Completion Of Equity Financing

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).

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.

About Southern Energy Corp.

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