REG - Southern Energy Corp - Q3 2025 FINANCIAL AND OPERATING RESULTS

Southern EnergyAnnouncement

18/11/2025 07:00

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RNS Number : 8890H  Southern Energy Corp.  18 November 2025

SOUTHERN ENERGY CORP. ANNOUNCES THIRD QUARTER 2025 FINANCIAL AND OPERATING
RESULTS

 

Calgary, Alberta - November 18, 2025 - Southern Energy Corp. ("Southern" or
the "Company") (TSXV:SOU) (AIM:SOUC), an established producer with natural gas
and light oil assets in Mississippi, announces its third quarter financial and
operating results for the three and nine months ended September 30, 2025.
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, 2025, which are available on
the Company's website at www.southernenergycorp.com
(https://url.avanan.click/v2/___http:/www.southernenergycorp.com___.YXAzOnNvdXRoZXJuZW5lcmd5Y29ycDphOm86ZTkzNjY5ZDk3N2YyOWViMmVlYmIzNGZiZGZmYWM0OGU6NjozZGViOjAyYzc0NzgyYzgwNjkwMzU4YmJiYTUzNzRkNWIwMjc3M2ZjODUzYmQwZGQ5NmQ1MTYzM2RkNWMwODY1MGU4MjQ6cDpUOk4)
and have been filed under the Company's profile on SEDAR+ at www.sedarplus.ca
(https://url.avanan.click/v2/___http:/www.sedarplus.ca___.YXAzOnNvdXRoZXJuZW5lcmd5Y29ycDphOm86ZTkzNjY5ZDk3N2YyOWViMmVlYmIzNGZiZGZmYWM0OGU6NjpiZmFkOmNjYTY0NTM5OWQ3YmUwNzUwZWQ5YzJiZDA4ODdkODNmNzAxYTE5ZGEwMTVkNzRkMTE1M2JiMjhhZDQ1YWJkMTk6cDpUOk4)
.

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

THIRD QUARTER 2025 HIGHLIGHTS

●    Petroleum and natural gas sales of $4.3 million during Q3 2025, an
increase of 25% from the same period in 2024, largely due to the 50% increase
in Q3 2025 natural gas pricing over Q3 2024

●    Average production of 12,457(( 1  (#_ftn1) )) Mcfe/d (2,076 boe/d)
(97% natural gas) during Q3 2025, a decrease of 11% from the same period in
2024 and an increase of 10% from Q2 2025

●    Average realized natural gas and oil prices for Q3 2025 of $3.59/Mcf
and $63.53/bbl, compared to $2.40/Mcf and $73.78/bbl in Q3 2024. Southern
achieved an average premium of $0.52/Mcf (approximately 17%) above the NYMEX
HH benchmark in Q3 2025

●    Generated $1.0 million of Adjusted Funds Flow from Operations(( 2 
(#_ftn2) )) in Q3 2025 ($0.00 per share basic and diluted)

●    Net earnings of $0.5 million ($0.00 per share basic and diluted) in
Q3 2025, compared to a net loss of $2.1 million in Q3 2024

 

 

SUBSEQUENT EVENTS

●    The Company successfully completed an oil well in the Magee Field at
the end of September 2025. The well produced approximately 3,000 bbl of oil in
the month of October and is currently producing at steady rates ~ 85 bbl/d of
oil. The final costs for the completion were $85,000, which resulted in a
payout of less than three weeks on the project.

 

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

"Southern delivered another strong quarter, underpinned by a successful oil
recompletion in the Magee Field and the continued strong performance of the GH
LSC 13-13 #2 well. These achievements have enhanced our cash flow and
reaffirmed the depth and quality of our development inventory. With realized
natural gas pricing averaging a 17% premium to Henry Hub during the quarter,
our strategic positioning and disciplined execution continue to drive
meaningful value for shareholders."

