SOUTHERN ENERGY : ANNOUNCES INTENTION TO SEEK ADMISSION TO AIM

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SOUTHERN ENERGY CORP. ANNOUNCES INTENTION TO SEEK

ADMISSION TO AIM

Calgary, Alberta - 27 July 2021 - Southern Energy Corp. ("Southern Energy", the "Company" or, together with its subsidiaries, the "Group"), a North American gas-weightedproducer focused on growth, is delighted to confirm its intention to seek a dual listing of its common shares (the "Common Shares") on the London Stock Exchange's AIM market ("AIM") in addition to its existing listing on the TSX Venture Exchange (TSXV: SOU) ("TSXV").

Admission of the Common Shares to trading on AIM ("Admission") is expected to occur at 8:00 a.m. on 10 August 2021 under the TIDM 'SOUC'.

Strand Hanson Limited is acting as Nominated and Financial Adviser to the Company, H&P Advisory Limited ("Hannam & Partners") is acting as Financial Adviser and Joint Broker to the Company, and, from Admission, Canaccord Genuity Limited will act as a Joint Broker to the Company.

In line with the requirements of the AIM Rules for Companies to have an independent Competent Person's Report ("CPR") prepared within six months of any admission document, the Company has today uploaded a CPR prepared by Netherland, Sewell & Associates, Inc. ("NSAI") dated 25 June 2021 to its Company profile on SEDAR at www.sedar.com. Resource volume estimates contained within this announcement are derived from the CPR.

HIGHLIGHTS:

Solid foundations to facilitate growth

• Multi-facetedgrowth focused company, backed by conventional, profitable, onshore gas-weighted production portfolio located in Mississippi and Alabama
• • Aggregate Gross production attributable to the Group's working interests of approximately 2,150 boe/d, predominantly comprised of 11.9 MMscf/d of gas production (Q1 2021 average) from conventional, low-decline,long-life reserves in fields with abundant infrastructure, low operating costs and premium commodity pricing
  • Existing asset base includes independently assessed net attributable 2P gas reserves of 49.4 Bcf, which the Board believes can be developed to add further production with minimal capital requirements
  • Existing and potential onshore Gulf Coast growth opportunities produce at a predictable and low-decline rate

• Southern Energy's growth strategy capitalises on unique market dynamics in the Gulf Coast which offer consolidation opportunities in addition to the low-cost development of its existing portfolio of over 30,000 net acres of mineral rights
• • Organic and inorganic growth opportunities will target conventional low decline, long life, multi-zone assets adding potentially 1,500 to 15,000 boe/d per well or transaction
  • Strategy in place to grow the Company to produce over 25,000 boe/d
• Two acquisitions already completed in focus area, with a successful yet rigorous focus on production optimisation and reducing ongoing operating costs
• • Southern Energy and its management team have successfully lowered per unit operating costs by more than 40 per cent over the preceding four years, by employing proven strategies to maximise value in under-exploited assets
  • The Group sees similar opportunities on other assets in the region which are currently being evaluated
• Intention to capitalise on significant operational experience in the region
• • The Group holds a significant regional geological database developed over seven years which it has used to build the Group's existing portfolio of stable cash flow generating assets

Aligned, experienced and operationally focused management team

• President and Chief Executive Officer Mr Ian Atkinson has over 25 years of experience in the oil and gas sector across technical, executive and board of director roles. Mr Atkinson was the founder, President and Chief Executive Officer of Gulf Pine Energy Partners, LP from 2014 until its acquisition by Southern Energy in December 2018, prior to which he was a co-founder and senior vice president of Athabasca Oil Corporation.
• On Admission, the Board will consist of one Executive Director and seven Non- Executive Directors and will be run by Mr Bruce Beynon as Non-Executive Chairman.
• • Bruce Beynon is a professional geologist with over 30 years of oil and gas industry experience
  • Multiple board and directorship roles over a distinguished career in the sector
• Board further supported by Paul Baay, Chief Executive Officer of Touchstone Exploration and Jay Haber, a US based independent oil and gas M&A consultant, both as special advisers
• Board and management have significant specialised operational skill and knowledge in the oil and gas industry
• • Existing team have the capability to compile, interpret and evaluate technical data, drill and complete wells, design and operate production facilities and a proficiency in the wider activities required to explore for and produce oil and natural gas

• The Board and management team are currently invested in approximately 16.9 per cent of the Common Shares, aligning management to growing shareholder value.

