Mr. Ian Atkinson reports

SOUTHERN ENERGY CORP. ANNOUNCES SPUDDING OF COTTON VALLEY TEST WELL AT WILLIAMSBURG AND APPOINTMENT OF MARKET MAKER

Further to the announcement of the joint venture wellbore participation agreement with a strategic partner on May 26, 2026, Southern Energy Corp. spudded the Terrible Creek 21-2 No. 2 Cotton Valley test well in the Williamsburg field on Aug. 11, 2026. This is the first of two farmout commitment wells planned for drilling this year, whereby Southern will pay roughly 50 per cent of the gross drill and completion costs of $3.9-million (U.S.) per well, corresponding to a 50-per-cent working interest. The company expects the well to be drilled to a planned total depth of approximately 19,000 feet. Completion and testing operations are expected to commence after the drilling rig has been moved off site.

Ian Atkinson, president and chief executive officer of Southern, commented: "We are thrilled to break ground on the Cotton Valley test well at Williamsburg, marking an exciting next step in unlocking value across our core assets. Executing this farmout allows us to efficiently evaluate high-impact prospective targets while maintaining disciplined capital allocation. Given the recent success of competitor drilling offsetting our acreage, we expect success at Williamsburg to initiate growth in the oil and liquids weighting at Southern."

Appointment of automated market-maker

Southern has engaged ICP Securities Inc. to provide automated market-making services, including the use of its proprietary algorithm, ICP Premium in compliance with the policies and guidelines of the TSX Venture Exchange and other applicable laws.

ICP will be paid a monthly fee of $7,500, plus applicable taxes. The agreement between the company and ICP is effective from Aug. 10, 2026, and will continue for four months and shall be automatically renewed for subsequent one-month terms unless either party provides at least 30 days of written notice prior to the end of the initial term or an additional term, as applicable. There are no performance factors contained in the agreement and no stock options or other compensation in connection with the engagement. ICP and its clients may acquire an interest in the securities of the company in the future.

ICP is an arm's-length party to the company. ICP's market-making activity will be primarily to correct temporary imbalances in the supply and demand of the company's shares. ICP will be responsible for the costs it incurs in buying and selling the company's shares, and no third party will be providing funds or securities for the market-making activities.

Ian Atkinson, president and chief executive officer of Southern, further commented: "As Southern continues to advance its business plan to grow production and cash flow and to expand its shareholder base, we believe it is important that our market presence reflects the underlying progress being made by the company. We have engaged ICP to take a pro-active step to support trading for shareholders, improve quote quality, and help mitigate temporary imbalances in the supply and demand of our shares. This is part of our broader commitment to improving transparency, liquidity and long-term value creation for Southern shareholders."

Qualified person statement

Gary McMurren, chief operating officer, who has over 25 years of relevant experience in the oil industry, has approved the technical information contained in this announcement. Mr. McMurren is registered as a professional engineer with the Association of Professional Engineers and Geoscientists of Alberta and received a bachelor of science in chemical engineering (with distinction) from the University of Alberta.

About Southern Energy Corp.

Southern Energy is a natural gas exploration and production company characterized by a stable, low-decline production base, a significant low-risk drilling inventory and strategic access to premium commodity pricing in North America. Southern has a primary focus on acquiring and developing conventional natural gas and light oil resources in the southeastern Gulf states of Mississippi, Louisiana and eastern Texas. The company's management team has a long and successful history working together and has created shareholder value through accretive acquisitions, optimization of existing oil and natural gas fields and redevelopment strategies, including horizontal drilling and multistaged fracture completion techniques.

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