Ann: Annual Report to shareholders, page-2

Have only skim read quickly, so need to have another deep dive tonight. But just briefly:

The good:
- Net production was up 132% from the previous year with total annualised production of 205,401 BOE from July 1st 2023 to
June 30th 2024
- Negotiations progressing on participation in a multi well opportunity with a target for agreement in Q4 2024 and details
to follow.

- After a twelve-month hiatus due to the new owner's sale of production assets and subsequent restructuring, Stonehorse is now
receiving further payments from its initial Proton investment. The Company expects to recover its entire initial capital
investment of $333,000, plus interest, by June 20256

The bad:
- The second half has been challenging with softer commodities prices and egress restraints related to the proposed drilling and
completion of the Caroline 2 well delaying drilling and completion activities
- The Gryphon Wapiti well was brought online on 1 January 2024 and while it has failed to meet initial expectations, the operator
is planning to divest the assets of the company which may provide an opportunity to monetise the future production of this
well (this could turn into a positive, depending on the asset realisation value)

The annoying:
- Myall Creek - Despite delays due to former operator Armour Energy being placed into administration and it’s subsequently restructure
(Armour has now been acquired by a privately held Company ADZ Energy Pty Ltd, the agreed intention of the joint venture
parties is to progress and complete the planned frac stimulation and realise production revenue and ultimately a return on the
Myall Creek 2 investment. ADZ continues to progress the frac design, however Stonehorse has been advised that all frac operations have been delayed into 2025 due to frac spreads being in high demand through the second half of 2024 with none available until December 2024
at the earliest...