Premier jurisdiction from which to grow

• Existing business is located in premier onshore US real estate, nearby to Henry Hub terminal, which commands premium natural gas pricing
• • The Board believe that the Group can further benefit from its exposure to the expanding Gulf Coast LNG export market and the current tightening in the US gas supply/demand balance as shale gas shrinks
• Significant infrastructure already in place, given the long history of hydrocarbon production in both Mississippi and Alabama
• Low plug and abandonment liability requirements on existing assets

Ian Atkinson, President of Southern Energy, commented:

"We are delighted to be listing on AIM, ahead of an unparalleled period of growth potential and accompanying news flow for Southern Energy. With both organic and inorganic opportunities to create shareholder value, an aligned board and unique operational capability, we see now as a key time for our Company.

"Through the dual listing process, we intend to broaden our shareholder base and public profile as well as provide the Company with the platform to take advantage of the strong market dynamics and our established position in the Gulf Coast.

"We are pleased to welcome Joe Nally to the Board from Admission, who brings over 40 years' experience in London's capital markets to our team. We believe the significant experience of our Board and senior management team, supplemented by special advisers Jay Haber, who brings specific knowledge and experience in U.S Gulf Coast M&A markets, and Paul Baay, who brings successful dual listing and strategy execution credentials, sets our Company up very well for the future.

"This is an exciting period for the Company and we look forward to engaging with new shareholders in due course."

Enquiries:

Southern Energy Corp	c/o Camarco
Ian Atkinson / Calvin Yau	[phone]
Strand Hanson Limited - Nominated & Financial Adviser	[phone]
James Spinney / James Bellman
Hannam & Partners - Joint Broker	[phone]
Sam Merlin / Ernest Bell
Canaccord Genuity - Joint Broker	[phone]
Henry Fitzgerald-O'Connor / James Asensio

Camarco
James Crothers, Billy Clegg, Daniel Sherwen	[phone]

Further Information on the Company

Introduction

Southern Energy is an established oil and gas producer headquartered and incorporated in Alberta, Canada, with oil and gas interests in properties located in the south-eastern United States, primarily in Mississippi.

The Group has controlling operated interests in properties covering approximately 30,000 net acres in the Mississippi Interior Salt Basin, which include its two principal properties Mechanicsburg and Mount Olive East, and approximately 1,200 net acres in the Black Warrior Basin. The majority of the Group's leases (97 per cent.) contain producing wells and are "held by production", requiring no additional drilling or operations for the Group to maintain its existing interest.

The Group currently has a working interest in 239 producing wells. Aggregate Gross production attributable to the Group's working interests is approximately 2,150 boe/d, predominantly comprised of 11.9 MMscf/d of gas production (Q1 2021 average) from conventional, low-decline,long-life reserves in fields with abundant infrastructure, low operating costs and premium commodity pricing. The majority of the Group's producing assets have a predictable and consistent production profile and have been on production for more than 10 years.

As at 1 April 2021, the Group's total Company Gross Proved (1P) gas reserves were 55.9 Bcf, with Net attributable of 44.2 Bcf. Proved plus Probable (2P) Company Gross gas reserves were 62.4 Bcf, with Net attributable of 49.4 Bcf. The corresponding liquids reserves (comprising oil, condensate and NGLs) were 1,063 Mbbl Gross, 851 Mbbl Net 1P, with 2P reserves of 1,236 Mbbl Gross, 988 Mbbl Net.

