Star Metro - Southern Energy Corp. Announces Fourth Quarter And Year End 2025 Financial And Operating Results

All figures referred to in this news release are denominated in U.S. dollars, unless otherwise noted.

FEBRUARY FINANCING

• On February 12, 2026, the Company completed a financing and royalty transaction with certain arm's-length investors pursuant to which it issued the 2026 Debentures (as defined below) and common shares in the capital of the Company ("Common Shares") and granted a 6% gross overriding royalty ("GORR") on its existing and future developed production (collectively, the "February Financing"). The Company issued 17,000 $1,000 face value senior secured convertible debentures (the "2026 Debentures") for gross proceeds of $17.0 million, 30.0 million new Common Shares at a price of CAD$0.07 ($0.05) per Common Share for gross proceeds of CAD$2.1 million ($1.5 million) and received $5.0 million of proceeds from the sale of the gross overriding royalty. The February Financing generated aggregate net proceeds of approximately $22.0 million, which were used in part to repay and retire the Company's senior credit facility (the "Credit Facility"), with the remainder intended to fund development capital and general corporate purposes. The 2026 Debentures mature on December 31, 2028, and bear interest at 7% per annum.

• On a pro-forma basis, following the February Financing, Southern exited Q1 2026 with no senior bank debt, extended maturities to December 31, 2028, and materially reduced its annual cash interest (15% to 7%) burden.

FOURTH QUARTER AND YEAR END 2025 HIGHLIGHTS

• Petroleum and natural gas sales of $4.6 million during Q4 2025 and $18.0 million for the year ended December 31, 2025, an increase of 17% and 12% from the same periods in 2024, respectively

• Generated $0.7 million of Adjusted Funds Flow from Operations¹ in Q4 2025 ($0.00 per share basic and diluted), and generated $3.0 million for the year ended December 31, 2025 ($0.01 per share basic and diluted) reflecting improved realized pricing and cost discipline despite lower production

• Average production of 11,600² Mcfe/d (1,933 boe/d) (93% natural gas) during Q4 2025 and 12,039³ Mcfe/d (2,007 boe/d) (96% natural gas) for the year ended December 31, 2025, a decrease of 14% and 21% from the same periods in 2024, respectively, primarily due to the voluntary shut-in of approximately 400 boe/d of production in May 2025 from the Mechanicsburg and Greens Creek Fields due to an ongoing transportation dispute with a third party pipeline operator

• Average realized natural gas and oil prices for Q4 2025 of $3.93/Mcf and $57.40/bbl, compared to $2.78/Mcf and $68.59/bbl in Q4 2024. Southern achieved an average premium of $0.41/Mcf (approximately 12% above the NYMEX HH benchmark) throughout 2025

• Net loss of $3.7 million ($0.01 per share basic and diluted) and $7.5 million ($0.03 per share basic and diluted) for the three and twelve months ended December 31, 2025, respectively

• Reduced Net Debt⁴ for the year ended December 31, 2025 by $4.1 million from December 31, 2024, prior to the transformational February Financing that fully retired the higher cost Credit Facility

• On April 8, 2025, Southern closed an equity financing raising aggregate gross proceeds of $5.0 million (approximately £3.9 million, CAD$7.2 million) through the issuance of a total of 102,482,673 units comprised of one common share and one common share purchase warrant (the "Units") (see "Shareholders' Equity - Share Capital" in the December 31, 2025 MD&A for full details)

• On April 8, 2025, Southern converted the remaining convertible debentures (the "Debentures") in the amount of $3.1 million into 62,759,286 Units and issued 1,627,170 Units for all accrued and unpaid interest (see "Liquidity and Capital Resources - Debenture Financing" in the December 31, 2025 MD&A for full details)

• 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.

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

"2025 marked a year of resilience and progress for Southern, as we navigated a challenging commodity environment while continuing to strengthen our financial position and demonstrate the quality of our asset base. We delivered growth in revenues and funds flow, achieved a consistent premium to NYMEX pricing of approximately 12%, and reduced Net Debt through disciplined capital management. These results highlight the strategic advantage of our Gulf Coast positioning and our focus on operational execution.

Subsequent to year-end, we completed a transformative financing that de-risked the balance sheet and represents a true inflection point for the Company. The transaction generated approximately $22 million in net proceeds, enabled the full repayment of our higher-cost senior Credit Facility, materially improved liquidity, and aligned long-term capital with asset level performance. With a simplified and more flexible capital structure, lower cost of capital and aligned funding tied to asset performance, we are now well positioned to accelerate development and unlock the value of our resource base.