Financial Highlights

                                                      Three months ended September 30,                      Nine months ended September 30,
 (000s, except $ per share)                           2025                   2024              2025                           2024
 Petroleum and natural gas sales                      $        4,340         $     3,480       $      13,450                  $    12,163
 Net income (loss)                                    462                    (2,062)           (3,828)                        (7,805)
 Net income (loss) per share
     Basic                                            0.00                   (0.01)            (0.01)                         (0.05)
     Fully diluted                                    0.00                   (0.01)            (0.01)                         (0.05)
 Adjusted funds flow from operations ((1))            1,030                  552               2,251                          3,484
 Adjusted funds flow from operations per share ((1))
     Basic                                            0.00                   0.00              0.01                           0.02
     Fully diluted                                    0.00                   0.00              0.01                           0.02
 Capital expenditures and acquisitions                340                    487               2,808                          816
 Weighted average shares outstanding
     Basic                                            336,255                167,227           276,353                        166,737
     Fully diluted                                    336,255                167,227           276,353                        166,737
 As at period end
 Common shares outstanding                            336,255                167,243           336,255                        167,243
 Total assets                                         50,626                 56,970            50,626                         56,970
 Non-current liabilities                              19,826                 9,036             19,826                         9,036
 Net debt ((1))                                       $      (19,739)        $    (22,710)     $      (19,739)                $    (22,710)

Note:

((1)         ) See "Reader Advisories - Specified Financial
Measures".

 

Operations Update

 

In late June 2025, Southern brought online the first of its three remaining
drilled but uncompleted ("DUC") horizontal wells from the Q1 2023 drilling
program, and its first Lower Selma Chalk ("LSC") lateral - the GH LSC 13-13 #2
wellbore. Over the first 30 days of production the well averaged natural gas
rates of 3.6 MMcfe/d (99% gas), which is an increase of over 100% compared to
the average of the original LSC horizontal wells in Gwinville that were
drilled and completed by the previous operators. The well has continued to
flow throughout the quarter as per expectations, achieving an IP90 rate of 2.9
MMcfe/d.

 

Southern implemented stimulation design changes that improved the
predictability and speed of the fracture operations, and most importantly,
reduced the Company's overall expected completion cost for future horizontal
wells down to ~ $1.8 million per well.  Incorporating planned design changes
on the drilling side, Southern now expects the full drill, complete, equip and
tie-in cost for future Gwinville horizontal wells (5,000' lateral) to be ~
$4.0 million, which is 20% lower than the current capital estimates in the
Company's third-party reserve report.

 

Southern will continue to monitor regional natural gas pricing over the
upcoming months before making a decision on the completion timing of the
remaining two DUC wells.

 

Southern continues to work with Federal Energy Regulatory Commission ("FERC")
staff to resolve the ongoing transportation dispute that resulted in the
shut-in of approximately 400 boe/d of production from the Mechanicsburg and
Greens Creek fields. In September 2025, FERC requested certain data from the
pipeline operator. Based on prescribed FERC resolution timelines and past rate
determination processes, the Company now expects this issue to be resolved
sometime in Q4 2025, at which point these production volumes will come back
on-line. The ongoing US government shutdown has contributed to further
unforeseen delays in the process.

 

Outlook

 

With the recent operational success of the GH LSC 13-13 #2 well completion and
the Magee oil recompletion, Southern plans to leverage the resulting increase
in cash flow to further strengthen its balance sheet and advance additional
oil focused projects and the two remaining DUCs at Gwinville.

 

The Company continues to benefit from a fixed-price natural gas swap of 5,000
MMBtu/d at $3.40/MMBtu through December 2026, providing meaningful downside
protection. Combined with improved regional pricing and a stronger financial
position, Southern is well-positioned to execute a disciplined capital program
focused on sustainable growth and long-term shareholder value creation.

 

Southern will continue to monitor NYMEX pricing and basis differentials and
remains prepared to tactically hedge additional volumes as market conditions
warrant. The Company appreciates the continued support of its stakeholders and
looks forward to providing further updates as it advances its operational and
financial objectives.

 

Qualified Person's Statement

 

Gary McMurren, Chief Operating Officer, who has over 24 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.

 

For further information about Southern, please visit our website at
www.southernenergycorp.com
(https://url.avanan.click/v2/___http:/www.southernenergycorp.com___.YXAzOnNvdXRoZXJuZW5lcmd5Y29ycDphOm86MzA2NjE2OWIxMDBjM2FjM2I3ZjZhZDA1OGM0NTUwODU6NjpkYzc5OmExY2U1YzQxYTI4YWQ0NjQ0MWZhZThlYTdkZDdlNzlkNDI1NDQ5MjllNjk0M2QyOGFmNWQzZWIxZTRkMTJkNTQ6cDpU)
or contact:

 

  Southern Energy Corp.
  Ian Atkinson (President and CEO)                            +1 587 287 5401
  Calvin Yau (CFO)                                            +1 587 287 5402

  Strand Hanson Limited - Nominated & Financial Adviser       +44 (0) 20 7409 3494
  James Bellman / Rob Patrick / Edward Foulkes

  Tennyson Securities - Broker                                +44 (0) 20 7186 9033
  Peter Krens / Jason Woollard

 

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.

