Mr. Ian Atkinson reports

SOUTHERN ENERGY ANNOUNCES AMENDED TERMS OF PREVIOUSLY ANNOUNCED FINANCINGS

Southern Energy Corp. has agreed to amend the terms of its previously announced equity fundraise to raise aggregate gross proceeds of approximately $6-million (U.S.) (approximately 4.8 million British pounds/$8.5-million) of units of the company as follows: (i) to reduce the price from 4.3 pence to 3.8 pence (the placing price), or from eight cents to seven cents per unit (the prospectus price); (ii) to increase the amount of warrants per unit from one-half of one common share purchase warrant to one whole warrant per unit; and (iii) to reduce the exercise price of such warrants from 5.3 pence to 4.8 pence (in the case of the placing) or from 10 cents to nine cents per common share (in the case of the prospectus offering).

The remainder of the terms of the fundraising, which consists of a placing of new units to new and existing institutional investors on AIM (Alternative Investment Market) and a concurrent public offering of new units in Canada, will continue without further amendment, other than the revision to the expected timetable for the fundraising, as further detailed below.

Research Capital Corp. (RCC) is acting as sole agent and sole bookrunner in connection with the prospectus offering. Tennyson Securities, a trading name of Shard Capital Partners LLP, and Hannam & Partners, a trading name of H&P Advisory Ltd., are acting as joint bookrunners in connection with the placing.

Overview of the fundraising:

• Southern intends to conduct an approximately $6-million (U.S.) equity fundraise to accelerate the completion of its three drilled and uncompleted (DUC) wells, drilled as part of its Q1 2023 drilling campaign on its Gwinville acreage, as well as fully financing (alongside cashflow) the drilling of two vertical Cotton Valley wells on its Mechanicsburg acreage.
• The net proceeds from the fundraising are expected to fully finance, alongside existing cash, cash flows and undrawn debt facilities, the completion of the Gwinville DUCs at a cost of approximately $2.5-million (U.S.) per well and the drilling of the Mechanicsburg wells at a cost of approximately $3.5-million (U.S.).
• The company is seeking the approval of the holders of its outstanding convertible unsecured subordinated debentures by way of obtaining extraordinary resolutions of greater than 66.67 per cent of the aggregate principal amount of the debentures, to amend the terms of the indenture governing the debentures such that, subject to and concurrent with the completion of the fundraising, an amount equal to 102.5 per cent of the principal amount outstanding under the debentures plus all accrued and unpaid interest as of the closing date would convert into units at the revised prospectus price (the debenture amendment). The completion of the debenture amendment and the issuance of the units upon the conversion of the debentures remain subject to acceptance of the TSX Venture Exchange. The units to be issued pursuant to the debenture amendment will be subject to customary lock-up provisions.

Summary on fundraising:

• A placing of new units to new and existing institutional investors at the placing price: The placing will be conducted through an accelerated bookbuild process, which will launch immediately following the release of this announcement. The placing is subject to the terms and conditions set out in an appendix to this announcement.
• A concurrent prospectus offering of new units on a best-effort agency basis at the prospectus price: The prospectus offering will be conducted pursuant to the terms and conditions of an amended agency agreement to be entered into between the company and the agent. The size of the prospectus offering will be determined in the context of the market at the time of entering into the amended agency agreement between the company and the agent.
• Certain directors and members of senior management of the company forming part of a president list are expected to subscribe into the fundraising alongside investors.

The prospectus offering is being conducted pursuant to the company's Canadian base shelf prospectus dated Nov. 28, 2024. An amended and restated prospectus supplement amending and restating the prospectus supplement dated March 14, 2025 (as amended) relating to the prospectus offering will be filed in each of the provinces of Canada, other than Quebec. Copies of the prospectus supplement and accompanying base shelf prospectus, when available, can be obtained free of charge under the company's profile on SEDAR+. Delivery of the base shelf prospectus and the prospectus supplement and any amendments thereto will be satisfied in accordance with the access equals delivery provisions of applicable Canadian securities legislation, such that the company intends to file the prospectus supplement within two business days. The base shelf prospectus and the prospectus supplement will contain important detailed information about the company and the prospectus financing. Prospective investors should read the prospectus supplement and accompanying base shelf prospectus and the other documents the company has filed on SEDAR+ before making an investment decision. The prospectus offering is expected to close on or around March 31, 2025, and is conditional on the company obtaining the extraordinary resolutions in connection with the debenture amendment, and subject customary closing conditions, including the approval of the TSX-V. The company will use commercially reasonable efforts to obtain the necessary approvals to list the warrants issuable pursuant to the prospectus offering.

