Q1 2024 Results And Information Regarding The AGM

SOUTHERN ENERGY CORP. ANNOUNCES FIRST QUARTER 2024 FINANCIAL AND OPERATING RESULTS AND INFORMATION REGARDING THE ANNUAL MEETING OF SHAREHOLDERS

Calgary, Alberta - May 28, 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, announces its first quarter financial and operating results for the three months ended March 31, 2024. 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 months ended March 31, 2024, which are available on the Company's website at www.southernenergycorp.com and have been filed under the Company's profile on SEDAR+ at www.sedarplus.ca.

FIRST QUARTER 2024 HIGHLIGHTS

• Average production of 18,055[1] Mcfe/d (3,009 boe/d) (96% natural gas) during Q1 2024, an increase of 15% from the same period in 2023
• Petroleum and natural gas sales of $4.8 million in Q1 2024, a decrease of 8% from the same period in 2023, largely due to the decline in natural gas pricing
• Generated $2.2 million of adjusted funds flow from operations[2] in Q1 2024 ($0.01 per share basic and diluted)
• Net loss of $3.1 million in Q1 2024 ($0.02 net loss per share - basic and fully diluted), compared to a net loss of $1.1 million in Q1 2023
• Average realized natural gas and oil prices for Q1 2024 of $2.53/Mcf and $74.86/bbl compared to $3.25/Mcf and $75.73/bbl in Q1 2023
• Entered into the sixth amendment (the "Sixth Amendment") to the Company's senior secured term loan (the "Credit Facility"), which among other amendments, included extending the term of the Credit Facility from August 31, 2025 to December 31, 2026 (see "Liquidity and Capital Resources - Credit Facility" in the March 31, 2024 MD&A for full details of the amendment)
• Monetized the Company's fixed price swap derivative contracts to take advantage of the positive unrealized gain position, realizing net proceeds of $1.1 million

SUBSEQUENT EVENTS

• Entered into a fixed price swap derivative contract of 5,000 MMBtu/d for the period of May 2024 - December 2026 at a price of $3.40/MMBtu

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

"The Company's Q1 2024 results show the resilience of our business in an environment which experienced one of the warmest winters in U.S. recorded history. Along with the warm weather came low heating demand for natural gas and supressed pricing. Our focus has been on improving our already low-cost structure, which our operations team has done an excellent job of executing. As we look to the second quarter and second half of our financial year, we are already seeing a significant recovery in excess of 50% from the recent lows in natural gas pricing which we expect will allow us to re-initiate growth in completing one of the three remaining Gwinville drilled but uncompleted wells ("DUCs").

"While low natural gas prices may have been a feature for the period, the recent correction in U.S. natural gas prices along with the structural dynamics of the market are extremely encouraging for a business with Southern's exposure to natural gas. As the price weakness during the first quarter was met with a significant cut in production from several of the large U.S. gas producers, demand from seven of the largest LNG export plants, including Freeport LNG in Texas, continue to experience significant increases. This huge demand driver for U.S. natural gas is only set to increase further as new Gulf Coast LNG export facilities start accepting feed gas later this summer as well as growing domestic demand from artificial intelligence data centers and electrification of vehicles. Additionally, with the early heat in the U.S. Southeast, we are seeing basis premiums where we sell a portion of our natural gas of close to $1.00/MMBtu for the summer.

"We remain focussed on costs with a solid balance sheet and retain our position of being able to capitalise on gas prices by bringing on increased volumes in short order. As gas maintains its position as a crucial part of future energy security in the U.S., we see a significant re-rating opportunity in the current share price and we look forward to updating shareholders as we unlock the value in our portfolio."

Financial Highlights

Three months ended March 31,

Note:

• See "Reader Advisories - Specified Financial Measures".

Operations Update

Production in Q1 2024 was positively impacted by bringing online the first of its four drilled but uncompleted DUCs from the Q1 2023 drilling program, the GH 14-06 #3 wellbore. This lateral hole was drilled and completed in the Upper Selma Chalk reservoir and achieved an IP30 natural gas rate of 5.2 MMcf/d, with declines in the quarter in-line with pre-drill expectations.

Southern is planning to delay the completion timing of the remaining three DUCs into at least the second half of 2024 when the Company expects natural gas pricing to be significantly elevated from current levels. The remaining three DUC wellbores have been drilled in the Lower Selma Chalk (2) and City Bank formations.

In response to the low natural gas prices experienced in Q1 2024, Southern has been actively reducing and optimizing operating costs, general and administrative expenses and maintenance capital to maximize our netbacks. The Company expects to continue these initiatives throughout 2024.

