Southern Energy Corp. · TSXV:SOU
Southern Energy — Investor Presentation (September 2022)
25 slides from Southern Energy's investor presentation, September 2022
Slide 1: Positioned for Growth
Positioned for Growth Corporate Presentation September 2022 TSXV : SOU
Slide 2: Q2/Q3 2022 Activity Update
Q2/Q3 2022 Activity Update Gwinville Appraisal Results Financing Approved $34.4 MM Budget Successfully proved the ability to Finalizing all major service and achieve superior deliverability Closed $31 MM equity financing to fund the 2022/23 capital program equipment contracts compared to historic we
Slide 3: Recent North American Gas Pricing Dynamics
Recent North American Gas Pricing Dynamics Continued Premium Pricing in the SE Gulf States North American Gas Pricing - Average Daily Spot $12.00 • Canadian gas pricing has recently fallen at a significantly higher rate than Henry Hub, reflecting the traditional “end of pipe” issues common to Canadi
Slide 4: Positioned for Significant Growth
Positioned for Significant Growth Southern Energy is a growing, cash generative, conventional gas producer in the southeast United States High quality assets attracting premium North American pricing SOUC, SOU.V • Production receives essentially undiscounted NYMEX (Henry Hub), LLS pricing Trading Sy
Slide 5: Southern Energy Business Plan – Focused on Value Creation
Southern Energy Business Plan – Focused on Value Creation Low-Risk Organic Development Drilling & Reserves Growth Accretive PDP Acquisitions Focus Area ✓ Large scale, under-developed assets ✓ Disciplined consolidation strategy Strong Base & Asset Optimization with low historic recovery from utilizin
Slide 6: Gwinville – Large Scale Natural Gas Redevelopment
Gwinville – Large Scale Natural Gas Redevelopment Significant Underdeveloped Gas Resource Gwinville Field – Jefferson Davis County, MS • 1+ Tcf OGIP in Selma Chalk, current recovery ~ 15% Multi Tcf Gas in Place Bcf MMbbl • Multi-zone production of 1.5 Tcf, 12 MMbbl, historical decline < 10%, with ad
Slide 7: Gwinville Selma Chalk Appraisal Program
Gwinville Selma Chalk Appraisal Program Appraisal Program Results • Successfully drilled and completed 3 economic HZ Upper Selma Chalk wells Selma Chalk Structure • Costs executed within 20% of budget estimate, despite higher inflationary pressures • Gathered key reservoir, geology and operational d
Slide 8: Q4 2022 Gwinville Long Term Drilling Program
Q4 2022 Gwinville Long Term Drilling Program Program Planning • Program designed with the goal of obtaining key well results to aid in future planning and new horizon reserves booking • Key services and tangible equipment secured for both phases of program • Drilling Rig | Casing | Proppant Phase 1:
Slide 9: Gwinville Type Well Economics
Gwinville Type Well Economics Base Case – Gen 2 Type Well Assumes Gen 2 Type Well (4,500’ lateral, 5.7 MMcf/d IP30 and 4.3 Bcf EUR) and $5.0 MM per well Flat Gas Price Forecast ($/MMBTU) $4.00 $5.00 $6.00 $7.00 Capital $10.00 $9.00 $8.00 Operating Income $7.00 $6.00 $5.00 $4.00 $3.00 $2.00 $1.00 $0.