READER ADVISORIES

MCFE Disclosure. Natural gas liquids volumes are recorded in barrels of oil
(bbl) and are converted to a thousand cubic feet equivalent (Mcfe) using a
ratio of six (6) thousand cubic feet to one (1) barrel of oil (bbl). Natural
gas volumes recorded in thousand cubic feet (Mcf) are converted to barrels of
oil equivalent (boe) using the ratio of six (6) thousand cubic feet to one (1)
barrel of oil (bbl). Mcfe and boe may be misleading, particularly if used in
isolation. A boe conversion ratio of 6 mcf:1 bbl or a Mcfe conversion ratio of
1 bbl:6 Mcf is based in an energy equivalency conversion method primarily
applicable at the burner tip and does not represent a value equivalency at the
wellhead. In addition, given that the value ratio based on the current price
of oil as compared with natural gas is significantly different from the energy
equivalent of six to one, utilizing a boe conversion ratio of 6 Mcf:1 bbl or a
Mcfe conversion ratio of 1 bbl:6 Mcf may be misleading as an indication of
value.

Short Term Results. References in this press release to peak rates, production
rates since inception, current production rates, initial 30-day productions
rates and other short-term production rates are useful in confirming the
presence of hydrocarbons, however such rates are not determinative of the
rates at which such wells will commence production and decline thereafter and
are not indicative of long-term performance or of ultimate recovery. While
encouraging, readers are cautioned not to place reliance on such rates in
calculating the aggregate production of Southern. The Company cautions that
such results should be considered to be preliminary.

Unit Cost Calculation. For the purpose of calculating unit costs, natural gas
volumes have been converted to a boe using six thousand cubic feet equal to
one barrel unless otherwise stated. A boe conversion ratio of 6:1 is based
upon an energy equivalency conversion method primarily applicable at the
burner tip and does not represent a value equivalency at the wellhead. This
conversion conforms with NI 51-101. Boe may be misleading, particularly if
used in isolation.

Product Types. Throughout this press release, "crude oil" or "oil" refers to
light and medium crude oil product types as defined by NI 51-101. References
to "NGLs" throughout this press release comprise pentane, butane, propane, and
ethane, being all NGLs as defined by NI 51-101. References to "natural gas"
throughout this press release refers to conventional natural gas as defined by
NI 51-101.

Abbreviations. Please see below for a list of abbreviations used in this press
release.

bbl                           barrels

bbl/d                       barrels per day

boe                          barrels of oil

boe/d                      barrels of oil per day

Mcf                          thousand cubic feet

Mcf/d                      thousand cubic feet per day

Mcfe                        thousand cubic feet
equivalent

Mcfe/d                    thousand cubic feet equivalent
per day

MMcfe                    million cubic feet equivalent

MMcfe/d                million cubic feet equivalent per day

MMBtu                   million British thermal units

MMBtu/d               million British thermal units per day

NI 51-101               National Instrument 51-101 Standards of
Disclosure for Oil and Gas Activities

