Mr. Ian Atkinson reports

SOUTHERN ENERGY CORP. ANNOUNCES EXECUTION OF A PURCHASE AND SALE AGREEMENT IN RESPECT OF A SYNERGISTIC ~ 400 BOE/D ASSET ACQUISITION TO CONSOLIDATE THE GWINVILLE FIELD

Southern Energy Corp. has entered into a definitive agreement with PetroTX Energy LLC to acquire the remaining producing acreage in the Gwinville field not already owned by the company in Jefferson Davis county, Mississippi, for a cash purchase price of $3.2-million. All currency amounts in this press release are in U.S. dollars (unless otherwise stated).

The Assets are currently producing approximately 400 boe/d (99% natural gas) of high working interest production at less than 8% projected annual decline from over 8,500 acres of held-by-production acreage and include significant redevelopment opportunities in the Selma Chalk formation. The Company recently initiated a field redevelopment program in Gwinville by employing modern horizontal drilling and multi-stage stimulation techniques on 10 operated wells drilled to date. The Assets are expected to increase well inventory in Gwinville by as much as 20%. The Transaction will allow Southern to design the surface and bottomhole field development plan more efficiently and cost-effectively.

The operational synergies that are expected to be realized by integrating the Assets with the Company's existing operations are alone significant enough for the Company to achieve strong financial returns on the Transaction, before any incremental cash flow from the Assets. The Company anticipates that the Asset's operating cost savings of more than 30% are expected to be realized almost immediately after completing the Transaction, primarily driven by the consolidation of infrastructure, staff and services in the Gwinville Field. The Transaction is consistent with the Company's strategy to consolidate stable, low decline, cash flowing assets that have been historically under-capitalized at highly attractive and accretive metrics.

Transaction Highlights [1]:

• PDP PV10 value of $7.7 million, including operations synergies, representing a PDP PV34 valuation or a nearly 60% discount to PDP PV10
  • This includes expected operational synergies with a PV10 value of more than $5 million
• Next twelve months cash flow of $0.9 million, representing a 3.6x cash flow multiple; 2022 cash flow of $3.7 million, representing a 0.9x cash flow multiple
• Flowing Production (WI) addition per boe/d acquired of $7,800 ($1,300/Mcfe/d), on an annual basis
• 1.8 MMboe PDP Reserves (WI) addition at implied price of $1.76/boe
• Potential 2P Reserves (WI) addition of 14.5 MMboe; 20+ net Selma Chalk drilling locations identified
• Projected 7% increase to sales gas volumes through fuel gas reduction
• Estimated operating cost savings of more than 30% expected to be achieved through synergies with our current Gwinville acreage
• 239 total / 204 producing (net) wells with low future plugging liability associated with the assets

PDP reserves, 2P reserves and PV10 in respect of the Assets have been internally estimated by the Company's Internal Qualified Reserve Evaluator ("QRE") and prepared in accordance with National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities ("NI 51-101") and the most recent publication of the Canadian Oil and Gas Evaluation Handbook ("COGEH"). "Internally estimated" means an estimate that is derived by the Company's internal QRE and prepared in accordance with NI 51-101. All internal estimates contained in this press release have been prepared effective as of June 1, 2023. Reserves values are based on working interest reserves of the Assets before deduction of royalties and without including any of royalty interest reserves.

The cash consideration payable under the Transaction of $3.2 million will be funded through existing capacity from the senior secured term loan (the "Credit Facility") with Southern's current lender, who is highly supportive of the Transaction. The effective date and proposed closing date of the Transaction is June 1, 2023. The Transaction is highly accretive to Southern from an operating and financial perspective as it will be funded through the current Credit Facility while still maintaining healthy debt to cash flow levels. Southern expects to have approximately $14.5 million of capacity remaining on the Credit Facility after closing the Transaction, which provides ample funds to complete the four drilled but uncompleted wells from the Gwinville drilling program when natural gas prices are supportive.

Pursuant to the terms of the Agreement, the Company has also agreed to grant PetroTX minor overriding royalties over two of the Asset's wells, which currently are not producing and would require remedial work to re-commence production, but were each previously producing approximately 400 Mcf/d.

Hannam & Partners acting as financial advisor to the Company in relation to the Transaction.

Ian Atkinson, President and CEO of Southern, commented:

"We are very excited to consolidate the Gwinville Field under one operator at an accretive price for our shareholders. This will be the first time this has been done in over 30 years since Selma Chalk and City Bank early exploration and development started in the 1990s. Our team will seek to incorporate these operations with our own, achieving substantial synergies and cost savings that will help drive a very quick return of capital even at current natural gas pricing. The Finding, Development and Acquisition (FD&A) metrics of the Assets are outstanding and will add over 20 Selma Chalk drilling locations to our already deep inventory in the Gwinville Field. The Transaction demonstrates our ability to execute our high value inorganic growth strategy at low cost during periods of weaker natural gas pricing to add accretive, high quality assets to the portfolio that we will eventually grow organically when commodity prices are more supportive."

Corporate Presentation

A new corporate presentation dated May 2023 is now available on the Company website at www.southernenergycorp.com.

Qualified Person's Statement

Gary McMurren, COO, who has over 22 years of relevant experience in the oil industry and has approved the technical information contained in this announcement. Mr. McMurren is registered as a Professional Engineer with the Association of Professional Engineers and Geoscientists of Alberta and received a Bachelor of Science degree in Chemical Engineering (with distinction) from the University of Alberta.

About Southern Energy Corp.

Southern Energy Corp. is a natural gas exploration and production company characterized by a stable, low-decline production base, a significant low-risk drilling inventory and strategic access to premium commodity pricing in North America. 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. Our 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 re-development strategies utilizing horizontal drilling and multi-staged fracture completion techniques.

We seek Safe Harbor.