With materially lower leverage, no bank debt maturities, and development capital now fully funded, Southern enters 2026 positioned to convert its extensive proved developed producing ("PDP") and undeveloped reserve base into sustainable free cash flow.

Looking forward, the outlook for natural gas continues to strengthen, underpinned by growing LNG export capacity, increasing power demand and the emerging impact of data center-driven energy consumption. With premium market exposure, a strengthened balance sheet and a clear development runway, Southern is entering 2026 with strong momentum and a focus on executing high-return opportunities to drive meaningful, long-term value for shareholders."

Financial Highlights

Note:

1. See "Reader Advisories - Specified Financial Measures".

Operations Update

In late Q1 2026, Southern conducted a low-cost acid treatment on its second Gwinville LSC DUC horizontal well, the GH LSC 14-06 #4. This test was designed to evaluate whether future wells in the naturally fractured Selma Chalk could be developed using an openhole, multi-lateral design, eliminating the need for high-cost hydraulic fracture stimulation.

A 50-stage acid treatment was performed on the GH LSC 14-06 #4 lateral using approximately 2,000 gallons of 7.5% HCl per stage to access the reservoir behind the production casing cement. Total cost for the treatment was approximately $700,000, including well equipping, tie-in, and tubing installation.

The well has been producing for 22 days and has averaged approximately 500 Mcf/d over that initial flowback. Southern will continue to monitor production performance and decline trends to determine whether additional fracture stimulation is warranted.

The cost to drill and complete a single 5,000-foot horizontal lateral with multi-stage fracture stimulation is approximately $4.3 million. In contrast, an openhole, unstimulated multi-lateral well is estimated to cost $2.5 - 3.0 million, depending on the number of laterals and total openhole length, representing a cost reduction of more than 40%.

While unstimulated laterals may deliver lower initial production rates than stimulated wells, the objective of this evaluation is to determine whether the materially lower costs and reduced decline rates associated with a multi-lateral design can deliver superior overall economics. Although early production results are encouraging, the well remains in the evaluation phase and commercial repeatability has not yet been established.

With the recent rise in oil pricing, Southern also added perforations to a producing oil well ("Adcox #3 Well") in its Magee field which has yielded excellent results. The Adcox #3 Well has been producing at > 80 bbl/d of oil since April 1 and successfully paid out the capital expenditure in approximately two days.

Southern has initiated the regulatory, surface and mineral land processes to permit the drilling of its first Cotton Valley test well in the Williamsburg Field. It is expected that this well will spud as early as June 2026. More information on the location, timing and capital allocation of this well will be provided in the coming weeks.

Southern will continue to monitor regional natural gas prices over the coming months before deciding when to complete the remaining Gwinville City Bank DUC well. Because the City Bank reservoir is not suitable for a low-cost acid treatment, the well will require a multi-stage hydraulic fracture stimulation for completion.

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. On April 6, 2026, FERC issued an order ("FERC Order") directing both parties to enter immediate settlement discussions before a settlement judge. If those discussions are unsuccessful, the matter may proceed to an evidentiary hearing. Based on the timelines outlined in the FERC Order, a hearing outcome would likely occur in the second half of 2026.

2025 Year End Reserves Update

The Company is pleased to announce selected highlights of Southern's year end independent oil and gas reserves evaluation as of December 31, 2025.

Estimates of the Company's reserves and related estimates of net present value of future net revenues as at December 31, 2025, are based upon reports (the "NSAI Report") prepared by Southern's independent qualified reserves evaluator, Netherland, Sewell and Associates, Inc. ("NSAI"). All currency amounts are in United States dollars (unless otherwise stated) and comparisons refer to December 31, 2024.

Reserve Highlights:

The NSAI Report states:

• PDP reserves of 5.8 MMboe,

• Proved reserves ("1P") of 13.7 MMboe,

• Proved + Probable reserves ("2P") of 25.3 MMboe, and

• a PDP reserve life index of nine years and 38 years for 2P reserves based on the 2026 PDP production forecast.

Before-tax net present value ("NPV") of reserves, discounted at 10% ("NPV10"), is $29.6 million on a PDP basis, $58.0 million on a 1P basis and $103.7 million on a 2P basis evaluated using the average forecast pricing of four independent reserve evaluators as at January 1, 2026.

