Operations Update

Calgary, Alberta - July 29, 2025 - Southern Energy Corp. ("Southern" or the "Company") (TSXV:SOU) (AIM:SOUC), an established producer with natural gas and light oil assets in Mississippi, is pleased to announce the preliminary results from its recent Lower Selma Chalk ("LSC") horizontal well completion in the Gwinville Field.

In late June 2025, Southern successfully completed the first of its three remaining drilled but uncompleted ("DUC") horizontal wells from the Q1 2023 drilling program, the GH LSC 13-13 #2 wellbore. Over the first 30 days of production, the well averaged natural gas rates of 3.6 MMcfe/d (99% gas). This is an increase of > 100% compared to the average of the original LSC horizontal wells in Gwinville that were drilled and completed by previous operators. The well has been flowing directly to Company facilities with all gas sold since June 26, 2025.

Southern safely and efficiently stimulated the well with 25 fracture stages, placing over 5.3 million lbs of proppant into the wellbore. This is a 70% increase in proppant intensity compared to the original LSC horizontal wells at Gwinville. Southern implemented targeted stimulation design changes for this first LSC horizontal completion that improved the predictability and speed of the fracture operations, and most importantly, reduced the overall completion cost down to US$2.2 million which is over 10% below pre-job estimates. Additionally, water flowback rates from the LSC reservoir have been over 70% lower than Southern's Upper Selma Chalk horizontal wells, which translates into significant initial operating cost savings of ~ $0.20/Mcfe, further improving capital returns.

With these further cost improvements, the Company now estimates the total capital required to drill, complete, tie-in and equip capital for future Gwinville LSC horizontal wells to be approximately $4.0 million - a reduction of over 20% from previous management estimates and significantly below the $5.0 million estimates in the Company's third-party reserve report(1). Based on a revised LSC type curve with an IP30 rate of 3.6 MMcf/d and a capital cost of $4.0 million, Southern calculates a break-even (15% IRR) at a Henry Hub price of $3.70/MMBtu. This is consistent with previous estimates that assumed higher initial production rates and higher costs and remains competitive with other dry natural gas plays.

Southern will continue to monitor both regional natural gas pricing and well performance from the GH LSC 13-13 #2 over the upcoming months before making a decision on the completion timing of the remaining two DUC wells and will update the market at that time. The remaining two DUC wellbores have been drilled in the LSC and City Bank formations.

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

"We are very pleased with the early flowback results of the GH LSC 13-13 #2 well that will help us establish a long-awaited type curve for the remaining potential 60+ LSC horizontal locations in our vast Gwinville inventory. We expect the lower decline from the LSC reservoir to support the ~ 3.5 Bcfe recovery per well predicted by both management and our third-party reserve evaluator. The Southern operations team has safely executed this operation at 10% below our original completion estimate, which not only drives a much quicker payout on this capital but will also allow Southern to start redeveloping the Gwinville Field much sooner as natural gas prices are still expected to improve materially into the back half of 2025 and continue into 2026.

From a revenue generation perspective, since bringing these significant new production volumes on-line in late June with minimal incremental operating costs, Southern has also greatly benefited from a daily natural gas basis premium of approximately 17% above Henry Hub pricing due to the start of warmer seasonal temperatures and associated natural gas fired power demand in the southeast U.S. which we expect to continue or improve throughout the summer. We look forward to providing these improved cash flow results from additional Q3 volumes in November 2025."

READER ADVISORY

Product Types. Throughout this press release, "crude oil" or "oil" refers to light and medium crude oil product types 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.

Unit Cost Calculation. For the purpose of calculating unit costs, natural gas volumes have been converted to a barrel of oil equivalent ("boe") using six thousand cubic feet equal to one barrel unless otherwise stated. A boe conversion ratio of 6:1 is based upon an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. This conversion conforms with NI 51-101. Boe may be misleading, particularly if used in isolation.

Short Term Results. References in this press release to peak rates, production rates since inception, current production rates, initial 30-day productions rates and 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.

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

Bcfe billion cubic feet equivalent

bcf/d billion cubic feet per day

boe barrels of oil

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

Mcf thousand cubic feet

Mcfe thousand cubic feet equivalent

Mcf/d thousand cubic feet per day

Mcfe/d thousand cubic feet equivalent per day

MMcf/d million cubic feet per day

MMcfe/d million cubic feet equivalent per day

MMBtu million British thermal units

NI 51-101 National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities

• Based on the Netherland, Sewell and Associates, Inc. report dated December 31, 2024 - Total Proved plus Probable estimate