In addition to increasing production through acquisitions of further properties, the Group's portfolio also provides the opportunity to increase production through infill drilling on its existing properties.

The Company's Common Shares are listed on the "TSXV" under the trading symbol "SOU".

Highlights and Strategy

Southern Energy is focused on building value through the consolidation and development of gas and oil assets in south-eastern United States, where there are a series of mature basins with proven low-cost producing assets, with a current focus on the Mississippi Interior Salt Basin. The Group intends to increase its production base by over 25,000 boe/d over the next two years through continued asset consolidation and development, targeting conventional assets with low decline, long life, multi-zone organic growth potential ranging from 1,500 to 15,000 boe/d, which the Group is currently evaluating.

The Group aims to build a high-margin asset base of sufficient scale with significant low-risk drilling inventory that continues to generate free cash flow to deliver shareholder distributions over the medium term to long term. To accomplish this objective, the Board seeks to balance two primary growth drivers: (a) adding accretive Proved developed producing acquisitions; and (b) executing low-risk development drilling to achieve organic reserves growth.

During periods where the Board believes commodity prices are depressed, the Group employs a disciplined acquisition strategy to add low-decline assets that are synergistic with existing

operations at attractive metrics to its portfolio, while paying only for Proved developed producing reserves. During periods of relatively stronger commodity pricing, the Board intends to focus on the infill development of the Group's existing large-scale drilling inventory within assets exhibiting historically low recovery factors.

As part of its acquisition growth strategy, the Group evaluates oil and gas properties throughout the south-eastern United States that will result in meaningful reserve and production additions. The Group seeks to add high-quality,long-life reservoirs in proven growth areas that offer existing infrastructure, opportunities for operating cost reductions, low- cost oil and gas drilling opportunities and operational control.

The Group has made two acquisitions in its focus area over the past four years and has rigorously optimized production and operating costs over that time. While spending minimal maintenance capital on the assets, Southern Energy has lowered per unit operating costs by more than 40 per cent. over the past four years by employing proven strategies to maximize value in under-exploited assets. The Group sees similar opportunities on the larger consolidation opportunities that it is evaluating and is excited to implement these cost control strategies on a larger scale.

Southern Energy leverages the specialised skill and knowledge of its Board and management team to compile, interpret and evaluate technical data, drill and complete wells, design and operate production facilities and numerous additional activities required to explore for and produce oil and natural gas.

The south-eastern United States is strategically located near Henry Hub, which commands premium natural gas pricing. The Group currently sells the majority of its produced natural gas and oil at the wellhead pursuant to variable price contracts, where it receives Henry Hub pricing (less minor proximity adjustments) for its natural gas and Louisiana Light Sweet pricing (less adjustments for proximity and quality) for its oil. The Board believes that the Group will benefit from its exposure to the expanding Gulf Coast LNG export market and the current tightening in the US gas supply/demand balance as shale gas growth has become largely unprofitable, LNG exports increase and an increasing market share for clean gas-fired power generation in the United States.

The Group's ESG objectives are supported by a low plug and abandonment liability on its existing assets and its focus on low emission natural gas assets in the Gulf Coast.

Key Investment Proposition

The key objective of the Group is to deliver long-term material value for its stakeholders through the growth and development of its oil and gas production portfolio. The Directors and the Proposed Director believe that an investment in the Company should be attractive to prospective investors for the following reasons:

• The Group intends to capitalise on its significant regional geologic database developed over the preceding seven years to build on the Group's existing strong base of long life, low decline (<12 per cent.) assets, which provide low risk and stable cash flows;
• The Board and management team have significant combined experience in the oil and gas industry and within the region in which they are operating, and are currently interested in approximately 16.7 per cent. of the Common Shares;
• With minimal capital development on its assets, the Group has a track record of optimising the performance of its assets through rigorous operating cost savings and production, marketing and lift optimisations effected in an environmentally conscious and safety driven manner;
• The Group intends to make additional accretive acquisitions of Proved Developed Producing conventional assets with exposure to premium offtake pricing, following a