WTI (July) $61.53 +33c, Brent (July) $64.74 +30c, Diff -$3.21 -3c
USNG (June) $3.33 +8c, UKNG (June) 88.53p +2.03p, TTF (June) €37.075 +€0.8

Oil price

Oil is down a touch today as the sight of OPEC+ rears its ugly head. Last week the suggestion of a 411/- b/d release next month was mooted, this week we should know the realite, Dates for the meeting are not clear, it could well be that a handful of key players will meet, maybe on Saturday and then the scheduled meeting on Sunday might be a fait accompli, very Opec….

And just to watch the Baker Hughes rig count, after all, it is meant to be drill baby drill. Last week, overall the count was down by 10 units at 566 whilst oil rigs were down 8 at 465.

Southern Energy Corp

Southern has announced its first quarter financial and operating results for the three months ended March 31, 2025. Selected financial and operational information is outlined below and should be read in conjunction with the Company’s unaudited consolidated financial statements and related management’s discussion and analysis (the “MD&A”) for the three months ended March 31, 2025, which are available on the Company’s website at www.southernenergycorp.com and have been filed under the Company’s profile on SEDAR+ at www.sedarplus.ca. 

All figures referred to in this news release are denominated in U.S. dollars, unless otherwise noted.

FIRST QUARTER 2025 HIGHLIGHTS

• Petroleum and natural gas sales of $5.1 million during Q1 2025, an increase of 7% from the same period in 2024, largely due to the increase in natural gas pricing
• Average realized natural gas and oil prices for Q1 2025 of $4.14/Mcf and $71.19/bbl, compared to $2.53/Mcf and $74.86/bbl in Q1 2024. Southern achieved an average premium of $0.49/Mcf (approximately 13%) above the NYMEX HH benchmark in Q1 2025
• Average production of 12,808 Mcfe/d (2,135 boe/d) (96% natural gas) during Q1 2025, a decrease of 29% from the same period in 2024
• Generated $0.9 million of Adjusted Funds Flow from Operations in Q1 2025 ($0.00 per share basic and diluted), excluding $0.3 million of one-time transaction costs
• Net loss of $3.9 million ($0.02 per share basic and diluted), compared to a net loss of $3.1 million in Q1 2024
• Entered into various amendments to the Company’s senior secured term loan, which included an extension to the pausing of monthly repayments of principal to January 31, 2025, and a reduction of the repayment required from the eighth amendment to $1.45 million as at January 31, 2025, which the Company paid. Amended the monthly repayment of the principal amount outstanding calculation beginning on February 28, 2025 and amended the asset coverage ratio down to 1.5x in 2025 as well as reducing the Tranche B capacity to $5.0 million 

SUBSEQUENT EVENTS

• On April 8, 2025, Southern closed an equity financing raising aggregate gross proceeds of $5.0 million (approximately £3.9 million, C$7.2 million) through the issuance of a total of 102,482,673 new units (see “Shareholders’ Equity – Share Capital” in the March 31, 2025 MD&A for full details)
• On April 8, 2025, Southern converted the remaining convertible debentures in the amount of $3.1 million into 62,759,286 new units and issued 1,627,170 new units for all accrued and unpaid interest (see “Liquidity and Capital Resources – Debenture Financing” in the March 31, 2025 MD&A for full details of the conversion)

Ian Atkinson, President and Chief Executive Officer of Southern, commented:
“Southern entered 2025 with renewed momentum, benefiting from both improved market conditions and the completion of our $5.0 million financing in April 2025. Natural gas prices showed early signs of recovery in the quarter, supported by strengthening demand fundamentals, from a colder-than-expected winter and tightening supply.

Robust natural gas pricing in Q1 2025 enabled Southern to achieve a $0.49/Mcf (13%) premium to the Henry Hub benchmark price. We remain encouraged by the macro outlook with strong demand forecasts, tied to lower storage levels compared to last year. Feed gas demand from U.S. LNG export facilities continues to rise, with the Golden Pass terminal and pipeline expected to begin receiving gas this year. Domestic consumption is also strengthening, led by growing power demand from data centers and widespread electrification of the economy. Combined with continued capital discipline across the upstream sector, we believe these dynamics will support a tighter U.S. natural gas balance throughout the year, which we aim to capitalise on.

With the recent financing complete and natural gas prices firming, we are excited to resume field operations, beginning with the first of three drilled but uncompleted wells in our Gwinville area. We have secured key services and will shortly commence operations on the 13-13 #2 Lower Selma Chalk horizontal well, with first production expected in June.

Southern remains committed to creating long-term shareholder value through disciplined capital deployment, operational efficiency, and strategic advantages of our asset base. With improving market tailwinds and a clear path to near-term production growth, we are optimistic about the opportunities that lie ahead in 2025″

Southern has started the year well, apart from the raise which will give them much needed flexibility, natural gas prices have been resilient, partly aided by demand during the cold weather but also with longer term, more structural potential. This comes from increased demand from LNG and its markets as well as the build up of data centres with their associated demand.

These pluses lead to an opportunity for an operational gear-up as predicted in the raise and leads to field operations being generated some of which are ready to start, well preparations are due to start imminently leading to production next month.

Investors who took part in the most recent raise must be thinking thoughts of excellent timing, Southern is a well managed company with a great portfolio of natural gas assets and, in my view, a very good long term market. 

Financial Highlights

Operations Update

The Company continues to progress its plans to complete its first Gwinville drilled and uncompleted (“DUC”) well and has finalized procuring key services. Field operations are scheduled to commence on the 13-13 #2 Lower Selma Chalk horizontal well in the next few weeks, and Southern expects first production from the well in June 2025. Timing for the second and third horizontal completions (one Lower Selma Chalk and one City Bank) will depend on the results of the first completion operation, but the Company expects to have all three wells completed before the end of the year.

