Q2 2025 Financial And Operating Results

SOUTHERN ENERGY CORP. ANNOUNCES SECOND QUARTER 2025 FINANCIAL AND OPERATING RESULTS AND INFORMATION REGARDING THE ANNUAL MEETING OF SHAREHOLDERS

Calgary, Alberta - August 19, 2025 - Southern Energy Corp. ("Southern" or the "Company") (TSXV:SOU) (AIM:SOUC), an established producer with natural gas and light oil assets in Mississippi, announces its second quarter financial and operating results for the three and six months ended June 30, 2025. 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 and six months ended June 30, 2025, 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.

SECOND QUARTER 2025 HIGHLIGHTS

• Petroleum and natural gas sales of $4.0 million during Q2 2025, an increase of 3% from the same period in 2024, largely due to the 61% increase in Q2 2025 natural gas pricing over Q2 2024
• Average production of 11,2951 Mcfe/d (1,883 boe/d) (96% natural gas) during Q2 2025, a decrease of 27% from the same period in 2024
• In June 2025, Southern successfully completed the second of its four high quality drilled uncompleted horizontal wells ("DUCs") from the Q1 2023 drilling program - the GH Lower Selma Chalk ("LSC") 13-13 #2 wellbore. The operation was completed safely and under budget
• Average realized natural gas and oil prices for Q2 2025 of $3.63/Mcf and $62.60/bbl, compared to $2.26/Mcf and $80.06/bbl in Q2 2024. Southern achieved an average premium of $0.19/Mcf (approximately 6%) above the NYMEX HH benchmark in Q2 2025
• Generated $0.6 million of Adjusted Funds Flow from Operations2 in Q2 2025 ($0.00 per share basic and diluted)
• Net loss of $0.4 million ($0.00 per share basic and diluted) in Q2 2025, compared to a net loss of $2.6 million in Q2 2024
• On April 8, 2025, Southern closed an equity financing raising aggregate gross proceeds of $5.0 million (approximately £3.9 million, C$7.2 million) through the issuance of a total of 102,482,673 new units (see "Shareholders' Equity - Share Capital" in the June 30, 2025 MD&A for full details)
• On April 8, 2025, Southern converted the remaining convertible debentures in the amount of $3.1 million into 62,759,286 new units and issued 1,627,170 new units for all accrued and unpaid interest (see "Liquidity and Capital Resources - Debenture Financing" in the June 30, 2025 MD&A for full details of the conversion)

1 Comprised of 23 bbl/d light and medium crude oil, 43 bbl/d of condensate, 5 bbl/d NGLs and 10,869 Mcf/d conventional natural gas

2 See "Reader Advisories - Specified Financial Measures"

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

"Southern continued to build momentum through the second quarter of 2025, supported by firming natural gas prices and the successful completion in late June of the GH LSC 13-13 #2 well in our Gwinville field, marking a key milestone in the redevelopment of our LSC inventory. Early flowback results are highly encouraging and we are particularly pleased to have completed this well at 10% below our original budget, accelerating expected payouts and reinforcing the economic viability of our broader development program.

Following our $5.0 million financing in April, Southern resumed field operations with a focus on efficiency and value creation. The GH LSC 13-13 #2 well has already begun contributing significant new volumes with minimal incremental operating cost and benefited from an approximate 17% premium to Henry Hub pricing due to rising Southeast U.S. power demand during the start of summer. This premium underscores the strategic advantage of our geographic positioning and the strengthening macro backdrop.

Looking ahead, we expect these new volumes to materially enhance our Q3 2025 cash flow profile. With a constructive outlook for natural gas pricing into the back half of 2025 and into 2026, combined with two additional high-quality DUCs, a deep inventory of drilling opportunities and ongoing capital discipline, Southern is well-positioned to deliver meaningful shareholder value through the remainder of the year and beyond."

Financial Highlights

Note:

• See "Reader Advisories - Specified Financial Measures".

