Preliminary Gwinville Completion Results

Calgary, Alberta - January 16, 2024 - 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 announce 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 #3 wellbore. Over the first 20 days of production, natural gas rates from the well exceeded 6.5 MMcf/d and averaged 5.3 MMcf/d under restricted flowing conditions as the well cleans up, recovering approximately 33% 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 US$2.1 million, well below budget estimates. Costs for this completion operation are approximately 40% 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 #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 (2) 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% 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 #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."

Owen Roberts / Billy Clegg / Hugo Liddy

About Southern Energy Corp.

READER ADVISORY

Product Types. 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.

Short‐Term Production. References in this press release to peak rates, IP30 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.

Type Curves. Certain type curves disclosure presented herein represent estimates of the production decline and ultimate volumes expected to be recovered from wells over the life of the well. The type curves represent what management thinks an average well will achieve. Individual wells may be higher or lower but over a larger number of wells, management expects the average to come out to the type curve. Over time, type curves can and will change based on achieving more production history on older wells or more recent completion information on newer wells.

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

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, the ability of the Company to achieve drilling success consistent with management's expectations, the Company's anticipated results from the GH 14-06 #3 wellbore, the Company's expectations regarding costs and completion of the remaining DUC wellbores 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 cost/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, 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 and cash flows, 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.