Mr. Ian Atkinson reports

SOUTHERN ENERGY CORP. ANNOUNCES RESULTS OF PLACING AND UPDATE ON OFFERING

Southern Energy Corp. has completed a placing, part of the equity financing announced at 17:20 p.m. on June 23, 2022. Defined terms used in this announcement have the same meaning as given to them in the offering announcement, unless otherwise defined herein.

Offering highlights:

• Due to strong demand, the size of the placing in the United Kingdom was increased from $12.5-million (U.S.) to $13.5-million (U.S.) and, when combined with the $17.5-million (U.S.) prospectus offering, the total size of the offering has increased to $31.0-million (U.S.).
• The offering is expected to provide additional liquidity to the company's common shares on both AIM and the TSX Venture Exchange (TSX-V).
• Net proceeds of the offering are to be primarily used to accelerate the initiation of a continuous organic drilling program at Gwinville, as well as to increase financial flexibility for potential accretive acquisition opportunities.
• Further drilling at Gwinville is expected to begin in Q4 2022.

Ian Atkinson, president and chief executive officer of Southern, commented:

"We are delighted to provide this update on the U.K. placing regarding our previously announced equity financing, which will raise over c [approximately] $31.0-million (U.S.) for the company, providing Southern with a strong balance sheet as we finance the business for further, operationally driven growth. This funding will allow us to pursue significant opportunity for accretive acquisitions in our area of expertise and to continue to act nimbly and opportunistically as we execute our growth strategy."

Further to the offering announcement, the company has raised, in aggregate, approximately $31.0-million (U.S.) (approximately 25.2 million pounds sterling/$40.3-million) (before expenses) through the underwritten offering of 26,060,000 common shares at a price of 87 cents per common share pursuant to the prospectus offering (excluding any common shares that may be issued pursuant to the overallotment option) and 20,311,927 new common shares at a price of 54.5 pence per common share pursuant to the placing. Accordingly, in aggregate, 46,371,927 new common shares are to be issued pursuant to the offering, which represents 51.8 per cent of the existing common share capital of the company prior to the offering.

The prospectus offering is being undertaken on an underwritten bought-deal basis led by Eight Capital, as lead underwriter and sole bookrunner, included Haywood Securities Inc. and Canaccord Genuity Corp., and is expected to close on or about July 7, 2022, subject to customary closing conditions, including the approval of the TSX-V. Further to the offering announcement, the underwriting agreement was entered into on June 23, 2022.

The placing

The placing was conducted by Canaccord Genuity Ltd. and H&P Advisory Ltd. acting as joint bookrunners. The new common shares issued pursuant to the placing and the prospectus offering will be issued credited as fully paid and will rank pari passu in all respects with each other and the existing common shares from their date of issue.

Further details of the offering

The company has applied to the London Stock Exchange for admission to trading on AIM, and to the TSX-V for approval of the listing of, the placing shares and prospectus shares. Subject to, inter alia, the placing agreement having become unconditional and not having been terminated in accordance with its terms, it is expected that admission to trading on AIM of the placing shares will occur at 8 a.m. (U.K. time) on or around July 5, 2022.

Subject to, inter alia, the underwriting agreement entered into between the company and the underwriters having become unconditional and not having been terminated in accordance with its terms, as well as final TSX-V approval of the listing of the prospectus offering shares, it is expected that admission to trading on AIM of the prospectus offering shares will occur at 8 a.m. (U.K. time) on or around July 7, 2022.

The placing and the prospectus offering are not inter-conditional (save that the placing is conditional upon the underwriting agreement remaining in force in the period up to placing share admission) and there can be no guarantee that any particular element or elements of the offering will be completed.

In accordance with the provision of the disclosure guidance and transparency rules (DTR) of the FCA (Financial Conduct Authority), the company confirms that, immediately following the placing shares admission, the total number of common shares in the company in issue will be 109,848,785, each of which carries the right to vote, with no common shares held in treasury. This figure may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the company under the DTRs.

About Southern Energy Corp.

Southern Energy is a natural gas exploration and production company. Southern has a primary focus on acquiring and developing conventional natural gas and light oil resources in the southeast Gulf States of Mississippi, Louisiana and East Texas. The company's management team has a long and successful history working together and have created significant shareholder value through accretive acquisitions, optimization of existing oil and natural gas fields and the utilization of redevelopment strategies utilizing horizontal drilling and multistaged fracture completion techniques.

We seek Safe Harbor.