The number of placing units and prospectus units (and the underlying common shares and warrants) to be issued will be determined by the company following completion of the bookbuild in consultation with the joint bookrunners and RCC.

The bookbuild is currently expected to close no later than 8 a.m. GMT on March 31, 2025, but the joint bookrunners and the company reserve the right to close the bookbuild earlier or later, without further notice, and is conditional on the company obtaining the extraordinary resolutions in connection with the debenture amendment.

Certain directors and officers of the company will participate in the prospectus offering under the president list, which is considered a related party transaction pursuant to Multilateral Instrument 61-101, Protection of Minority Security Holders in Special Transactions. The company is relying on exemptions from the formal valuation and minority shareholder approval requirements provided under sections 5.5(a) and 5.7(1)(a) of MI 61-101 on the basis that the fair market value of the aggregate participation of the insiders in the prospectus offering will not exceed 25 per cent of the market capitalization of the company, as determined in accordance with MI 61-101.

Additional details of the fundraising

The placing is being conducted through an accelerated bookbuild process to eligible institutional investors and will launch immediately following the release of this announcement. The company expects to close the bookbuild no later than 8 a.m. GMT on March 31, 2025, but the joint bookrunners and the company reserve the right to close the bookbuild earlier or later, without further notice.

Details of the results of the placing will be announced as soon as practicable after the close of the bookbuild. The placing is not being underwritten. The placing is conditional on minimum gross proceeds of $6-million (U.S.) being raised pursuant to the fundraising. The common shares and warrants underlying the placing units, when issued, will be fully paid and such common shares will rank pari passu in all respects with the company's existing common shares.

The company has granted to the agent an option, exercisable, in whole or in part, in the sole discretion of the agent, to purchase up to an additional number of units, and/or the components thereof, that in aggregate would be equal to 15 per cent of the total number of units to be issued under the prospectus offering, to cover overallotments, if any, and for market stabilization purposes, exercisable at any time and from time to time up to 30 days following the closing of the prospectus offering.

This announcement should be read in its entirety. Investors' attention is drawn to the detailed terms and conditions of the placing. By choosing to participate in the placing and by making an oral and legally binding offer to acquire placing units, investors will be deemed to have read and understood this announcement in its entirety (including the appendix) and to be making such offer on the terms and subject to the conditions of the placing contained here and to be providing the representations, warranties and acknowledgments contained in the terms and conditions.

The company intends that the placing will be conducted in conjunction with the prospectus offering.

Certain of the directors and members of the company's senior management team have indicated their intention to participate in the fundraising.

Application will be made to: (a) the London Stock Exchange PLC for admission of the common shares (including the common shares issuable upon the exercise of the warrants) underlying the placing units and the prospectus units to trading on AIM; and (b) the TSX-V for listing of the common shares (including the common shares issuable upon the exercise of the warrants) underlying the placing units and the prospectus units for trading on the facilities of the TSX-V. Expected timing for admission of the common shares underlying the placing units to trading on AIM and the common shares underlying the prospectus units to trading on the TSX-V is as set out in the expected timetable of principal events below. Final confirmation of the expected timing for admission of such common shares will be confirmed in due course and is subject to a number of conditions, including, without limitation, the entering into of a definitive agency agreement and receipt of all regulatory approvals, including the approval of the TSX-V.

Qualified person statement

Gary McMurren, chief operating officer, who has over 24 years of relevant experience in the oil industry, has reviewed and 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 in chemical engineering (with distinction) from the University of Alberta.

We seek Safe Harbor.