SOUTHERN ENERGY CORP. ANNOUNCES EXECUTION OF A PURCHASE AND SALE AGREEMENT IN RESPECT OF A SYNERGISTIC 400 BOE/D ASSET ACQUISITION TO CONSOLIDATE THE GWINVILLE FIELDv

Southern Energy Corp. ('Southern' or the 'Company') (TSXV: SOU) (AIM: SOUC) (OTCQX: SOUTF) is pleased to announce that it has entered into a definitive agreement with PetroTX Energy, LLC ('PetroTX') to acquire the remaining producing acreage in the Gwinville Field not already owned by the Company (the 'Assets'), in Jefferson Davis County, Mississippi for a cash purchase price of $3.2 million (the 'Transaction').

The Assets are currently producing approximately 400 boe/d (99% natural gas) of high working interest production at less than 8% projected annual decline from over 8,500 acres of held-by-production acreage and include significant redevelopment opportunities in the Selma Chalk formation.

The Company recently initiated a field redevelopment program in Gwinville by employing modern horizontal drilling and multi-stage stimulation techniques on 10 operated wells drilled to date. The Assets are expected to increase well inventory in Gwinville by as much as 20%. The Transaction will allow Southern to design the surface and bottomhole field development plan more efficiently and cost-effectively. The operational synergies that are expected to be realized by integrating the Assets with the Company's existing operations are alone significant enough for the Company to achieve strong financial returns on the Transaction, before any incremental cash flow from the Assets. The Company anticipates that the Asset's operating cost savings of more than 30% are expected to be realized almost immediately after completing the Transaction, primarily driven by the consolidation of infrastructure, staff and services in the Gwinville Field. The Transaction is consistent with the Company's strategy to consolidate stable, low decline, cash flowing assets that have been historically under-capitalized at highly attractive and accretive metrics.

PDP reserves, 2P reserves and PV10 in respect of the Assets have been internally estimated by the Company's Internal Qualified Reserve Evaluator ('QRE') and prepared in accordance with National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities ('NI 51-101') and the most recent publication of the Canadian Oil and Gas Evaluation Handbook ('COGEH'). 'Internally estimated' means an estimate that is derived by the Company's internal QRE and prepared in accordance with NI 51-101. All internal estimates contained in this press release have been prepared effective as of June 1, 2023. Reserves values are based on working interest reserves of the Assets before deduction of royalties and without including any of royalty interest reserves. The cash consideration payable under the Transaction of $3.2 million will be funded through existing capacity from the senior secured term loan (the 'Credit Facility') with Southern's current lender, who is highly supportive of the Transaction. The effective date and proposed closing date of the Transaction is June 1, 2023. The Transaction is highly accretive to Southern from an operating and financial perspective as it will be funded through the current Credit Facility while still maintaining healthy debt to cash flow levels. Southern expects to have approximately $14.5 million of capacity remaining on the Credit Facility after closing the Transaction, which provides ample funds to complete the four drilled but uncompleted wells from the Gwinville drilling program when natural gas prices are supportive. Pursuant to the terms of the Agreement, the Company has also agreed to grant PetroTX minor overriding royalties over two of the Asset's wells, which currently are not producing and would require remedial work to re-commence production, but were each previously producing approximately 400 Mcf/d. Hannam & Partners acting as financial advisor to the Company in relation to the Transaction.

Ian Atkinson, President and CEO of Southern, commented: 'We are very excited to consolidate the Gwinville Field under one operator at an accretive price for our shareholders. This will be the first time this has been done in over 30 years since Selma Chalk and City Bank early exploration and development started in the 1990s. Our team will seek to incorporate these operations with our own, achieving substantial synergies and cost savings that will help drive a very quick return of capital even at current natural gas pricing. The Finding, Development and Acquisition (FD&A) metrics of the Assets are outstanding and will add over 20 Selma Chalk drilling locations to our already deep inventory in the Gwinville Field. The Transaction demonstrates our ability to execute our high value inorganic growth strategy at low cost during periods of weaker natural gas pricing to add accretive, high quality assets to the portfolio that we will eventually grow organically when commodity prices are more supportive.' Southern Energy Corp.

