Southern Energy Corp’s petroleum and natural gas sales jump 176% as group plans to ramp up production
- Southern Energy Corp saw petroleum and natural gas sales surge in Q2
- Group said it had also had success with its first three wells at Gwinville
Southern Energy saw $3.6million value of adjusted funds flow from operations within the second quarter, representing a 490 per cent increase against a yr ago.
The Toronto and London-listed natural gas exploration and production company reported net earnings of $2.8million for the period, in comparison with net earnings of $3.1million at the identical point last yr.
The corporate made petroleum and natural gas sales totalling $10.3million within the second quarter, a rise of 176 per cent from the identical period in 2021.
On the up: Southern Energy Corp saw petroleum and natural gas sales rise 176% within the second quarter
In January, the group announced the spudding, or the the means of starting to drill, of its three Selma Chalk horizontal wells in Gwinville in Mississippi.
Today, the corporate said: ‘Southern was successful in safely and efficiently executing the three well appraisal program in the primary half of 2022, marking the primary horizontal drilling activity within the Gwinville Field in roughly 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 is able to allow the Company to begin a long-term drilling program starting in Q4 2022 within 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 within the last yr.
The group said in its quarterly update: ‘Natural gas pricing has remained strong within 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 roughly $5 per MMBtu premium to NYMEX.
‘In recent weeks, this region has had the best priced natural gas market within 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 predicted to payout in far lower than 12 months.
‘The Company continues to observe these premium prices and is ready to hedge additional basis exposure at these elevated basis premiums.’
Ian Atkinson, president and chief executive of Southern, said: ‘We’re pleased with the success of our recent equity financing, which allows us to speed up the organic growth strategy portion of our goal to achieve 25,000 boe/d.
‘The success of those first three wells at Gwinville have already increased our corporate production by over 100 per cent.
‘We’re truly excited by our ability to start a long-term development drilling program to unlock shareholder value on account of the numerous reserves, production and cashflow growth in Gwinville and our other assets.
‘Cashflow generated from this development will support our fundamental strategy of each organic and inorganic growth of natural gas weighted assets within the Gulf Coast area of the USA.’
The Calgary, Alberta-based company’s primary assets are situated in Southern Mississippi, within the Mississippi Interior Salt Basin along with minor properties in North Eastern Mississippi, within the Black Warrior Basin; in addition to in Alabama