Southern Energy Announces Operations Update & Share Consolidation

Source: www.gulfoilandgas.com 12/10/2021, Location: North America

Southern Energy Corp., a U.S.-focused, growth-oriented natural gas producer, is pleased to announce an update with respect to drilling and operations, and that it will be proceeding with the consolidation of the common shares of the Company (the "Common Shares") previously approved by shareholders of the Company on July 7, 2021.

Drilling and Operations Update
Southern Energy Operating LLC, an operating subsidiary of Southern, has contracted Energy Drilling Company's Rig #15 (the " Rig ") for the upcoming drilling program at its Gwinville asset in central Mississippi. Southern has received drilling permits for three horizontal wells (GH 19-3 No. 2, GH 19-3 No. 3, and GH 19-3 No. 4) targeting natural gas in the Selma Chalk Formation which will be drilled from a single surface pad location. The Rig is expected to move to location in late December 2021 after finishing the well it is currently drilling for another operator.

Ian Atkinson, President & Chief Executive Officer, commented
"We are delighted to initiate the Gwinville drilling program prior to year-end and to partner with Energy Drilling Company from Natchez, Mississippi, who have successfully drilled similar horizontal Selma Chalk wells in the past. We expect the results of this drilling to have a meaningful impact on the Company as we bring on the new production volumes and incremental cash flow prior to the end of Q1 2022. The Gwinville 19-3 surface pad is ready for the drilling rig and its location within Company-owned infrastructure allows us to bring on new production from these wells onstream quickly. This is the beginning of what we believe will be long-term growth at Gwinville providing value for our investors."

Common Share Consolidation
At the annual general and special meeting of shareholders of the Company held on July 7, 2021 (the "Meeting"), a special resolution was passed authorizing and approving the directors of Southern to consolidate the Common Shares. On December 9, 2021, the Company's board of directors approved the consolidation of the Common Shares on the basis of one post-consolidation Common Share for every eight pre-consolidation Common Shares (the "Consolidation"). The board of directors intends to effect the Consolidation to increase the Company's flexibility and competitiveness in the marketplace and make the Company's securities more attractive to a wider audience of potential investors, thereby resulting in a more efficient market for its Common Shares.

The Consolidation will be effective upon the filing of the Articles of Amendment for the Company, and remains subject to the approval of the TSX Venture Exchange (the "TSX-V"). Trading of the Common Shares on a post-Consolidation basis on the TSX-V and AIM is expected to commence on or about December 22, 2021. The record date for the Consolidation will take place on the close of business of the last trading day immediately prior to the date on which the post-Consolidation Common Shares commence trading on the TSX-V.

The 616,901,068 Common Shares currently issued and outstanding will be reduced to approximately 77,122,634 Common Shares on a post-Consolidation basis. No fractional shares will be issued. Any fractional interest in Common Shares that is less than 0.5 of a Common Share resulting from the Consolidation will be rounded down to the nearest whole Common Share and any fractional interest in Common Shares that is equal to or greater than 0.5 of a Common Share will be rounded up to the nearest whole Common Share.

As a result of the Consolidation, there will be certain proportional adjustments to outstanding options and warrants to acquire Common Shares to preserve the rights of holders of such securities to the relevant proportion of the Company's Common Shares post-Consolidation.

Letters of transmittal will be mailed to registered shareholders and registered shareholders will be required to deposit their share certificate(s), together with the duly completed letter of transmittal, with Odyssey Trust Company, the Company's registrar and transfer agent. Non-registered shareholders holding Common Share through an intermediary (a securities broker, dealer, bank or financial institution) should be aware that the intermediary may have different procedures for processing the Consolidation than those that will be put in place by the Company for registered shareholders. If shareholders hold their Common Shares through an intermediary and they have questions in this regard, they are encouraged to contact their intermediaries.


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