Annual Report to shareholders, page-6

It looks as if they have listened to shareholders regarding directors being aligned with shareholders as creditdumbness pointed out..

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The Quality of the Annual report has significantly improved.

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The corporate governance statement.

Looks like their auditors are saying if you are getting serious then better Add :

Six pages (54 to 59) of recommendations .

3 pages of highlighting risks (8 to 11 )

Possible wells:

If Caroline well is successful then can do 2-3 offset wells in the area at 26.25%

If Wapiti light oil well is successful then have option for 2^nd well 3 sections.

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Future wells and Growth

To recap David Deloub answers to Questions made in mid-August.

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Questions:

You indicated that Stonehorse Energy intention is to reach a target of 2000 BOE/day in to 2 to 3year time.

That would seem to imply that Stonehorse Energy would need to take Net working interest in other wells to achieve the target production of 2000 BOE/day.

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Question 1). Does the mean that if well Certus-1-27-33 goes as planned then you will be bringing out more wells over the next 12 months in Canada?

Answer:Yes, if Certus produces as expected, we have the opportunity to participate in a follow-on well with them. In addition to the Certus relationship we have a number of other prospects we are currently progressing.

Questions 2) If this is the case then do you anticipate that Stonehorse Energy are going to taking NWI’s in 4 or more wells per year. if not then what is the expected number of wells you expect to bring online in the next 12 months ?

Answer: Hard to pin down a number on this but we would expect to be investing in multiple wells per year. This would make that target production volume well within reach in a reasonable time frame.

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Given David other answers, announcements (graphs), price of gas and oil it was possible to create a spread sheet of SHE target production rates , profit and the number of wells that are needed to meet targets in order to pay dividends in 2 to 3 years time, i.e. At least 8 to 10 new wells over the next 2 to 3 years.

Page 5makes mention that if the gryphon well is successful then SHE has the potential of up to 34 Wells in the area. (thats right thirty four)

This is more than sufficient to meet their targets.

David has answered that they will easily reach their targets.

Price of oil has risen 11.6 % since David gave an August answer on the profit per BEO for both Gas and oil of the wells.

Also the Light oil of the Gryphon well is also more profitable the regular crude oil.

In addition:

* Canada Trans-mountain pipeline is coming online soon.

* Further large Vancouver docks for oil tankers have been recently been completed.

* Canadian prime minster ’Justin Trudeau’ has given his backing to the oil pipeline with explicit mention of target markets of Indonesia and China..

(This should bring down transport cost significantly, increasing demands and profit margins whilst increasing local demand in Canada.)

* Global oil demand is increasing,

* SPR needs topping up, OPEC,Russia etc are reducing production.

I personally remain holding and am excited about the next two years to 3 years.

We have a growth plan, Enough cash, Will and opportunities and all at 0 enterprise value.