Mr. Ian Atkinson reports

SOUTHERN ENERGY CORP. ANNOUNCES THIRD QUARTER 2023 FINANCIAL AND OPERATING RESULTS AND DIRECTOR RETIREMENT

Southern Energy Corp. has released its third quarter financial and operating results for the three and nine months ended Sept. 30, 2023. Selected financial and operational information is outlined below and should be read in conjunction with the company's unaudited consolidated financial statements and related management's discussion and analysis (the "MD&A") for the three and nine months ended September 30, 2023, which are available on the company's website at www.southernenergycorp.com and have been filed under the company's profile on SEDAR+ at www.sedarplus.ca.

All figures referred to in this news release are denominated in U.S. dollars, unless otherwise noted.

THIRD QUARTER 2023 HIGHLIGHTS

• Petroleum and natural gas sales of $5.3 million in Q3 2023 and $14.2 million for the nine months ended September 30, 2023
• Generated $1.1 million of adjusted funds flow from operations1 in Q3 2023 ($0.01 per share basic and fully diluted)
• Net loss of $2.4 million in Q3 2023 ($0.02 net loss per share basic and fully diluted)
• Q3 2023 average production of 16,8812 Mcfe/d (2,814 boe/d) (95% natural gas)
• Average realized natural gas and oil prices for Q3 2023 of $2.83/Mcf and $82.65/bbl compared to $10.00/Mcf and $91.93/bbl in Q3 2022, and $2.18/Mcf and $72.83/bbl in the prior quarter
• Successfully renegotiated an increase of $2.0 million in the borrowing base of the company's senior secured term loan (the "Credit Facility"), extended the availability of Tranche B to August 31, 2025 to match the term of the Credit Facility, and extended the principal amortization period of the Credit Facility by twelve months

SUBSEQUENT EVENTS

• On November 9, 2023, closed an equity financing raising aggregate gross proceeds of $5.0 million through the issuance of a total of 26,630,000 new Common Shares
• In early December 2023, the company is mobilizing equipment to the field in Gwinville to start completion operations on the first drilled and uncompleted ("DUC") well at the 14-6 #3 (Upper Selma Chalk)

Ian Atkinson, President and Chief Executive Officer of Southern, commented:

"Southern is in an extremely strong position in the fourth quarter of 2023, with prevailing natural gas prices having significantly increased and our balance sheet capitalized, enabling us to go after the organic growth opportunities in our portfolio. In Q3 2023, we completed the synergistic infrastructure modifications at Gwinville connecting the newly acquired assets to our legacy Southern gathering system. We will have reduced field compression from five sites at the time of acquiring the assets to one site, which provides significant savings in both operating costs and fuel gas. In November 2023, we completed an equity fundraise to accelerate the completion of our four drilled and uncompleted wells at Gwinville. Initial cost estimates suggest that service costs are entering back into a deflationary period, and we are excited to execute our first slickwater fracture treatment in the Gwinville program.

"We continue to be encouraged by the outlook of supply and demand dynamics for U.S. natural gas, as at least two of the upcoming Gulf Coast LNG export projects, at Cheniere Energy's Corpus Christi expansion and Golden Pass LNG have recently announced they are ahead of schedule. Southern is well positioned to capitalize on natural gas prices with production behind pipe which can be brought on stream in a short time frame and we are excited to continue to grow the business with our new and longstanding shareholders."

Gwinville Development Update

With the net proceeds of the recent equity fundraise, the company will accelerate the completion of the four Gwinville wells that were drilled in Q1 2023. The company expects the first well to be on-line before the end of the year, with IP30 rates likely available towards the end of January 2024. Cost estimates for the completion of the 14-06 #3 well are anticipated to be $3 million or less as the company intends to take advantage of the deflationary service cost pressures since the last wells were completed. Follow-on completions are anticipated in the first half of 2024, depending on natural gas pricing.

Outlook

The company currently has $10.0 million of unused capacity on its Credit Facility, which can be utilized alongside its existing cash balance to complete the four drilled uncompleted horizontal wells at supportive natural gas prices.

As part of its risk management and sustainability strategy, Southern continuously monitors both the price of NYMEX, as well as the basis differentials, in order to mitigate some of the volatility of natural gas prices. Southern's current commodity hedge program includes:

Southern will continue to monitor NYMEX prices and the basis differential prices and is prepared to hedge additional volumes in a tactical manner going forward.

Southern thanks all of its stakeholders for their ongoing support and looks forward to providing future updates on operational activities and continuing to create shareholder value.

Director Retirement

Mr. Andrew McCreath has retired from the company's board of directors effective today to focus on other commitments. The board and management team wish to express their gratitude to Mr. McCreath for his contributions during his 5 years of service. The company does not have any immediate plans to appoint a replacement Non-Executive Director following Mr. McCreath's departure, though will keep this position under review.

Qualified Person's Statement

Gary McMurren, Chief Operating Officer, who has over 22 years of relevant experience in the oil industry, 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.