Southern Energy Corp (TSX-V:SOU, AIM:SOUC, OTC:MAXMD) has announced the spudding of its three Selma Chalk horizontal wells in Gwinville, in Mississippi, targeting natural gas.
The Calgary, Alberta-based natural gas exploration and production company said the three wells will be drilled from the same surface pad site and batch drilled for operational and capital efficiencies. If everything goes according to plan, first production from the wells is expected in April 2022, said the company.
In a statement, Southern Energy CEO Ian Atkinson said: "We are delighted to report that the team has commenced operations on the Gwinville Selma Chalk horizontal well program. These wells will have a short payback and are strategically located in proximity to the Henry Hub terminal which attracts premium regional gas pricing.”
“The Gwinville program is expected to have an immediate positive impact for the company and provide additional near-term cash flow to the business during a period of strong commodity prices, and we look forward to updating shareholders as the program progresses," he added.
READ: Southern Energy confirms second-quarter production growth
Southern Energy also said it has entered into a first amendment of its US$8.5 million senior secured term loan extending the US$3 million Tranche B maturity to April 30, 2022, to further support the Gwinville program. The company has US$2.5 million available under the Tranche B portion of the credit facility.
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.
Contact the author Uttara Choudhury at uttara@proactiveinvestors.com
Follow her on Twitter: @UttaraProactive
