REG - Southern Energy Corp - COMPLETION OF EQUITY FINANCING

Southern EnergyAnnouncement

08/04/2025 14:30

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RNS Number : 1715E  Southern Energy Corp.  08 April 2025

THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR
INDIRECTLY, IN OR INTO THE UNITED STATES (ITS TERRITORIES OR POSSESSIONS),
AUSTRALIA, JAPAN, NEW ZEALAND, THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER
JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE
UNLAWFUL.

THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND DOES NOT CONSTITUTE:
(A) A PROSPECTUS OR OFFERING MEMORANDUM; (B) AN ADMISSION DOCUMENT PREPARED IN
ACCORDANCE WITH THE AIM RULES; OR (C) AN OFFER FOR SALE OR SUBSCRIPTION OF ANY
SECURITIES IN THE COMPANY.  THIS ANNOUNCEMENT DOES NOT CONSTITUTE OR CONTAIN,
AND SHOULD NOT BE CONSTRUED AS, ANY INVITATION, SOLICITATION, RECOMMENDATION,
OFFER OR ADVICE TO ANY PERSON TO SUBSCRIBE FOR, OTHERWISE ACQUIRE OR DISPOSE
OF ANY SECURITIES OF SOUTHERN ENERGY CORP. IN ANY JURISDICTION IN WHICH ANY
SUCH OFFER OR SOLICITATION WOULD BE UNLAWFUL.

THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED BY THE COMPANY TO
CONSTITUTE INSIDE INFORMATION AS STIPULATED UNDER THE MARKET ABUSE REGULATION
(REGULATION 596/2014/EU) AS IT FORMS PART OF UK DOMESTIC LAW PURSUANT TO THE
EUROPEAN UNION (WITHDRAWAL) ACT 2018, AS AMENDED. UPON PUBLICATION OF THIS
ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS INSIDE INFORMATION IS
NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.

 

SOUTHERN ENERGY ANNOUNCES COMPLETION OF

EQUITY FINANCINGS TO RAMP UP LIQUIDS-RICH GAS PRODUCTION IN A PREMIUM-PRICED
U.S. NATURAL GAS MARKET

 

Calgary, Alberta - April 8, 2025 - Southern Energy Corp. ("Southern" or the
"Company") (TSXV:SOU) (AIM:SOUC), a U.S.-focused, growth-oriented natural gas
producer, is pleased to announce that it has closed its previously announced
equity financing for aggregate gross proceeds of US$5.0 million (approximately
£3.9 million, C$7.2 million) through the issue of 102,482,673 new Units at a
price of C$0.07 or 3.8 pence per Unit. The equity offering was previously
announced by the Company via press release on March 12, 2025 and March 25,
2025.

The Fundraising was comprised of US$3.2 million via a Prospectus Offering of
65,435,521 Units and £1.4 million (approximately US$1.8 million) via a
Placing of 37,047,152 Units. Each Unit consists of one new Common Share and
one Common Share purchase Warrant. Each Warrant entitles the holder to
subscribe for and purchase one Common Share at an exercise price of price of
C$0.09 per Common Share (in the case of the Prospectus Offering) and 4.8 pence
(in the case of the Placing) or at any time until April 8, 2028.

The net proceeds of the Fundraising alongside cashflow will be used by the
Company 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 funding the drilling of two vertical Cotton Valley
wells on its Mechanicsburg acreage.

Ian Atkinson, President and CEO of Southern, commented:

"With this capital raise completed we are excited to re-ignite our growth plan
picking up where we left off in the Gwinville field and bringing the first of
three DUCs into production as quickly as we can get equipment into the field.
As we add material new production in a much higher U.S. natural gas price
environment, with the current average for the remainder of the year at
>US$4.00/MMbtu (equivalent to C$5.65/MMbtu), we expect shareholders will
benefit significantly in the near-term.

With anticipated IRRs of over 80% for our Gwinville DUCs, the allocation of
our capital here is expected to be highly accretive to shareholders and allow
us to boost production at a resurgent time for the US natural gas market.
Longer term, we have identified over 100 additional horizontal locations at
Gwinville, which gives Southern the running room for further growth alongside
many other exciting higher liquids weighting hydrocarbon targets in our
portfolio. I'd like to welcome our new shareholders to the register and thank
current shareholders for their support as we enter a period of positive
momentum for Southern's compelling growth story."