The strategic sales points that Southern sells its natural gas into realized a 13% premium to the average benchmark New York Mercantile Exchange ("NYMEX") Henry Hub price in Q1 2024, helping to offset the challenging natural gas pricing environment.

Outlook

Southern currently has $10.0 million of unused capacity on its Credit Facility, which can be utilized to complete the DUCs at higher natural gas prices or can be used to be opportunistic with counter-cyclical inorganic growth opportunities.

As part of its risk management and sustainability strategy, Southern continuously monitors both the price of NYMEX, as well as the basis differentials, in order to mitigate some of the volatility of natural gas prices. With the extended term provided by the Sixth Amendment of the Credit Facility, Southern has taken advantage of the contango in the natural gas future strip by entering into a fixed price swap contract of 5,000 MMBtu/d for the period of May 2024 - December 2026 at a price of $3.40/MMBtu. Southern's current commodity hedge program includes:

Annual Meeting of Shareholders

Southern's Annual Meeting of Shareholders is to be held at the Company's offices located at Suite 2400, 333 - 7th Avenue S.W., Calgary, Alberta, T2P 2Z1, on Thursday, June 20, 2024 at 10:00 a.m. (Calgary time) and by webcast via Zoom, formal notice of which is available on the Company's website and on SEDAR+ at www.sedarplus.ca.

Southern Energy Corp.

Owen Roberts / Billy Clegg / Hugo Liddy

About Southern Energy Corp.

READER ADVISORIES

Short Term Results. References in this press release to peak rates, production rates since inception, current production 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. The Company cautions that such results should be considered to be preliminary.

• The reserves information and data provided in this press release presents only a portion of the disclosure required under NI 51-101. Southern's Statement of Reserves Data and Other Oil and Gas Information on Form 51-101F1 dated effective as at December 31, 2023, which will include further disclosure of Southern's oil and gas reserves and other oil and gas information in accordance with NI 51-101 and COGEH forming the basis of this press release, will is included in the AIF which may be viewed on the Company's SEDAR+ profile at www.sedarplus.ca.

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

1P total proved

2P proved plus probable

bbl barrels

bbl/d barrels per day

bcf/d billion cubic feet per day

boe barrels of oil

boe/d barrels of oil per day

IP30 average hydrocarbon production rate for the first 30 days of a well's life

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

MMboe million barrels of oil

MMBtu million British thermal units

MMBtu/d million British thermal units per day

NYMEX New York Mercantile Exchange

PDP proved developed producing

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, positioning, oil and natural gas production levels, the Company's capital budget, anticipated operational results, Southern's 2024 outlook, growth strategy and the expectation that it will continue to grow the business with new and existing shareholders, forecasted natural gas pricing including that they will be significantly elevated from current levels in the second half of 2024, Southern's ability to re-initiate growth in completing one of the there remaining Gwinville DUCs, capital expenditures, Southern's plans to delay the completion timing of the remaining three DUCs until natural gas pricing becomes significantly elevated from current levels and the anticipated timing thereof, drilling and completion plans and casing remediation activities, expectations regarding commodity prices and service costs, the performance characteristics of the Company's oil and natural gas properties, the Company's expectation to continue actively reducing and optimizing operating costs, general and administrative expenses and maintenance capital to maximize netbacks, the Company's hedging strategy and execution thereof, the ability of the Company to achieve drilling success consistent with management's expectations, the Company's expectations regarding completion of the three remaining DUCs (including the timing thereof and anticipated costs and funding), expectations regarding the Credit Facility and the terms thereof, the sources of funding for the Company's activities, the effect of market conditions on the Company's performance, the anticipated use of proceeds from Southern's recent equity financing, outlook in respect of supply and demand dynamics for U.S. natural gas in respect of Gulf Coast LNG export facilities, the Company's risk management activities including hedging positions and targets, expectations regarding the use of proceeds from all sources including the Credit Facility, and the Company's risk management and sustainability strategy. 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 successful integration of recently acquired assets into the Company's operations (including the assets acquired pursuant to the Gwinville Acquisition), the Company's ability to comply with ongoing obligations under the Credit Facility and its convertible debentures and other sources of financing, 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, capital expenditures, tax rates, cost estimates, general and administrative expenses, capital costs, inorganic growth, hedging, natural gas pricing, netbacks, royalty rates, , payout of wells, 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.

[1] Comprised of 112 bbl/d light and medium crude oil, 9 bbl/d NGLs and 17,329 Mcf/d conventional natural gas

[2] See "Reader Advisories - Specified Financial Measures"