Slide 10: Organic Development Activity Driving Growth
Organic Development Activity Driving Growth Significant Gwinville Growth Model – Selma Chalk Only Significant Growth Opportunities Based on Generation 2 type curve results Conservative single rig program < 8 months/year (15 wells) Southern has multiple development 20,000 opportunities across the Mis
Slide 11: Eight Years of Operating History Has Formed Strategic Advantage
Eight Years of Operating History Has Formed Strategic Advantage Strategic Advantage Consolidation & Development Focus Area • Self-generated opportunities utilizing proprietary database • Digital workflow has proven management successful in previous companies Oklahoma • Allows for a significant amoun
Slide 12: Southern Energy Summary
Southern Energy Summary Immediate, meaningful growth in production and cash flow from recent drilling program realized in Q3 2022 Medium to long term growth in cash flow, reserves & production through fully funded organic development • Initiate long term, self-funded organic growth in Q4 2022 • Valu
Slide 13: Appendix
Appendix TSXV: SOU, AIM: SOUC www.southernenergycorp.com 12
Slide 14: Mississippi Oil & Gas History – Home of Core Assets
Mississippi Oil & Gas History – Home of Core Assets Mississippi Oil & Gas Highlights > 2.0 > 10 > 34,000 Billion bbl cumulative oil Tcf cumulative gas Wells drilled to date • Significant hydrocarbon recovery – Superior production on a per well basis than Texas or Louisiana • First commercial oil wel
Slide 15: Core Southern Energy Asset Base
Core Southern Energy Asset Base > 29,000 Acres ~ 3,376 boe/d $88.3 MM < $4.00/boe (> 97% HBP) Daily Production (1) 2P PV10 (2) Lifting/Processing Cost Mechanicsburg Magee Mississippi • Liquids rich (> 25 bbl/MMcf oil & NGL) 325 35 • Field production > 10 MMbbl • Field covered by 53 mi2 3D boe/d boe/
Slide 16: Appraisal Program Results – Proof of Concept
Appraisal Program Results – Proof of Concept Successfully drilled and completed 3 HZ Selma Chalk wells with planned frac intensity GH 19-3 #2 IP30 6.5 MMcf/d 3,498’ Lateral Length 41 Frac Stages Costs executed within 20% of budget estimate, despite higher industry inflationary pressures 90% In Targe
Slide 17: Effect of Enhanced Seismic and Directional Technology
Effect of Enhanced Seismic and Directional Technology New D&C strategies provide line of sight to improved results on future program Rotary Steerable System Proprietary 3D Seismic has been re-interpreted to improve target window identification Southern is replacing a conventional mud motor with a sp
Slide 18: Leadership Team
Leadership Team Experienced and successful management team with a history of creating shareholder value together Strong technical expertise combined with a modern approach to data and workflow creates proven early mover advantage Ian Atkinson Calvin Yau Gary McMurren Erin Buschert Jim McFadyen Presi
Slide 19: Board of Directors
Board of Directors Experienced and talented leadership to guide the Execution of Southern Energy’s Business Plan Board of Directors Special Advisor Ian Atkinson, P. Eng., ICD.D Bruce Beynon, P. Geol. (Chairman) Jay D. Haber Former founder and EVP of Athabasca Oil Former EVP, Exploration and Corporat
Slide 20: Modern Energy Company - Environment, Social & Governance
Modern Energy Company - Environment, Social & Governance Southern’s near term mission is to support the U.S. transition to cleaner sources of electricity generation by delivering low cost, conventional natural gas Central Mississippi Operations Team Core Values at Southern – Not Buzz Words Environme
Slide 21: Tightening of the U.S. Gas Supply / Demand Balance
Tightening of the U.S. Gas Supply / Demand Balance Positioning Southern for the Future of Natural Gas Southern Proximity to expanding LNG Export Markets The U.S. Gas Depletion Story: 2022 and Beyond • Unprecedented production of ~ 100 Bcf/d with annual decline rate of > 27% • 2016 – 2019 U.S. shale
Slide 22: Hedging Summary
Hedging Summary Hedging Position: • At August 1, 2022: Natural Gas: Deal Type Term Start Date End Date Volume (MMBtu/d) Index Strike Swap Option Bal22 01-Apr-22 31-Dec-22 4,000 NYMEX HH $ 3.100 Swap Option Bal22 01-Mar-22 31-Dec-22 2,000 NYMEX HH $ 4.610 Costless Collar Win22/23 01-Nov-22 31-Mar-23
Slide 23: Disclaimers
Disclaimers General The information contained herein has been provided solely for information purposes and does not purport to be comprehensive or contain all the information that may be required by recipients to evaluate Southern Energy Corp. ("Southern" or the "Company"). This Presentation and the
Slide 24: Disclaimers
Disclaimers Due to various risks and uncertainties, actual events or results or actual performance of the Company may differ materially from those reflected or contemplated in such forward-looking statements. As a result, any potential investor should not rely on such forward-looking statements in m
Slide 25: Disclaimers
Disclaimers Non-GAAP Measures In this Presentation, certain key metrics, performance indicators, and industry benchmarks are used to analyze financial and operating performance. These performance indicators and benchmarks are used by Southern as key measures of profitability, and provide investors w
Southern Energy — Investor Presentation (September 2022) on 6ix