NYMEX                    New York Mercantile Exchange

Forward Looking Statements. Certain information included in this press release
constitutes forward-looking information under applicable securities
legislation. Forward-looking information typically contains statements with
words such as "anticipate", "believe", "expect", "plan", "intend", "estimate",
"propose", "project", "continue", "evaluate", "forecast", "may", "will",
"can", "target" "potential", "result", "could", "should" or similar words
suggesting future outcomes or statements regarding an outlook (including
negatives and variations thereof). Forward-looking information in this press
release may include, but is not limited to statements concerning the Company's
asset base including the development of the Company's assets, positioning, oil
and natural gas production levels, the Company's anticipated operational
results, Southern's growth strategy and the expectation that it will continue
to enhance shareholder value, Southern's expectation that improved regional
pricing and a strengthened financial foundation will support execution of its
capital program, sustainable growth of the Company and long-term value
creation, forecasted natural gas pricing, Southern's ability to re-initiate
growth in deploying the net proceeds from the equity financing on capital
expenditures, drilling and completion plans, expectations regarding commodity
prices and service costs, expectations regarding the performance
characteristics of the Company's oil and natural gas properties, the Company's
hedging strategy and execution thereof (including its intention to continue
monitoring commodity prices and basis differentials and to hedge additional
volumes as deemed appropriate), the ability of the Company to achieve drilling
success consistent with management's expectations, the Company's expectations
regarding completion of the two remaining DUCs and the drilling operations and
production volumes in the Mechanicsburg and Greens Creek fields (including the
timing thereof and anticipated costs and funding as well as the evaluation of
well performance and regional natural gas pricing to inform such decisions),
the Company's expectations regarding the resolution of regulatory disputes
(including the anticipated timing thereof) and impact of FERC rate
determinations on shut-in production volumes, the expected use of additional
cash flow generated from the GH LSC 13-13 #2 well, the Company's ability to
realize sustained pricing premiums due to its strategic location in the
Southeast U.S., the effect of market conditions on the Company's performance
and expectations regarding the use of proceeds from all sources including the
senior term loan. Statements relating to "reserves" and "recovery" are also
deemed to be forward-looking statements, as they involve the implied
assessment, based on certain estimates and assumptions, that the reserves
described exist in the quantities predicted or estimated and that the reserves
can be profitably produced in the future.

The forward-looking statements contained in this press release are based on
certain key expectations and assumptions made by Southern, including, but not
limited to, the timing of and success of future drilling, development and
completion activities, the performance of existing wells, the performance of
new wells, the availability and performance of drilling rigs, facilities and
pipelines, the geological characteristics of Southern's properties, the
characteristics of the Company's assets, the Company's ability to comply with
ongoing obligations under the senior term loan and other sources of financing,
that the Company may seek waiver of certain financial covenants or amendments
to the Company's senior term loan, the Company's ability to continue as a
going concern, availability of alternative debt and equity financing
opportunities, the successful application of drilling, completion and seismic
technology, the benefits of current commodity pricing hedging arrangements,
Southern's ability to enter into future derivative contracts on acceptable
terms, Southern's ability to secure financing on acceptable terms, prevailing
weather conditions, prevailing legislation, as well as regulatory and
licensing requirements, affecting the oil and gas industry, the Company's
ability to obtain all requisite permits and licences, prevailing commodity
prices, price volatility, price differentials and the actual prices received
for the Company's products, royalty regimes and exchange rates, the impact of
inflation on costs, the application of regulatory and licensing requirements,
the Company's ability to obtain all requisite permits and licences, the
availability of capital, labour and services, the creditworthiness of industry
partners, the Company's ability to source and complete asset acquisitions, and
the Company's ability to execute its plans and strategies.

Although Southern believes that the expectations and assumptions on which the
forward-looking statements are based are reasonable, undue reliance should not
be placed on the forward-looking statements because Southern can give no
assurance that they will prove to be correct. Since forward-looking statements
address future events and conditions, by their very nature they involve
inherent risks and uncertainties. Actual results could differ materially from
those currently anticipated due to a number of factors and risks. These
include, but are not limited to, risks associated with the oil and gas
industry in general (e.g., operational risks in development, exploration and
production, the uncertainty of reserve estimates, the uncertainty of estimates
and projections relating to production, that there is no assurance that the
lender will grant waivers or amendments to the Company's senior term loan,
costs and expenses, regulatory risks, and health, safety and environmental
risks), constraint in the availability of labour, supplies, or services, the
impact of pandemics, commodity price and exchange rate fluctuations, credit
risk, risk of default, geo-political risks, political and economic
instability, the imposition or expansion of tariffs imposed by domestic and
foreign governments or the imposition of other restrictive trade measures,
retaliatory or countermeasures implemented by such governments, including the
introduction of regulatory barriers to trade and the potential effect on the
demand and/or market price for the Company's products and/or otherwise
adversely affects the Company, wars (including the Russo-Ukrainian war and the
Israel-Hamas conflict), hostilities, civil insurrections, inflationary risks
including potential increases to operating and capital costs, changes in
legislation impacting the oil and gas industry, including but not limited to
tax laws, royalties and environmental regulations (including greenhouse gas
emission reduction requirements and other decarbonization or social policies
and including uncertainty with respect to the interpretation of omnibus Bill

C-59 and the related amendments to the Competition Act (Canada)), risks
related to the Company's ability to meet its financial obligations and
covenants, adverse weather or break-up conditions, and uncertainties resulting
from potential delays or changes in plans with respect to exploration or
development projects or capital expenditures. These and other risks are set
out in more detail in Southern's latest Management Discussion and Analysis for
the period ended June 30, 2025 and the Company's annual information form for
the year ended December 31, 2024, which are available on the Company's website
at www.southernenergycorp.com and filed under the Company's profile on SEDAR+
at www.sedarplus.ca.

