Southern Energy Corp. ("Southern") (SOU), an established producer with natural gas and light oil assets in Mississippi, announces the release of its third quarter financial and operating results for the three and nine months ended September 30, 2022. Selected financial and operational information is outlined below and should be read in conjunction with the Company's unaudited consolidated financial statements (the "Financial Statements") and related management's discussion and analysis (the "MD&A") for the three and nine months ended September 30, 2022, which are available on the Company's website at www.southernenergycorp.com and have been filed on SEDAR.
All figures referred to in this news release are denominated in U.S. dollars, unless otherwise noted.
THIRD QUARTER 2022 HIGHLIGHTS
- $8.3 million of adjusted funds flow from operations in Q3 2022 ($0.06 per share basic and diluted) compared to a loss of $0.2 million in Q3 2021 ($0.00 per share basic and diluted) and $14.1 million for the nine months ended September 30, 2022 ($0.14 per share basic and $0.13 per share diluted), an increase of 907% from the same period in 2021
- Net earnings of $6.6 million ($0.05 per share basic and $0.04 per share diluted) and $7.6 million ($0.08 per share basic and $0.07 per share diluted) for the three and nine months respectively ended September 30, 2022 as compared to net earnings of $4.3 million ($0.10 per share basic and $0.07 per share diluted) and $6.8 million ($0.18 per share basic and $0.15 per share diluted) in the same period of 2021, an increase of 53% and 12% as compared to the prior periods, respectively
- Petroleum and natural gas sales of $19.2 million in Q3 2022, an increase of 268% from the same period in 2021
- Q3 2022 average production of 20,449 Mcfe/d (3,408 boe/d) (96% natural gas), an increase of 67% from the same period in 2021
- Average realized natural gas and oil prices for Q3 2022 of $10.00/Mcf and $91.93/bbl, respectively, reflecting the benefit of strategic access to premium-priced US sales hubs in a geographic region with strong industrial and power generation natural gas demand
- On July 7, 2022, successfully closed a $17.5 million bought deal prospectus offering in Canada and a $13.5 million placing in the UK, raising aggregate gross proceeds of $31.0 million
- Exited Q3 2022 with a Net Debt Surplus1 of $20.4 million
- Successfully renegotiated an increase of $25.0 million borrowing capacity (currently undrawn) with its current lender in respect of its senior secured term loan (the "Credit Facility") to increase the total Credit Facility to $35.0 million (details of which are provided within the MD&A and Financial Statements)
Ian Atkinson, President and CEO of Southern, commented:
"Our Q3 results have displayed that with a strong underlying production base and exposure to high prevailing commodity prices, and in particular the $10.00/Mcf our gas production has achieved, our business can provide significant cash flows and valuable capital to further our ambitious growth plans. Our recent equity financing and credit facility expansion will allow us to accelerate the organic growth strategy portion of our goal to reach 25,000 boe/d. The success of the first three wells at Gwinville has already increased our corporate production by over 100% and we remain truly excited at the future potential of this asset. We now look forward to beginning a long-term development drilling program, starting in Q4 2022, to unlock shareholder value due to the significant reserves, production and cashflow growth in Gwinville. This upcoming program will utilize the learnings from the three well program in Q2 as well as drill horizontal lateral lengths of up to 6,500 ft in length. The vast company owned infrastructure at Gwinville allows for quick conversion from capex to cashflow in this next phase of development which will support our fundamental strategy of both organic and inorganic growth of natural gas weighted assets in the Gulf Coast area of the United States in a timely fashion. We look forward to updating the market once we have results from the initial phase of our development plan which we expect will act as a significant catalyst to unlock the value in the current share price."