Operations Update

In June 2025, Southern successfully completed the first of its three remaining DUC horizontal wells from the Q1 2023 drilling program, and its first LSC lateral - 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), which is an increase of over 100% compared to the average of the original LSC horizontal wells in Gwinville that were drilled and completed by the previous operators. The well has been flowing directly to Company facilities with all gas sold since June 26, 2025.

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

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.

Southern continues to work with Federal Energy Regulatory Commission ("FERC") staff to resolve the ongoing transportation dispute that resulted in the shut-in of approximately 400 boe/d of production from the Mechanicsburg and Greens Creek fields. Based on prescribed FERC resolution timelines, the Company expects the rate determination process to be resolved sometime in Q3 2025, at which point these production volumes will come back on-line.

Outlook

Southern has taken meaningful steps to strengthen its financial position in 2025, including the successful $5.0 million equity financing in April 2025, conversion of convertible debentures, and restructuring of financial covenants with lender support. These actions, combined with the early success of the GH LSC 13-13 #2 well and two additional DUCs in Gwinville, provide a clear runway for disciplined growth.

The Company also continues to benefit from a fixed-price swap of 5,000 MMBtu/d at $3.40/MMBtu through December 2026, offering downside protection. With improved regional pricing and a strengthened financial foundation, Southern is well-positioned to execute its capital program and generate long-term shareholder value.

We appreciate the continued support of our stakeholders and look forward to providing further updates on our operational progress as we work to drive long-term shareholder value.

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 Monday, October 27, 2025 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.

Peter Krens / Jason Woollard

About Southern Energy Corp.

READER ADVISORIES

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

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

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

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

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", "continue", "evaluate", "forecast", "may", "will", "can", "target" "potential", "result", "could", "should" or similar words suggesting future outcomes or statements regarding an outlook (including negatives and variations thereof). 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 anticipated operational results, Southern's growth strategy and the expectation that it will continue to enhance shareholder value, Southern's expectation that improved regional pricing and a strengthened financial foundation will support execution of its capital program and long-term value creation, forecasted natural gas pricing, Southern's ability to re-initiate growth in deploying the net proceeds from the equity financing on capital expenditures, drilling and completion plans, expectations regarding commodity prices and service costs, expectations regarding the performance characteristics of the Company's oil and natural gas properties, the Company's hedging strategy and execution thereof (including its intention to continue monitoring commodity prices and basis differentials and to hedge additional volumes as deemed appropriate), the ability of the Company to achieve drilling success consistent with management's expectations, the Company's expectations regarding completion of the two remaining DUCs and the drilling operations in the Mechanicsburg and Greens Creek fields (including the timing thereof and anticipated costs and funding as well as the evaluation of well performance and regional natural gas pricing to inform such decisions), the Company's expectations regarding the resolution of regulatory disputes (including the anticipated timing thereof) and impact of FERC rate determinations on shut-in production volumes, the expected contribution of the GH LSC 13-13 #2 well to Q3 2025 cash flow, the Company's ability to realize sustained pricing premiums due to its strategic location in the Southeast U.S., the effect of market conditions on the Company's performance and expectations regarding the use of proceeds from all sources including the senior term loan. 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 Company's ability to comply with ongoing obligations under the senior term loan 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.

C-59 and the related amendments to the Competition Act (Canada)), the Company's ability to meet its financial obligations and covenants, adverse weather or break-up conditions, and uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures. These and other risks are set out in more detail in Southern's latest Management Discussion and Analysis for the period ended June 30, 2025 and the Company's annual information form for the year ended December 31, 2024, which are available on the Company's website at www.southernenergycorp.com and filed under the Company's profile on SEDAR+ at www.sedarplus.ca.

Future Oriented Financial Information. This press release contains future-oriented financial information and financial outlook information (collectively, "FOFI") about Southern's capital expenditures, general and administrative expenses, hedging, natural gas pricing 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.