The forward-looking information contained in this press release is made as of
the date hereof and Southern undertakes no obligation to update publicly or
revise any forward-looking information, whether as a result of new
information, future events or otherwise, unless required by applicable
securities laws. The forward-looking information contained in this press
release is expressly qualified by this cautionary statement.

Future Oriented Financial Information. This press release contains
future-oriented financial information and financial outlook information
(collectively, "FOFI") about Southern's capital expenditures, general and
administrative expenses, hedging, natural gas pricing and prospective results
of operations and production, all of which are subject to the same
assumptions, risk factors, limitations, and qualifications as set forth in the
above paragraphs. FOFI contained in this document was approved by management
as of the date of this document and was provided for the purpose of providing
further information about Southern's future business operations. Southern and
its management believe that FOFI has been prepared on a reasonable basis,
reflecting management's best estimates and judgments, and represent, to the
best of management's knowledge and opinion, the Company's expected course of
action. However, because this information is highly subjective, it should not
be relied on as necessarily indicative of future results. Southern disclaims
any intention or obligation to update or revise any FOFI contained in this
document, whether as a result of new information, future events or otherwise,
unless required pursuant to applicable law. Readers are cautioned that the
FOFI contained in this document should not be used for purposes other than for
which it is disclosed herein. Changes in forecast commodity prices,
differences in the timing of capital expenditures, and variances in average
production estimates can have a significant impact on the key performance
measures included in Southern's guidance. The Company's actual results may
differ materially from these estimates.

Specified Financial Measures. This press release provides various financial
measures that do not have a standardized meaning prescribed by International
Financial Reporting Standards ("IFRS"), including non-IFRS financial measures,
non-IFRS financial ratios and capital management measures. These specified
financial measures may not be comparable to similar measures presented by
other issuers. Southern's method of calculating these measures may differ from
other companies and accordingly, they may not be comparable to measures used
by other companies. Adjusted Funds Flow from Operations, adjusted working
capital and net debt are not recognized measures under IFRS. Readers are
cautioned that these specified financial measures should not be construed as
alternatives to other measures of financial performance calculated in
accordance with IFRS. These specified financial measures provide additional
information that management believes is meaningful in describing the Company's
operational performance, liquidity and capacity to fund capital expenditures
and other activities. Please see below for a brief overview of all specified
financial measures used in this release and refer to the Company's MD&A
for additional information relating to specified financial measures, which is
available on the Company's website at www.southernenergycorp.com and filed
under the Company's profile on SEDAR+ at www.sedarplus.ca.

"Adjusted Funds Flow from Operations" (non-IFRS financial measure) is
calculated based on cash flow from operative activities before changes in
non-cash working capital and cash decommissioning expenditures. Management
uses adjusted funds flow from operations as a key measure to assess the
ability of the Company to finance operating activities, capital expenditures
and debt repayments.

"Adjusted Funds Flow from Operations per Share" (non-IFRS financial measure)
is calculated by dividing Adjusted Funds Flow from Operations by the number of
Southern shares issued and outstanding.

"Net Debt" (capital management measure) is monitored by management, along with
adjusted working capital, as part of its capital structure in order to fund
current operations and future growth of the Company. Net debt is defined as
long-term debt plus adjusted working capital surplus or deficit. Adjusted
working capital is calculated as current assets less current liabilities,
removing current derivative assets/liabilities, the current portion of bank
debt, the warrant liability, and the current portion of lease liabilities.

 Neither the TSX Venture Exchange nor its Regulation Services Provider (as
that term is defined in the policies of the TSX Venture Exchange) accepts
responsibility for the adequacy or accuracy of this release.

 

 1  (#_ftnref1) Comprised of 23 bbl/d light and medium crude oil, 35 bbl/d of
condensate, 0 bbl/d NGLs and 12,109 Mcf/d conventional natural gas

 2  (#_ftnref2) See "Reader Advisories - Specified Financial Measures"

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