Operations Update

Calgary, Alberta – October 15, 2026 – 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 completion and initial flow-test results from the Terrible Creek 21-2 #2 Cotton Valley vertical well (the “Well”) in the Williamsburg Field. The Well encountered a Cotton Valley “C” gross interval thickness of approximately 110 feet, which exceeded expectations based on the two previous offset deep wells that were drilled in the 1970s. The Company perforated 71 feet of net pay in the Cotton Valley “C” interval and conducted a 72-hour flow test on the Well without the need for a fracture stimulation. At the end of the flow test period, the Well was flowing at a stabilized rate of 2.3 MMcf/d of natural gas plus 50 barrels of condensate per day (50° API), equivalent to approximately 430 boe/d, on a 32/64” choke at a restricted flowing tubing pressure of 435 psig. The Company is constructing the necessary wellsite facilities and anticipates bringing the Well on production by mid-November 2026.

Analogous Cotton Valley reservoirs at Seminary, Collins and Northeast Collins, which produce from similar depths, have exhibited oil phase behaviour, while the Well’s initial flow test results suggest a gas condensate reservoir. The condensate-rich production stream will increase Southern's liquid weighting while also benefiting from the strong deliverability and recovery characteristics commonly associated with gas condensate reservoirs. Southern is now conducting the necessary fluid phase testing to confirm these details and help plan future development.

Using 2D seismic data, Southern has preliminarily mapped more than 7,200 acres of interpreted four-way closure at the Cotton Valley interval at Williamsburg. Assuming 160-acre spacing, this area could support more than 45 gross potential drilling locations. Based on preliminary estimates of expected development capital costs (material drilling efficiencies identified and no fracture stimulations required) and early estimates of Cotton Valley “C” initial rates and expected recoveries, at the Company’s current forecast liquids and natural gas pricing (including premiums), these future drilling locations are expected to provide high rates of capital return. Southern will monitor production performance after the Well is brought online and provide additional development and economic information when supported by sufficient performance data. The Company currently has no Cotton Valley reserves booked in Williamsburg.

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

“We are very excited with these initial test results from our first Cotton Valley liquids-rich well at Williamsburg. These results support further capital spending on the Cotton Valley “C” interval and allow Southern to advance planning for follow-up development. The Cotton Valley “C” interval was our primary target in this well and we have now established high permeability deliverability with these results. We also encountered five highly prospective zones in the shallower Hosston and Sligo formations which we will evaluate as part of our broader field development strategy. With the cash available on our balance sheet, Southern is positioned to assess a self-funded development program at Williamsburg with liquids production that would receive Louisiana Light Sweet crude pricing at a premium to West Texas Intermediate. The high netback natural gas volumes will directly access Transco Zone 4 premium pricing with no third-party transportation or processing costs as a result of our extensive company-owned infrastructure.”

Southern has initiated the land and regulatory processes required to permit two potential follow-up Cotton Valley drilling locations. Subject to receipt of required approvals, final well planning and capital allocation, the Company anticipates spudding the next well in early Q1 2027. The next well is expected to satisfy the Company’s remaining commitment under its Joint Venture Wellbore Participation Agreement announced on May 26, 2026, being the second of the two commitment wells under that agreement.

New Corporate Presentation

A new corporate presentation highlighting Southern’s recent operational progress and growth opportunities is now available on the Company’s website at www.southernenergycorp.com.

Qualified Person’s Statement

Gary McMurren, Chief Operating Officer, who has over 25 years of relevant experience in the oil industry, has approved the technical information contained in this announcement. Mr. McMurren is registered as a Professional Engineer with the Association of Professional Engineers and Geoscientists of Alberta and received a Bachelor of Science degree in Chemical Engineering (with distinction) from the University of Alberta.

Southern Energy Corp.

Peter Krens / Jason Woollard

About Southern Energy Corp.

READER ADVISORY

BOE Disclosure. Natural gas volumes recorded in thousand cubic feet (“Mcf”) are converted to barrels of oil equivalent (“boe”) using a ratio of six thousand cubic feet of natural gas to one barrel of oil (6 Mcf:1 bbl). Boe may be misleading, particularly if used in isolation. The boe conversion ratio is based on an energy-equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Given that the value ratio based on the current price of oil compared with natural gas is significantly different from the energy-equivalency ratio of 6:1, using a conversion ratio of 6 Mcf:1 bbl may be misleading as an indication of value.

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 “condensate” refer to condensate as defined by NI 51-101, and references to “natural gas” refer to conventional natural gas as defined by NI 51-101.

Short-Term Production Rates. References in this press release to production test 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 the Well will commence production or decline thereafter and are not indicative of long-term performance or ultimate recovery. While encouraging, readers are cautioned not to place reliance on such rates in calculating aggregate production for Southern. The 72-hour flow test was conducted over a limited period under the test conditions described herein and the results should be considered preliminary. No pressure transient analysis or well-test interpretation has been carried out on the Well in respect of the flow test and, accordingly, the test results should be considered preliminary until such analysis or interpretation has been completed. The flow test rates in this press release are reported on a gross (100%) basis. Southern holds a 50% working interest in the Well.

Unbooked Drilling Locations. The potential drilling locations discussed in this press release are unbooked locations and do not have reserves or resources attributed to them. The locations have been identified by management based on the Company’s interpretation of available 2D seismic data, the estimated area of four-way closure and assumed 160-acre well spacing. There is no certainty that Southern will drill all or any of these locations or, if drilled, that such locations will result in additional oil or natural gas production or economically viable wells.

Analogous Information. Information concerning the Seminary, Collins and Northeast Collins fields is presented as analogous information to assist readers in assessing certain characteristics of the Cotton Valley interval at Williamsburg. The Company considers these fields relevant based on their proximity, similar producing formation and similar depth. However, the geology, reservoir characteristics, fluid properties, completion methods and production performance of those fields may differ from Williamsburg, and results from those fields are not necessarily indicative of the results that may be achieved at Williamsburg.