Mr. Ian Atkinson reports

SOUTHERN ENERGY CORP. ANNOUNCES PRELIMINARY GWINVILLE COMPLETION RESULTS

Southern Energy Corp. has released the preliminary results from its recent Upper Selma Chalk horizontal well completion in the Gwinville field. In mid-December, 2023, Southern successfully completed the first of its four drilled but uncompleted (DUC) wells from the company's Q1 2023 drilling program -- the GH 14-06 No. 3 wellbore. Over the first 20 days of production, natural gas rates from the well exceeded 6.5 million cubic feet/day (MMcf/d) and averaged 5.3 MMcf/d under restricted flowing conditions as the well cleans up, recovering approximately 33 per cent of load fluid to date with gas produced flowing directly to company-owned facilities with all volumes sold.

Southern implemented a number of stimulation design changes for this latest Upper Selma Chalk horizontal completion that improved the predictability and efficiency of the fracture operation and, more importantly, reduced the overall completion cost down to $2.1-million (U.S.), well below budget estimates. Costs for this completion operation are approximately 40 per cent lower than the two previous 18-10 pad Upper Selma Chalk wells that were completed earlier in 2023.

Southern will continue to monitor the early production performance from the GH 14-06 No. 3 well over the next couple of months before making a decision on the completion timing of the remaining three DUC wells. The remaining DUC wellbores have been drilled in the Lower Selma Chalk (two) and City Bank formations.

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

"We are extremely excited to deliver the results of this latest Upper Selma Chalk horizontal well, which we expect to fall in line with our Gen 2 IP30-type curve estimates. The Southern operations team has successfully analyzed and optimized our early well results to execute what may be our best well to date, for a fraction of the cost of the prior well completions, which bodes well for future well activity. Southern is already selling volumes of gas associated with its latest well at gas prices up over 30 per cent from November lows. Improved production rates at lower capital costs will allow Southern to start redeveloping the Gwinville field on an accelerated timeline as natural gas prices are expected to improve materially into the second half of 2024.

"With the success of the completed well, the company is now looking forward to deploying these successful design changes on our first two Lower Selma Chalk laterals and the next City Bank lateral that remain uncompleted. Our original City Bank horizontal completion at GH 18-10 No. 1 has shown no decline since being placed on production in July, 2023. With these updates we remain eager to highlight the benefits of an optimized completion design performance in this formation delivering value for the business."

Qualified person's statement

Gary McMurren, chief operating officer, who has over 23 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 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. Its management team has a long and successful history working together and has 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.

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