 

Prospectus Offering and Placing

Research Capital Corporation acted as sole agent and sole bookrunner (the
"Canadian 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 Limited acted as joint
bookrunners (the "UK Joint Bookrunners") in connection with the Placing.

In connection with the Prospectus Offering, the Company filed an amended and
restated prospectus supplement dated 26 March 2025 amending and restating the
prospectus supplement dated 14 March 2025 (as amended, the "Supplement"), to
the Company's short form base shelf prospectus dated 28 November 2024 (the
"Shelf Prospectus"), with the securities regulatory authorities in each of the
provinces of Canada.  Copies of the Supplement, the Shelf Prospectus  and
the documents incorporated by reference therein are available electronically
on SEDAR+ (www.sedarplus.ca
(https://url.avanan.click/v2/___https:/c212.net/c/link/?t=0&l=en&o=4319414-1&h=1523921601&u=http%3A%2F%2Fwww.sedarplus.ca%2F&a=www.sedarplus.ca___.YXAzOnNvdXRoZXJuZW5lcmd5Y29ycDphOm86YjFhYzAzMGUyNWIyMzZiZjk4NTBmZmQ5ZmVhM2E1MWU6Njo0NDVmOmZmNGQ4NGY5ZjdhNWExZmFlMjc4YjdlNDk0MDZlNTVkZjU5Y2NjYTliNDcyMmFmNmIwODE5NWZmOTVmODQxZTc6cDpUOk4)
).

Certain directors and officers of the Company, constituting persons
discharging managerial responsibilities ("PDMRs") of the Company for the
purposes of the Market Abuse Regulation (Regulation 596/2014/EU) as it forms
part of UK domestic law pursuant to the European Union (Withdrawal) Act 2018
(the "UK MAR"), participated in the Prospectus Offering, acquiring an
aggregate of  2,218,500 Units for gross proceeds of US$0.1 million.
Participation by the directors and officers in the Prospectus Offering was
considered a "related party transaction" pursuant to Multilateral Instrument
61-101 - Protection of Minority Security Holders in Special
Transactions ("MI 61-101"). The Company was exempt from the requirements to
obtain a formal valuation or minority shareholder approval in connection with
the insiders' participation in the Prospectus Offering in reliance on sections
5.5(a) and 5.7(1)(a) of MI 61-101 in that the fair market value (as determined
under MI 61-101) of the consideration for securities of the Company to be
issued to related parties does not exceed 25% of the Company's market
capitalization (as determined under MI 61-101). The FCA notifications relating
to the participation by PDMRs, made in accordance with the requirements of the
UK MAR, are appended below.

The Company has granted the Canadian Bookrunner an option, exercisable in
whole or in part, at the sole discretion of the Canadian Bookrunner, at any
time, from time to time, for a period of 30 days from and including the
closing of the Prospectus Offering, to purchase from the Company up to an
additional 15% of the Units sold under the Prospectus Offering, and/or the
components thereof, on the same terms and conditions of the Prospectus
Offering to cover over-allotments, if any, and for market stabilization
purposes.

In connection with the Prospectus Offering, the Canadian Bookrunner was paid a
cash commission of C$0.2 million, which was equal to 6% of the gross proceeds
of the Prospectus Offering (reduced to 2% in respect of subscribers on the
Company's president's list) and was issued 3,030,693 non-transferrable
compensation warrants (the "Compensation Warrants") entitling the Canadian
Bookrunner to purchase up to 3,030,693 Common Shares, such number of
Compensation Warrants being equal to 6% of the number of Units sold pursuant
to the Prospectus Offering (reduced to 2% in respect of subscribers on the
Company's president's list). The Compensation Warrants have an exercise price
of C$0.07 per Common Share and are exercisable at any time until April 8,
2028. In connection with the Placing, the UK Joint Bookrunners were paid a
cash commission of £0.1 million, which was equal to 6% of the gross proceeds
of the Placing and were issued 1,902,111 Compensation Warrants, which was
equal to 6% of the number of Units sold pursuant to the Placing.

