Southern Energy Corp. · TSXV:SOU
Southern Energy — Investor Presentation (August 2021)
25 slides from Southern Energy's investor presentation, August 2021
Slide 1: Positioned for Growth
Positioned for Growth August 2021 TSXV : SOU
Slide 2: Disclaimers
Disclaimers The information contained herein has been provided solely for information purposes and does not purport to be comprehensive or contain all the information that may be required by recipients to evaluate Southern Energy Corp. ("Southern" or the "Company"). This Presentation and the informa
Slide 3: Disclaimers
Disclaimers All reserve references in this Presentation are "Company share reserves". Company share reserves are the applicable company's total working interest reserves before the deduction of any royalties and including any royalty interests payable to the company. It should not be assumed that th
Slide 4: Investment Highlights and Value Proposition
Investment Highlights and Value Proposition U.S. Gulf Coast focused energy company with a goal to create shareholder value by: Consolidating, optimizing and developing high quality conventional assets in under-exploited basins in U.S. Gulf Coast • Long term shareholder equity appreciation through lo
Slide 5: Table of Contents
Table of Contents I. Executive Summary II. Asset Overview & Acquisition Strategy III. Appendix a) Environment, Social & Governance b) Board of Directors c) Capital Structure Overview d) Organic Growth Summary e) Hedging Summary TSXV: SOU, AIM: SOUC www.southernenergycorp.com 4
Slide 6: I. Executive Summary
I. Executive Summary TSXV: SOU, AIM: SOUC www.southernenergycorp.com 5
Slide 7: Positioned for Growth
Positioned for Growth Southern Energy is an established, cash generative, conventional gas producer in the southeast United States Gas Focused Growth Strategy Southern Energy Assets – Global Gas Export Perspective • Management has extensive operating experience in the Southeast United States • Posit
Slide 8: Leadership Team
Leadership Team Experienced and successful management team with a history of creating shareholder value together Strong technical expertise combined with a modern approach to data and workflow creates proven early mover advantage Ian Atkinson Calvin Yau Gary McMurren Erin Buschert Jim McFadyen Chris
Slide 9: Southern Energy Business Plan – Focused on Value Creation
Southern Energy Business Plan – Focused on Value Creation “Drill High” “Buy Low” Low-Risk Organic Development Accretive PDP Acquisitions Drilling & Reserves Growth ✓ Disciplined consolidation strategy ✓ Large scale, under-developed assets Strong Base & Asset Optimization utilizing management’s propr
Slide 10: Investment Thesis
Investment Thesis Why Invest in Southern Energy? Experienced Management Aligned with Shareholders • Highly experienced management team in acquiring and developing assets TEAM HAS SPENT 7 YEARS OPERATING IN THE U.S. GULF COAST AREA • Extensive operations experience in southeastern U.S. core area • Ma
Slide 11: The U.S. Gulf Coast – Happy Hunting Grounds
The U.S. Gulf Coast – Happy Hunting Grounds Excellent market liquidity compared to other regions (2) The U.S. Gulf Coast is perfect for 250 # Deals 215 pursuing growth via M&A: 200 • 3,894 E&P companies, of which > 90% are private (1) 150 131 118 • Excellent market liquidity with 118 100 86 transact
Slide 12: Tightening of the U.S. Gas Supply / Demand Balance
Tightening of the U.S. Gas Supply / Demand Balance Positioning Southern for the Future of Natural Gas Southern Proximity to LNG Export Markets The U.S. Gas Depletion Story: 2020 and Beyond • Unprecedented production of 95+ Bcf/d with annual decline rate of > 27% • 2016 – 2019 U.S. shale gas growth l
Slide 13: II. Asset Overview & Acquisition Strategy
II. Asset Overview & Acquisition Strategy TSXV: SOU, AIM: SOUC www.southernenergycorp.com 12
Slide 14: Mississippi Oil & Gas History – Home of Core Assets
