TIDMSOUC
RNS Number : 7700Z
Southern Energy Corp.
16 January 2024
SOUTHERN ENERGY CORP. ANNOUNCES
PRELIMINARY GWINVILLE COMPLETION RESULTS
Calgary, Alberta - January 16, 2024 - Southern Energy Corp.
("Southern" or the "Company") (TSXV:SOU) (AIM:SOUC)(OTCQX:SOUTF),
an established producer with natural gas and light oil assets in
Mississippi, is pleased to announce the preliminary results from
its recent Upper Selma Chalk horizontal well completion in the
Gwinville Field. In mid-December 2023, Southern successfully
completed the first of its four drilled but uncompleted ("DUC")
wells from the Company's Q1 2023 drilling program - the GH 14-06 #3
wellbore. Over the first 20 days of production, natural gas rates
from the well exceeded 6.5 MMcf/d and averaged 5.3 MMcf/d under
restricted flowing conditions as the well cleans up, recovering
approximately 33% of load fluid to-date with gas produced flowing
directly to Company owned facilities with all volumes sold.
Southern implemented a number of stimulation design changes for
this latest Upper Selma Chalk horizontal completion that improved
the predictability and efficiency of the fracture operation and,
more importantly, reduced the overall completion cost down to
US$2.1 million, well below budget estimates. Costs for this
completion operation are approximately 40% lower than the two
previous 18-10 pad Upper Selma Chalk wells that were completed
earlier in 2023.
Southern will continue to monitor the early production
performance from the GH 14-06 #3 well over the next couple of
months before making a decision on the completion timing of the
remaining three DUC wells. The remaining DUC wellbores have been
drilled in the Lower Selma Chalk (2) and City Bank formations.
Ian Atkinson, President and Chief Executive Officer of Southern,
commented:
"We are extremely excited to deliver the results of this latest
Upper Selma Chalk horizontal well, which we expect to fall in-line
with our Gen 2 IP30 type curve estimates. The Southern operations
team has successfully analyzed and optimized our early well results
to execute what may be our best well to-date, for a fraction of the
cost of the prior well completions which bodes well for future well
activity. Southern is already selling volumes of gas associated
with its latest well at gas prices up over 30% from November lows.
Improved production rates at lower capital costs will allow
Southern to start redeveloping the Gwinville Field on an
accelerated timeline as natural gas prices are expected to improve
materially into the second half of 2024.
With the success of the completed well, the Company is now
looking forward to deploying these successful design changes on our
first two Lower Selma Chalk laterals and the next City Bank lateral
that remain uncompleted. Our original City Bank horizontal
completion at GH 18-10 #1 has shown no decline since being placed
on production in July 2023. With these updates we remain eager to
highlight the benefits of an optimized completion design
performance in this formation delivering value for the
business."
Qualified Person's Statement
Gary McMurren, Chief Operating Officer, who has over 23 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 :
Southern Energy Corp.
Ian Atkinson (President and CEO) +1 587 287 5401
Calvin Yau (CFO) +1 587 287 5402
+44 (0) 20 7409
Strand Hanson Limited - Nominated & Financial Adviser 3494
James Spinney / James Bellman
+44 (0) 20 7710
Stifel Nicolaus Europe Limited - Joint Broker 7600
Callum Stewart / Ashton Clanfield
+44 (0) 20 7186
Tennyson Securities - Joint Broker 9033
Peter Krens / Pav Sanghera
+44 (0) 20 3757
Camarco 4980
Owen Roberts / Billy Clegg / Hugo Liddy
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 ADVISORY
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.
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 "NGLs" 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.
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.
Short--Term Production. References in this press release to peak
rates, 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.
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
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
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", "budget", "continue", "evaluate", "forecast", "may",
"will", "can", "target" "potential", "result", "could", "should" or
similar words suggesting future outcomes or statements regarding an
outlook. 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, oil
and natural gas production levels, anticipated operational
activities and results including, but not limited to, capital
expenditures, drilling and completion plans and casing remediation
activities, expectations regarding commodity prices, the
performance characteristics of the Company's oil and natural gas
properties, the ability of the Company to achieve drilling success
consistent with management's expectations, the
Company's anticipated results from the GH 14-06 #3 wellbore, the
Company's expectations regarding costs and completion of the
remaining DUC wellbores and timing thereof, the sources of funding
for the Company's activities, the effect of market conditions on
the Company's performance, future organic and inorganic growth and
acquisition opportunities within the resource market, and cost/debt
reducing activities.
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 successful
integration of recently acquired assets into the Company's
operations, 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.
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, and health, safety and environmental risks), constraint in
the availability of labour, supplies, or services, commodity price
and exchange rate fluctuations, geo-political risks, political and
economic instability abroad, wars and hostilities (including the
Russo-Ukrainian War and the Israel-Hamas conflict in Gaza), civil
insurrections, inflationary risks including potential increases to
operating and capital costs, changes in legislation impacting the
oil and gas industry, 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. The Russo-Ukrainian War is particularly noteworthy,
as this conflict has the potential to disrupt the global supply of
oil and gas, and its full impact remains uncertain. These and other
risks are set out in more detail in Southern's management's
discussion and analysis for the period ended September 30, 2023,
and annual information form for the year ended December 31, 2022,
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
prospective results of operations and cash flows, 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.
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.
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulation (EU) No. 596/2014 as it forms part of
United Kingdom domestic law by virtue of the European Union
(Withdrawal) Act 2018, as amended .
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END
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January 16, 2024 02:00 ET (07:00 GMT)
Southern Energy (LSE:SOUC)
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