In addition to the summary information disclosed in this press release, more detailed information regarding Southern's oil and gas reserves can be found in the AIF, which is available on the Company website and has been filed on SEDAR+ (www.sedarplus.ca).

2025 Independent Qualified Reserve Evaluation

The following tables highlight the findings of the NSAI Report, which has been prepared in accordance with definitions, standards and procedures contained in National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities ("NI 51-101") and the most recent publication of the Canadian Oil and Gas Evaluation Handbook ("COGEH"). All evaluations and summaries of future net revenue are stated prior to the provision for interest, debt service charges or general and administrative expenses and after deduction of royalties, operating costs, estimated well abandonment and reclamation costs, and estimated future capital expenditures. The NSAI Report was based on the average forecast pricing of the following four independent external reserves evaluators: GLJ Ltd, Sproule Associates Limited, McDaniel & Associates Consultants Ltd and Deloitte. Additional reserves information as required under NI 51-101 is included in Southern's AIF, which has been filed on SEDAR+. The numbers in the tables below may not sum due to rounding.

Summary of Reserves Volumes as at December 31, 2025

The Company's reserve volumes and undiscounted future development capital costs are summarized below as at December 31, 2025:

1. Gross working interest reserves before royalty deductions.

The following table outlines the changes in Southern's reserves and reserve life index as at December 31, 2025 compared to December 31, 2024:

1. The Reserve Life Index as at December 31, 2025 is calculated as gross working interest reserves divided by the projected annual PDP production forecast for 2026. See "Reader advisories - Oil and Gas Advisories"

Net Present Value of Future Net Revenue as at December 31, 2025

The following table summarizes the NPV of the Company's reserves (before-tax) as at December 31, 2025. The reserves value on a $/boe basis, discounted at 10% per year, is also summarized for each category.

1. Unit values are based on net reserves. Net reserves are the Company's working interest reserves after deduction of royalties

Forecast Prices Used in Estimates

The following table outlines the forecasted future prices used by NSAI in their evaluation of the Company's reserves at December 31, 2025, which are based on a four-consultant average price forecast. The forecast cost and price assumptions assume increases in wellhead selling prices and consider inflation with respect to future operating and capital costs.

Reserves Reconciliation

The following table sets out the reconciliation of Southern's gross reserves based on forecast prices and costs by principal product type as at December 31, 2025 relative to December 31, 2024.

1. Gross working interest reserves before royalty deductions

2. Technical revisions also include reserves associated with changes in operating costs and commodity price offsets

Outlook

With the completion of the February Financing, Southern plans to advance additional oil and liquids focused projects on its existing assets, as well as completion of the final high-impact City Bank DUC at Gwinville. Southern's near term focus is on disciplined capital deployment aimed at increasing funds flow per share.

The Company continues to benefit from its fixed-price natural gas swap covering 5,000 MMBtu/d at $3.40/MMBtu through December 2026, providing meaningful downside protection. Supported by stronger regional pricing and an improved financial position, Southern is well positioned to execute a disciplined capital program focused on sustainable growth and long-term shareholder value.

Southern will continue to actively monitor NYMEX pricing and basis differentials and remains prepared to opportunistically hedge additional volumes as market conditions evolve. The Company appreciates the ongoing support of its stakeholders and looks forward to providing further updates as it progresses its operational and financial objectives.

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.

For further information about Southern, please visit our website at www.southernenergycorp.com or contact:

About Southern Energy Corp.

Southern Energy Corp. is a natural gas exploration and production company characterized by a stable, low-decline production base, a significant low-risk drilling inventory and strategic access to premium commodity pricing in North America. Southern has a primary focus on acquiring and developing conventional natural gas and light oil resources in the southeast Gulf States of Mississippi, Louisiana, and East Texas. Our management team has a long and successful history working together and have created significant shareholder value through accretive acquisitions, optimization of existing oil and natural gas fields and the utilization of re-development strategies utilizing horizontal drilling and multi-staged fracture completion techniques.

READER ADVISORIES

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

Short Term Results. References in this press release to current production 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.

Unit Cost Calculation. For the purpose of calculating unit costs, natural gas volumes have been converted to a 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.