Mississippi Oil & Gas History – Home of Core Assets Mississippi Oil & Gas Highlights > 2.0 > 10 > 34,000 Billion bbl cumulative oil Tcf cumulative gas Wells drilled to date • Significant hydrocarbon recovery – Superior production on a per well basis than Texas or Louisiana • First commercial oil wel
Slide 15: Core Southern Energy Asset Base
Core Southern Energy Asset Base > 31,000 ~ 2,150 $38.9 < $5.00 Acres (~ 93% HBP (1)) boe/d (2) $MM 1P PV10 (3) /boe Lifting/Processing Cost Mississippi Alabama Mechanicsburg Magee • Liquids rich (> 25 bbl/MMcf oil & NGL) 425 35 • Field production > 10 MMbbl • Field covered by 53 mi2 3D boe/d boe/d •
Slide 16: Asset Optimization Results
Asset Optimization Results Southern Energy Assets - Historical Operating Trend $800,000 $12.00 • Purchasing under-exploited assets within our operating area of expertise Quarterly OPEX Per Unit OPEX allows us to implement proven $700,000 strategies to maximize value Average Monthly OPEX Prior > 40%
Slide 17: Seven Years of Operating History Has Formed Strategic Advantage
Seven Years of Operating History Has Formed Strategic Advantage Strategic Advantage Consolidation & Development Focus Area • Self-generated opportunities utilizing proprietary database • Digital workflow has proven management successful in previous companies • Allows for a significant amount of work
Slide 18: III. Appendix
III. Appendix a) Environment, Social & Governance b) Board of Directors c) Capital Structure Overview d) Organic Growth Summary e) Hedging Summary TSXV: SOU, AIM: SOUC www.southernenergycorp.com 17
Slide 19: Modern Energy Company - Environment, Social & Governance
Modern Energy Company - Environment, Social & Governance Southern’s near term mission is to support the U.S. transition to cleaner sources of electricity generation by delivering low cost, conventional natural gas Central Mississippi Operations Team Core Values at Southern – Not Buzz Words Environme
Slide 20: Board of Directors
Board of Directors Experienced and talented leadership to guide the Execution of Southern Energy’s Business Plan Board of Directors Special Advisors Ian Atkinson, P. Eng., ICD.D Bruce Beynon, P. Geol. (Chairman) Paul Baay Former founder and EVP of Athabasca Oil Former EVP, Exploration and Corporate
Slide 21: Scalable Large Resource Assets – Gwinville Example
Scalable Large Resource Assets – Gwinville Example Significant Underdeveloped Gas Resource Mississippi’s Largest Gas Field – Jefferson Davis Co., MS • 1+ Tcf OGIP in Selma Chalk, current recovery ~ 15% Multi Tcf Gas in Place Bcf MMbbl • Multi-zone production of 1.5 Tcf, 12 MMbbl, current decline < 1
Slide 22: Gwinville - Low Risk, Multi-Zone Gas Resource Development
Gwinville - Low Risk, Multi-Zone Gas Resource Development Similar Pool Characteristics • The Baxterville field has undergone a successful HZ conversion and is a direct analog to the Gwinville Field ‒ Gen-2 horizontal wells in the middle of the pool producing > 7 MMcf/d IP30 ‒ Southern plans to incre
Slide 23: Significant Gas / Oil Potential in Regional Cotton Valley Fairway
Significant Gas / Oil Potential in Regional Cotton Valley Fairway Defined plan to build Cotton Valley assets in a regional fairway using Southern’s proprietary database Low Risk, Prolific Hydrocarbon Trend • Trend is less developed with drilling as the play moves east from Texas • Similar ‘macro’ tr
Slide 24: Low Risk Mechanicsburg Cotton Valley PUD Locations
Low Risk Mechanicsburg Cotton Valley PUD Locations Significant Underdeveloped Gas Resource Lower Cotton Valley Pay (ft) • Initial development utilized inefficient limited-entry completion design leaving optimization and infill potential • > 15 bbl/MMcf free condensate plus > 8 bbl/MMcf of NGL recove
Slide 25: Hedging Summary
Hedging Summary Hedging Position: • At July 22, 2021: Natural Gas: Deal Type Term Start Date End Date Volume (MMBtu/d) Index Strike Swap Option Cal21 01-Jan-21 31-Dec-21 1,500 NYMEX HH $ 2.575 Swap Option Cal21 01-Jan-21 31-Dec-21 3,600 NYMEX HH $ 2.402 Swap Option Bal21 01-Aug-21 31-Oct-21 1,000 NY
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