Operational Update

Calgary, Alberta - October 17, 2023 - Southern Energy Corp. ("Southern" or the "Company") (TSXV:SOU) (AIM:SOUC)(OTCQX:SOUTF), an established producer with natural gas and light oil assets in Mississippi, is pleased to provide an update on field operations and production, as well as recent financial hedging contracts that have been executed.

Operations Update

Production for the third quarter averaged 2,814 boe/d (95% natural gas), representing a 6% increase over the prior quarter and largely reflecting the impact of the synergistic Gwinville acquisition (the "Transaction") completed in June 2023. Current production is approximately 2,900 boe/d.

At Gwinville, Southern has completed the process of installing the necessary pipeline infrastructure to consolidate the two gathering systems, allowing the Company to run just one central compressor station compared to the five that were running before the Transaction. These synergies will not only remove costly rental compression and allow monetization of spare owned compressors but will also eliminate the need for approximately 250 Mcf/d of fuel gas and associated emissions which can instead be added directly into sales volumes. Additionally, the Company has recently initiated workover operations on two shut-in wells on the acquired lands to re-establish production. The wells were previously producing at a combined rate of approximately 800 Mcf/d.

In September, the Company attempted to mechanically remediate the casing on the 18-10 #3 Upper Selma Chalk horizontal well without success. Subsequently, the heel section of the lateral (10 of 48 stages, 1,060 feet total lateral length, and 740 feet of effective lateral length) was turned over to production and the well is currently flowing at a restricted rate of 1.2 MMcf/d. The Company is considering alternative casing remediation methods for possible execution in Q1 2024.

In light of the recent recovery in U.S. natural gas prices above $3/MMBtu, the Company is also in the process of re-bidding completion services in connection with the four high quality uncompleted horizontal wells at Gwinville.

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

"We are excited with the progress we have made with the Gwinville acquisition integration, realizing quick and incremental value for shareholders through operating cost reductions and now through the start of work to increase production on the asset. At the time of pausing our capital program in Q1 2023, in response to the price of gas reaching $2.00/MMBtu, we had made a significant investment including four drilled uncompleted horizontal wells ("DUCs"), incremental Company owned field compression, wellhead facilities, Company owned water disposal capacity, and well casing for future drilling. This pre-investment positions Southern to expedite our corporate growth in light of the recent improvements in the price of U.S. natural gas and the anticipated drop in the cost of services. We look forward to updating the market further as we make key operational decisions in light of resurgent US natural gas prices."

Recent Financial Hedging Initiatives

With the recent natural gas price recovery, Southern has taken the opportunity to add further hedges, both in the near term and through the 2024 and 2025 calendar years, to protect future cash flows and ensure balance sheet resiliency through the commodity price cycle. Natural gas prices have been under pressure through the beginning of 2023, with the Q2 2023 Henry Hub price averaging $2.10/MMBtu, improving to $2.55/MMBtu in Q3 2023, and is currently at approximately $3.20/MMBtu. The Company's hedge contracts, listed below, will ensure a strong natural gas price floor, allowing Southern the ability to execute and capitalize on its organic operational plans over the coming years.

READER ADVISORY

Throughout this press release, "crude oil" or "oil" refers to light and medium crude oil product types as defined by National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities ("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

MMcf million cubic feet

MMcf/d million cubic feet per day

Mcfe thousand cubic feet equivalent

Mcfe/d thousand cubic feet equivalent per day

MMBtu million British thermal units

MMBtu/d million British thermal units per day

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", "budget", "continue", "evaluate", "forecast", "may", "will", "can", "target" "potential", "result", "could", "should" or similar words suggesting future outcomes or statements regarding an outlook. 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, oil and natural gas production levels, anticipated operational activities and results including, but not limited to, capital expenditures, drilling and completion plans and casing remediation activities, expectations regarding commodity prices, the performance characteristics of the Company's oil and natural gas properties, successful integration of the assets acquired through the Transaction and corresponding cost reductions, the Company's hedging strategy, the ability of the Company to achieve drilling success consistent with management's expectations, the Company's expectations regarding completion of wellbores and DUCs and timing thereof, the sources of funding for the Company's activities, the effect of market conditions on the Company's performance, future organic and inorganic growth and acquisition opportunities within the resource market, and costs/debt reducing activities.

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, including the assets acquired pursuant to the Transaction, the successful integration of recently acquired assets into the Company's operations, 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.

Future Oriented Financial Information. This press release contains future-oriented financial information and financial outlook information (collectively, "FOFI") about Southern's prospective results of operations, cash flows and balance sheet resiliency, 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.