Southern Energy Corp, an established producer with natural gas and light oil assets in Mississippi, has announced its first quarter financial and operating results for the three months ended March 31, 2025.
All figures referred to in this news release are denominated in U.S. dollars, unless otherwise noted.
FIRST QUARTER 2025 HIGHLIGHTS
- Petroleum and natural gas sales of $5.1 million during Q1 2025, an increase of 7% from the same period in 2024, largely due to the increase in natural gas pricing
- Average realized natural gas and oil prices for Q1 2025 of $4.14/Mcf and $71.19/bbl, compared to $2.53/Mcf and $74.86/bbl in Q1 2024. Southern achieved an average premium of $0.49/Mcf (approximately 13%) above the NYMEX HH benchmark in Q1 2025
- Average production of 12,808[1] Mcfe/d (2,135 boe/d) (96% natural gas) during Q1 2025, a decrease of 29% from the same period in 2024
- Generated $0.9 million of Adjusted Funds Flow from Operations[2] in Q1 2025 ($0.00 per share basic and diluted), excluding $0.3 million of one-time transaction costs
- Net loss of $3.9 million ($0.02 per share basic and diluted), compared to a net loss of $3.1 million in Q1 2024
- Entered into various amendments to the Company's senior secured term loan which included an extension to the pausing of monthly repayments of principal to January 31, 2025 and a reduction of the repayment required from the eighth amendment to $1.45 million as at January 31, 2025, which the Company paid. Amended the monthly repayment of the principal amount outstanding calculation beginning on February 28, 2025 and amended the asset coverage ratio down to 1.5x in 2025 as well as reducing the Tranche B capacity to $5.0 million (see "Liquidity and Capital Resources - Credit Facility" in the March 31, 2025 MD&A for full details of the amendment)
SUBSEQUENT EVENTS
- 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 March 31, 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 March 31, 2025 MD&A for full details of the conversion)
1 Comprised of 81 bbl/d light and medium crude oil, 5 bbl/d NGLs and 12,292 Mcf/d conventional natural gas
2 See “Reader Advisories - Specified Financial Measures”
Ian Atkinson, President and Chief Executive Officer of Southern, commented:
'Southern entered 2025 with renewed momentum, benefiting from both improved market conditions and the completion of our $5.0 million financing in April 2025. Natural gas prices showed early signs of recovery in the quarter, supported by strengthening demand fundamentals, from a colder than expected winter and tightening supply.
Robust natural gas pricing in Q1 2025 enabled Southern to achieve a $0.49/Mcf (13%) premium to the Henry Hub benchmark price. We remain encouraged by the macro outlook with strong demand forecasts, tied to lower storage levels compared to last year. Feed gas demand from U.S. LNG export facilities continues to rise, with the Golden Pass terminal and pipeline expected to begin receiving gas this year. Domestic consumption is also strengthening, led by growing power demand from data centers and widespread electrification of the economy. Combined with continued capital discipline across the upstream sector, we believe these dynamics will support a tighter U.S. natural gas balance throughout the year, which we aim to capitalise on.
With the recent financing complete and natural gas prices firming, we are excited to resume field operations, beginning with the first of three drilled but uncompleted wells in our Gwinville area. We have secured key services and will shortly commence operations on the 13-13 #2 Lower Selma Chalk horizontal well, with first production expected in June.
Southern remains committed to creating long-term shareholder value through disciplined capital deployment, operational efficiency, and strategic advantages of our asset base. With improving market tailwinds and a clear path to near-term production growth, we are optimistic about the opportunities that lie ahead in 2025'.
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Source: Southern Energy