The Company has entered into a third supplemental indenture to the indenture
governing the outstanding convertible unsecured subordinated debentures (the
"Debentures") which provides for the previously announced Debenture Amendment,
pursuant to which an amount equal to US$3.1 million, representing 102.5% of
the principal amount outstanding under the Debentures, will convert into Units
at a price of C$0.07 per Unit and such Units will be subject to customary lock
up provisions. In addition, new Common Shares will be issued for all accrued
and unpaid interest as of the conversion date at C$0.07 per new Common Share.
Accordingly, 64,269,032 new Common Shares and 62,759,286 Warrants will be
issued pursuant to the conversion of the Debentures in accordance with the
Debenture Amendment (the "Debenture Conversion").

 

Admission and Total Voting Rights

 

Application has been made to the London Stock Exchange for the 166,751,705 new
Common Shares to be issued pursuant to the Fundraising and Debenture
Conversion to be admitted to trading on AIM and to the TSXV. It is expected
that admission will become effective, and that dealings in such new Common
Shares will commence on AIM at 8.00 a.m. (BST) on or around 9 April 2025
("Admission"). The new Common Shares shall be credited as fully paid and rank
pari passu in all respects with the existing Common Shares.

 

Following Admission, the total number of Common Shares in the Company in issue
will be 336,137,529. The Company does not hold any Common Shares in Treasury,
therefore this figure may be used by shareholders as the denominator for the
calculations by which they will determine if they are required to notify their
interest in, or a change to their interest in the Company under the FCA's
Disclosure Guidance and Transparency Rules.

 

 

Defined terms used in this announcement have the same meaning given to them as
defined in the Company's announcements released on 25 March 2025 and 2 April
2025 unless otherwise defined herein.

 

For further information, please contact:

 Southern Energy Corp.

 Ian Atkinson (President and CEO)                                 +1 587 287 5401

 Calvin Yau (CFO)                                                 +1 587 287 5402

 Research Capital Corporation - Lead Agent & Sole Bookrunner      +1 403 750 1280

 Kevin Shaw                                                       kshaw@researchcapital.com
 Tennyson Securities - Joint Bookrunner & Joint Broker            +44 (0) 20 7186 9033

 Peter Krens / Jason Woollard

 Hannam & Partners - Joint Bookrunner                              +44 (0) 20 7907 8500

 Samuel Merlin / Leif Powis
 Strand Hanson Limited - Nominated & Financial Adviser            +44 (0) 20 7409 3494

 James Spinney / James Bellman / Rob Patrick
 Camarco                                                          +44 (0) 20 3757 4980

 Owen Roberts / Sam Morris / Tomisin Ibikunle

About Southern Energy Corp.

Southern Energy Corp. is a natural gas exploration and production company.
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.

 

PDMR Disclosures

 

 1.          Details of the person discharging managerial responsibilities / person closely
             associated
 a)          Name                                                         1.   Ian Atkinson

                                                                          2.   Calvin Yau

                                                                          3.   Gary McMurren

                                                                          4.   Reginald Steven Smith

                                                                          5.   Bruce Beynon

                                                                          6.   John Nally
 2.          Reason for the Notification
 a)          Position/status                                              1.   Director, President & CEO

                                                                          2.   Chief Financial Officer

                                                                          3.   Chief Operating Officer

                                                                          4.   Non-Executive Director

                                                                          5.   Non-Executive Director

                                                                          6.   Non-Executive Director
 b)          Initial notification/Amendment                               Initial Notification
 3.          Details of the issuer, emission allowance market participant, auction
             platform, auctioneer or auction monitor
 a)          Name                                                         Southern Energy Corp.
 b)          LEI                                                          213800R25GL7J3EBJ698
 4.          Details of the transaction(s): section to be repeated for (i) each type of
             instrument; (ii) each type of transaction; (iii) each date; and (iv) each
             place where transactions have been conducted
 a)          Description of the Financial instrument, type of instrument  Common shares of no par value in Southern Energy Corp.