Contact:

Tel: [phone]

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 significant shareholder value through accretive Southern Energy Corp. Ian Atkinson (President and CEO) Calvin Yau (CFO) [phone] [phone] Strand Hanson Limited - Nominated & Financial Adviser James Spinney / James Bellman Canaccord Genuity - Joint Broker Henry Fitzgerald-O'Connor / James Asensio [phone] [phone] Stifel Nicolaus Europe Limited - Joint Broker Callum Stewart / Ashton Clanfield Tennyson Securities - Joint Broker Peter Krens / Pav Sanghera Camarco Owen Roberts / Billy Clegg / Hugo Liddy [phone] [phone] [phone] - 4 - acquisitions, optimization of existing oil and natural gas fields and the utilization of re-development strategies utilizing horizontal drilling and multi-staged fracture completion techniques.

The forward-looking statements contained in this document are based on certain key expectations and assumptions made by Southern, including those relating to: the business plan of Southern, including in respect of the Assets to be acquired pursuant to the Transaction; the receipt of all approvals and satisfaction of all conditions to the completion of the Transaction; the timing of and success of future drilling, development and completion activities; the geological characteristics of Southern's properties, including the Assets; the successful integration of the Assets into Southern's operations; prevailing commodity prices, price volatility, price differentials and the actual prices received for the Company's products; the availability and performance of drilling rigs, facilities, pipelines and other oilfield services; the timing of past operations and activities in the planned areas of focus; the drilling, completion and tie-in of wells being completed as planned; the performance of new and existing wells; the application of existing drilling and fracturing techniques; prevailing weather and break-up conditions; royalty regimes and exchange rates; the application of regulatory and licensing requirements; the continued availability of capital and skilled personnel; the ability to maintain or grow the banking facilities; the accuracy of Southern's geological interpretation of its drilling and land opportunities, including the ability of seismic activity to enhance such interpretation and Southern's ability to execute its plans and strategies. Although management considers these assumptions to be reasonable based on information currently available, undue reliance should not be placed on the forward-looking statements because Southern can give no assurances that they may prove to be correct. By their very nature, forward-looking statements are subject to certain risks and uncertainties (both general and specific) that could cause actual events or outcomes to differ materially from those anticipated or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to: incorrect assessments of the value of benefits to be obtained from exploration and development programs; changes in the financial landscape both domestically and abroad, including volatility in the stock market and financial system; wars (including Russia's war in Ukraine); risks associated with the oil and gas industry in general (e.g. operational risks in development, exploration and production and delays or changes in plans with respect to exploration or development projects or capital expenditures); unforeseen difficulties in integrating the Assets into Southern's operations; commodity prices; increased operating and capital costs due to inflationary pressures; the uncertainty of estimates and projections relating to production, cash generation, costs and expenses; health, safety, litigation and environmental risks; inflationary risks; access to capital and the COVID-19 pandemic. Due to the nature of the oil and natural gas industry, drilling plans and operational activities may be delayed or modified to react to market conditions, results of past operations, regulatory approvals or availability of services causing results to be delayed. Please refer to the annual information form and management's discussion and analysis for the year ended December 31, 2022, and other continuous disclosure documents for additional risk factors relating to Southern, which can be accessed either on Southern's website at www.southernenergycorp.com or under the Company's profile on www.sedar.com. - 7 - The forward-looking statements contained in this press release are made as of the date hereof and the Company does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, except as required by applicable law. The forward-looking statements contained herein are expressly qualified by this cautionary statement. This press release contains future-oriented financial information and financial outlook information (collectively, 'FOFI') about Southern's prospective results of operations, operating costs, cash flow and expectations regarding continued significant and predictable reserves growth, including pro forma the completion of the Transaction, all of which are subject to the same assumptions, risk factors, limitations, and qualifications as set forth in the above paragraphs. FOFI contained in this document was approved by management as of the date of this document and was provided for the purpose of providing further information about Southern's future business operations and the Transaction. Southern and its management believe that FOFI has been prepared on a reasonable basis, reflecting management's best estimates and judgments, and represent, to the best of management's knowledge and opinion, the Company's expected course of action. However, because this information is highly subjective, it should not be relied on as necessarily indicative of future results. Southern disclaims any intention or obligation to update or revise any FOFI contained in this document, whether as a result of new information, future events or otherwise, unless required pursuant to applicable law. Readers are cautioned that the FOFI contained in this document should not be used for purposes other than for which it is disclosed herein.

(C) 2023 Electronic News Publishing, source ENP Newswire