Southern Energy Corp (TSX-V:SOU, AIM:SOUC, OTC:MAXMD) has announced its intention to raise gross proceeds of at least US$5 million, or about C$6.9 million, in an equity financing at a price of C$0.26 per share.
The natural gas focused producer/explorer said the funds will be used to accelerate the completion of its four drilled and uncompleted (DUC) wells, drilled as part of the 1Q 2023 drilling campaign on its Gwinville acreage in Mississippi.
"After pausing our previous capital program at the end of Q1 2023 due to the drop in natural gas prices, we are excited to soon be back in the field at Gwinville to take advantage of the recent increase in Henry Hub natural gas pricing and bring these four uncompleted wells into production," Southern Energy CEO Ian Atkinson said in a statement.
"We have made a significant capital investment in the four DUC wells and will now be in a position to realize the material cash flow generation from these wells as we rapidly increase production in a short time scale," he added.
Southern Energy noted it expects the DUCs, once completed, to have initial production (IP30) rates of about 5.6 million cubic feet a day (MMcf/d) per well, with expected ultimate recovery per well of approximately 4.3 billion cubic feet (Bcf).
The company added that completion of the DUCs provides it with a significant platform for organic growth, with production expected to reach up to 4,700 barrels of oil equivalent per day (boepd) in 2024, an increase of 39% per share.
Southern Energy is focused on natural gas exploration and production, with operations primarily in the southeast Gulf States of Mississippi, Louisiana, and east Texas.
Contact Sean at sean@proactiveinvestors.com