Southern Energy Corp see petroleum and gas sales rise by 176%

Southern Energy saw $3.6million worth of adjusted funds flow from operations in the second quarter, representing a 490 per cent increase against a year ago. 

The Toronto and London-listed natural gas exploration and production company reported net earnings of $2.8million for the period, compared to net earnings of $3.1million at the same point last year. 

The company made petroleum and natural gas sales totalling $10.3million in the second quarter, an increase of 176 per cent from the same period in 2021.

On the up: Southern Energy Corp saw petroleum and natural gas sales rise 176% in the second quarter

In January, the group announced the spudding, or the the process of beginning to drill, of its three Selma Chalk horizontal wells in Gwinville in Mississippi. 

Today, the company said: ‘Southern was successful in safely and efficiently executing the three well appraisal program in the first half of 2022, marking the first horizontal drilling activity in the Gwinville Field in approximately 12 years.’

It added: ‘Based on the success of the initial three well appraisal program at Gwinville, Southern’s Board of Directors has approved an accelerated capital budget of US$34.4million for the balance of 2022, which will allow the Company to commence a long-term drilling program beginning in Q4 2022 in the Gwinville field.’

Southern Energy shares were up 3.57 per cent or 2.16p to 62.66p today, having risen over 123 per cent in the last year. 

The group said in its quarterly update: ‘Natural gas pricing has remained strong in the Southeastern U.S. spot and forward basis markets highlighted by the recent August 2022 settlement price where a portion of Southern’s natural gas is selling for approximately $5 per MMBtu premium to NYMEX. 

‘In recent weeks, this region has had the highest priced natural gas market in the U.S. and futures markets indicate premiums to NYMEX extending out to 2026. At current pricing the Company’s development drilling at Gwinville is expected to payout in far less than 12 months. 

‘The Company continues to monitor these premium prices and is prepared to hedge additional basis exposure at these elevated basis premiums.’

Ian Atkinson, president and chief executive of Southern, said: ‘We are pleased with the success of our recent equity financing, which allows us to accelerate the organic growth strategy portion of our goal to reach 25,000 boe/d. 

‘The success of these first three wells at Gwinville have already increased our corporate production by over 100 per cent. 

‘We are truly excited by our ability to begin a long-term development drilling program to unlock shareholder value due to the significant reserves, production and cashflow growth in Gwinville and our other assets. 

‘Cashflow generated from this development 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.’

The Calgary, Alberta-based company’s primary assets are located in Southern Mississippi, in the Mississippi Interior Salt Basin in addition to minor properties in North Eastern Mississippi, in the Black Warrior Basin; as well as in Alabama 

This post first appeared on Dailymail.co.uk