             Identification code                                          ISIN: CA8428133059

 b)          Nature of the transaction                                    Subscription for new Common Shares

 c)          Price(s) and volume(s)                                       Price(s)  Volume(s)
                                                                          1.  C$0.07    539,486
                                                                          2.  C$0.07    160,857
                                                                          3.  C$0.07    518,057
                                                                          4.  C$0.07    571,500
                                                                          5.  C$0.07    428,600
                                                                          6.  3.8p      285,297
 d)          Aggregated information:

             ·Aggregated volume                                           N/A, single transactions

             ·Price
 e)          Date of the transaction                                      8 April 2025
 f)          Place of the transaction                                     Outside a trading venue

d)

Aggregated information:

·Aggregated volume

·Price

 

N/A, single transactions

e)

Date of the transaction

8 April 2025

f)

Place of the transaction

Outside a trading venue

 

 

 1   Details of the person discharging managerial responsibilities / person closely
     associated
 a)  Name                                                         Neil Smith
 2   Reason for the notification
 a)  Position/status                                              Non-Executive Director
 b)  Initial notification /Amendment                              Initial notification
 3   Details of the issuer, emission allowance market participant, auction
     platform, auctioneer or auction monitor
 a)  Name                                                         Southern Energy Corp.
 b)  LEI                                                          213800R25GL7J3EBJ698
 4   Details of the transaction(s): section to be repeated for (i) each type of
     instrument; (ii) each type of transaction; (iii) each date; and (iv) each
     place where transactions have been conducted
 a)  Description of the financial instrument, type of instrument  Common shares of no par value in Southern Energy Corp.

     Identification code                                          ISIN: CA8428133059

 b)  Nature of the transaction                                    Issuance of new Common Shares as conversion of Debentures and payment in kind
                                                                  of accrued interest on Debentures held
 c)  Price(s) and volume(s)                                       779,746 new Common Shares at a price of C$0.07
 d)  Aggregated information                                       N/A, single transaction

 e)  Date of the transaction                                      8 April 2025
 f)  Place of the transaction                                     Outside of a trading venue

 

 

Forward Looking Statements

 

Certain information included in this announcement 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" or
similar words suggesting future outcomes or statements regarding an outlook.
Forward-looking information in this announcement may include, but is not
limited to, statements concerning the use of proceeds of the Fundraising, the
Common Shares and Warrants to be issued pursuant to the conversion of the
Debentures in accordance with the Debenture Amendment, the Company's business
strategy, objectives, strength and focus and the Company's capital program for
the remainder of 2025.

 

The forward-looking statements contained in this announcement are based on
certain key expectations and assumptions made by Southern, including 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 facilities and pipelines, the geological
characteristics of Southern's properties, the characteristics of its assets,
the successful application of drilling, completion and seismic technology,
benefits of current commodity pricing hedging arrangements, prevailing weather
conditions, prevailing legislation affecting the oil and gas industry,
commodity prices, royalty regimes and exchange rates, the application of
regulatory and licensing requirements, the availability of capital, labour and
services, the creditworthiness of industry partners and the ability to source
and complete asset acquisitions.

 

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, the risk that the Company may apply the
proceeds of the Fundraising differently than as stated herein depending on
future circumstances; 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, costs and expenses, and health, safety and
environmental risks), constraint in the availability of services,  commodity
price and exchange rate fluctuations, geo-political risks, political and
economic instability abroad, wars (including Russia's military actions in
Ukraine and the Israel-Palestinian conflict), increased operating and capital
costs due to inflationary pressures, changes in legislation impacting the oil
and gas industry, 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 the Supplement, the Shelf Prospectus and
Southern's most recent management's discussion and analysis and annual
information form, which are available under the Company's SEDAR+ profile at
www.sedarplus.ca.

 

The forward-looking information contained in this announcement 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
announcement is expressly qualified by this cautionary statement.

 

Market Abuse Regulation

 

The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse Regulation
(EU) No. 596/2014 as it forms part of United Kingdom domestic law by virtue of
the European Union (Withdrawal) Act 2018, as amended.

 

Neither 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.

 

This announcement is not for publication or distribution, directly or
indirectly, in or into the United States of America.  This announcement is
not an offer of securities for sale into the United States.  The securities
referred to herein have not been and will not be registered under the U.S.
Securities Act of 1933, as amended, and may not be offered or sold in the
United States, except pursuant to an applicable exemption from registration.
No public offering of securities is being made in the United States.

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