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 "NGLs" or "natural gas liquids" throughout this press release comprise pentane, butane, propane, and ethane, being all NGLs 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. NI 51-101 includes condensate within the product type of "natural gas liquids". The Company has disclosed condensate as combined with and/or separately from other natural gas liquids in this press release since the price of condensate as compared to other natural gas liquids is currently significantly higher and the Company believes that this crude oil and condensate presentation provides a more accurate description of its operations and results.

Reserves and Future Net Revenue Disclosure. All reserves values, future net revenue and ancillary information contained in this press release are derived from the NSAI Report unless otherwise noted. All reserve references in this press release are "Company gross reserves". Company gross reserves are the Company's total working interest reserves before the deduction of any royalties payable by the Company. Estimates of reserves and future net revenue for individual properties may not reflect the same level of confidence as estimates of reserves and future net revenue for all properties, due to the effect of aggregation. There is no assurance that the forecast price and cost assumptions applied by NSAI in evaluating Southern's reserves will be attained and variances could be material. All reserves assigned in the NSAI Report are located in the State of Mississippi and presented on a consolidated basis.

All evaluations and summaries of future net revenue are stated prior to the provision for interest, debt service charges or general and administrative expenses and after deduction of royalties, operating costs, estimated well abandonment and reclamation costs and estimated future capital expenditures. It should not be assumed that the estimates of future net revenues presented in the tables below represent the fair market value of the reserves. The recovery and reserve estimates of Southern's crude oil, natural gas liquids and natural gas reserves provided herein are estimates only and there is no guarantee that the estimated reserves will be recovered. Actual crude oil, natural gas and natural gas liquids reserves may be greater than or less than the estimates provided herein. There are numerous uncertainties inherent in estimating quantities of crude oil, reserves and the future cash flows attributed to such reserves. The reserve and associated cash flow information set forth herein are estimates only.

Proved reserves are those reserves that can be estimated with a high degree of certainty to be recoverable. It is likely that the actual remaining quantities recovered will exceed the estimated proved reserves. Probable reserves are those additional reserves that are less certain to be recovered than proved reserves. It is equally likely that the actual remaining quantities recovered will be greater or less than the sum of the estimated proved plus probable reserves. Proved developed producing reserves are those reserves that are expected to be recovered from completion intervals open at the time of the estimate. These reserves may be currently producing or, if shut-in, they must have previously been on production, and the date of resumption of production must be known with reasonable certainty. Undeveloped reserves are those reserves expected to be recovered from known accumulations where a significant expenditure (e.g., when compared to the cost of drilling a well) is required to render them capable of production. They must fully meet the requirements of the reserves category (proved, probable, possible) to which they are assigned. Certain terms used in this press release but not defined are defined in NI 51-101, CSA Staff Notice 51-324 - Revised Glossary to NI 51-101, Revised Glossary to NI 51-101, Standards of Disclosure for Oil and Gas Activities ("CSA Staff Notice 51‐324") and/or the COGEH and, unless the context otherwise requires, shall have the same meanings herein as in NI 51-101, CSA Staff Notice 51-324 and the COGEH, as the case may be.

Oil and gas metrics. This press release contains metrics commonly used in the oil and natural gas industry which have been prepared by management, such as "reserves life index" and "development capital". These terms do not have a standardized meaning and the Company's calculation of such metrics may not be comparable to the calculation method used or presented by other companies for the same or similar metrics, and therefore should not be used to make such comparisons. Management uses these oil and gas metrics for its own performance measurements and to provide shareholders with metrics to compare the Company's operations over time. Readers are cautioned that the information provided by these metrics, or that can be derived from the metrics presented in this press release, should not be relied upon for investment or other purposes. "Reserve life index" is calculated as total company interest reserves divided by expected annual PDP production, for the year indicated. "Development capital" means the aggregate exploration and development costs incurred in the financial year on reserves that are categorized as development. Development capital presented herein excludes land and capitalized administration costs but includes the cost of acquisitions and capital associated with acquisitions where reserve additions are attributed to the acquisitions.

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

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, sustainable growth of the Company and long-term value creation, forecasted natural gas pricing including growing LNG export capacity and the emerging impact of data centre-driven energy consumption, Southern's ability to re-initiate growth in deploying the net proceeds from the equity financing on capital expenditures, drilling and completion plans including spudding of the Cotton Valley well, 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 and production volumes in the Mechanicsburg and Greens Creek fields (including the timing thereof and anticipated costs and funding as well as the evaluation of well performance, including the GH LSC 14-06 #4 well 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 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 including lower decline rate from multi-lateral 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 6% GORR and 2026 Debentures, the Company's ability to continue as a going concern, availability of alternative debt and equity financing opportunities, 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 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.

