Southern Energy Corp. Announces Successful Cotton Valley Completion Results at Williamsburg

CALGARY, AB / ACCESS Newswire / 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.

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 shareholder value through accretive acquisitions, optimization of existing oil and natural gas fields and re-development strategies including horizontal drilling and multi-staged fracture completion techniques.

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.

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; the Company's anticipated operational results; Southern's growth strategy and the expectation that it will continue to enhance shareholder value; the timing for construction and completion of wellsite facilities and bringing the Terrible Creek 21-2 #2 well on-line; the results of fluid phase testing and the characterization of the reservoir as a gas condensate reservoir; the evaluation of the Hosston and Sligo formations; future development planning for the Cotton Valley interval at Williamsburg, including the number of potential drilling locations, well spacing and the timing and permitting of follow-up wells; the anticipated timing for spudding the next Cotton Valley well and satisfaction of commitments under the Joint Venture Wellbore Participation Agreement; expected development capital costs, drilling efficiencies, completion requirements, initial production rates, recoveries, commodity pricing, well economics and rates of return; the Company's ability to self-fund its organic liquids growth; and the anticipated pricing, netbacks and access to infrastructure associated with future production.

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 and success of well results at Williamsburg, the performance of the Terrible Creek 21-2 #2 well, the availability and performance of drilling rigs, services, facilities and pipelines, the geological characteristics of Southern's properties, the successful application of drilling, completion and seismic technology, estimated drilling and completion costs, the continued participation and creditworthiness of the Company's strategic partner, prevailing legislation, as well as regulatory and licensing requirements affecting the oil and gas industry, the Company's ability to obtain and maintain all requisite permits and licences, the availability of capital, labour and services, 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), risks that drilling, completion or testing activities are delayed, unsuccessful or more costly than expected, risks that the Well's initial flow test results are not indicative of its long-term performance, that fluid phase testing does not confirm a gas condensate reservoir or the anticipated liquids yield, or that follow-up wells do not achieve anticipated results, risks relating to the availability of rigs, equipment, labour, supplies, services, facilities, pipelines, capital and industry partners, commodity price and exchange rate fluctuations, credit risk, risk of default, geo-political risks, political and economic instability, hostilities, wars, 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, environmental regulations and regulatory requirements, 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 June 30, 2026, 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.

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.

SOURCE: Southern Energy Corp.