Although Southern believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because Southern can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, risks associated with the oil and gas industry in general (e.g., operational risks in development, exploration and production, the uncertainty of reserve estimates, the uncertainty of estimates and projections relating to production, costs and expenses, regulatory risks including the risk of an adverse result of the evidentiary hearing should the FERC Order prove to be unsuccessful, and health, safety and environmental risks), constraint in the availability of labour, supplies, or services, the impact of pandemics, commodity price and exchange rate fluctuations, credit risk, risk of default, impact of the newly granted GORR, geo-political risks, political and economic instability, the imposition or expansion of tariffs imposed by domestic and foreign governments or the imposition of other restrictive trade measures, retaliatory or countermeasures implemented by such governments, including the introduction of regulatory barriers to trade and the potential effect on the demand and/or market price for the Company's products and/or otherwise adversely affects the Company, wars (including the Russo-Ukrainian war, the U.S.-Iran conflict and the Israel-Hamas conflict), hostilities, civil insurrections, inflationary risks including potential increases to operating and capital costs, changes in legislation impacting the oil and gas industry, including but not limited to tax laws, royalties and environmental regulations (including greenhouse gas emission reduction requirements and other decarbonization or social policies and including uncertainty with respect to the interpretation of omnibus BillC-59 and the related amendments to the Competition Act (Canada)), risks related to 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 December 31, 2025 and the Company's annual information form for the year ended December 31, 2025, 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

The forward-looking information contained in this press release is made as of the date hereof and Southern undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, unless required by applicable securities laws. The forward-looking information contained in this press release is expressly qualified by this cautionary statement.

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 outlook. The Company's actual results may differ materially from these estimates.

Specified Financial Measures. This press release provides various financial measures that do not have a standardized meaning prescribed by International Financial Reporting Standards ("IFRS"), including non-IFRS financial measures, non-IFRS financial ratios and capital management measures. These specified financial measures may not be comparable to similar measures presented by other issuers. Southern's method of calculating these measures may differ from other companies and accordingly, they may not be comparable to measures used by other companies. Adjusted Funds Flow from Operations, adjusted working capital and net debt are not recognized measures under IFRS. Readers are cautioned that these specified financial measures should not be construed as alternatives to other measures of financial performance calculated in accordance with IFRS. These specified financial measures provide additional information that management believes is meaningful in describing the Company's operational performance, liquidity and capacity to fund capital expenditures and other activities. Please see below for a brief overview of all specified financial measures used in this release and refer to the Company's MD&A for additional information relating to specified financial measures, which is available on the Company's website at www.southernenergycorp.com and filed under the Company's profile on SEDAR+ at www.sedarplus.ca.

"Adjusted Funds Flow from Operations" (non-IFRS financial measure) is calculated based on cash flow from operative activities before changes in non-cash working capital and cash decommissioning expenditures. Management uses adjusted funds flow from operations as a key measure to assess the ability of the Company to finance operating activities, capital expenditures and debt repayments.

"Adjusted Funds Flow from Operations per Share" (non-IFRS financial measure) is calculated by dividing Adjusted Funds Flow from Operations by the number of Southern shares issued and outstanding and are rounded to the nearest cent.

"Net Debt" (capital management measure) is monitored by management, along with adjusted working capital, as part of its capital structure in order to fund current operations and future growth of the Company. Net debt is defined as long-term debt plus adjusted working capital surplus or deficit. Adjusted working capital is calculated as current assets less current liabilities, removing current derivative assets/liabilities, the current portion of bank debt, the warrant liability, and the current portion of lease liabilities.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

¹ See "Reader Advisories - Specified Financial Measures"

² Comprised of 89 bbl/d light and medium crude oil, 39 bbl/d of condensate, nil bbl/d NGLs and 10,832 Mcf/d conventional natural gas

³ Comprised of 40 bbl/d light and medium crude oil, 43 bbl/d of condensate, 3 bbl/d NGLs and 11,523 Mcf/d conventional natural gas

⁴ See "Reader Advisories - Specified Financial Measures"

SOURCE: Southern Energy Corp.

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