The Company has also advised that it has recently elected to voluntarily shut-in approximately 400 boepd of production from the Mechanicsburg and Greens Creek Fields due to an ongoing transportation dispute with a third party pipeline operator. On April 29, 2025, Southern was pleased to receive confirmation that the pipelines subject to the dispute are regulated by the Federal Energy Regulatory Commission (“FERC”) and the third party submitted the initial filing to the regulator which includes setting maximum allowable transportation rates, subject to FERC review and approval. Southern will work closely with FERC staff to expedite the rate determination process and, in parallel, will continue to engage with the pipeline operator to pursue an agreement on an equitable fee structure that would allow the resumption of gas flows from these assets while the regulatory process continues.     

Outlook

Southern has taken decisive steps to strengthen its financial position, including the successful completion of the equity financing in April 2025, along with the conversion of the convertible debentures, and the restructuring of financial covenants with support from its lender, effective from Q1 2025. These strategic actions, combined with the fixed-price swap contract of 5,000 MMBtu/d at $3.40/MMBtu through December 2026, provide the necessary financial stability to execute the capital program with confidence.

Southern will continue to monitor NYMEX prices and the basis differential prices and is prepared to hedge

additional volumes in a tactical manner going forward.

We appreciate the continued support of our stakeholders and look forward to providing further updates on our operational progress as we work to drive long-term shareholder value.

Sound Energy

Sound Energy confirms that Graham Lyon, Chairman, purchased 2,000,000 ordinary shares at an aggregate price of GBP£0.007 per share in the Company. 

Following this transaction, which is detailed in the PDMR Notification Dealing Form below, Mr Lyon is interested in 7,012,258 ordinary shares in the capital of the Company, representing 0.3370% which is calculated on the total number of ordinary shares carrying voting rights of 2,080,622,679.

This is the second lump of shares bought by Sound Chairman Graham Lyon who must be feeling lucky, at the weekend his beloved Addicks gained promotion to the Championship…

Prospex Energy

Prospex has announced its audited Final Results for the year ended 31 December 2024 (the “year-end”) and Notice of the Annual General Meeting (“AGM”) on 25 June 2025.

Corporate Highlights

• At the end of 2024, the financial position of the Company had significantly strengthened with three revenue generating onshore natural gas investments situated in stable European countries – two in Spain and one in Italy.
• A fundraise in August 2024 of £4.2m gross via the issue of 69,955,393 new shares at 6p each, was applied in the same month to acquire 7.5% of HEYCO Energy Iberia S.L. (“HEI”). HEI has majority ownership in the producing Viura gas field in northern Spain, now the Company’s third producing asset.
• 14.473% of the net after-tax production income from the Viura gas field accrues to the Company’s investment until completion of the drilling programme and payback of its initial capital investment plus a 10% preferred return, after which its share reverts to 7.2365%.
• The results from the Viura-1B well, announced in December 2024, confirmed this investment decision. As this asset was acquired during the year, the fair value attributed to it is the actual amount invested at year-end, and it has not been revalued.
• During the year the Company expanded its activities into Poland, and created PXEN Tatra Sp. Z. o. o., a wholly owned subsidiary of Prospex, following its qualification to apply for onshore acreage hydrocarbon exploration licences in country.
• Exemplary safety performance by our operators, contractors and partners with no lost time incidents and no environmental issues or events.

Financial Highlights

• The Company recorded a loss for the year of £46,759 (2023: loss – £1,231,400), a 96% reduction on last year.
• The Company is reporting a 19.5% increase in shareholder equity (net asset value) at year-end of £4,013,106, to £24,590,154 (2023: £20,577,048).
• The revaluation of investments at fair value resulted in an increase of 4.59% to £16,310,197 (2023: £15,594,931) and an unrealised gain of £713,583 (2023: unrealised loss – £469,709).
• In March 2024, the Company made final settlement of all remaining interest-bearing debt and interest. No further debt finance was required or raised during the year.
• Consistent with the Company’s strategy, cash inflows from the Company’s investment portfolio (which are received as loan repayments until repayment of capital and interest) were reinvested for growth, with further investment in all of the Company’s assets during the year.
• At year-end, the Company held cash and cash equivalents of £1,185,386 (2023: £3,186).

Post period highlights

·    On 15th April 2025, the Company’s wholly subsidiary, PXOG Muirhill Limited, completed the acquisition of 100% of Tarba Energía S.L. (“Tarba”) through the purchase of the entire shareholding held by Warrego Energy Pty Ltd (“Warrego”) in Tarba (the “Warrego Shares”).
The Company now owns a 100% indirect working interest in El Romeral asset and the Tesorillo and Ruedalabola exploration permits.

·    The Company has invested a further £903,000 in the Viura asset during 2025.

·    Both of the above were completed using the Company’s existing capital resources.

·    The Company appointed Hannam & Partners (‘H&P’) as Joint Broker.

·    The management team has been strengthened with the appointment of Richard Jameson, as Chief Operating Officer.

Operational Highlights

Viura Field – Northern Spain

• The Viura acquisition significantly increased Prospex’s proven (2P) reserves by 6.5 Bcf (0.18 Bcm) net to Prospex.  Gross 2P remaining reserves at the Viura field is 90 Bcf (2.5 Bcm) and is expected to increase upon further evaluation of the newly drilled horizons.
• Successful drilling and discovery of the Viura-1B well which reached its revised total depth in October 2024, encountering high-quality gas-bearing formations, including a new discovery in the previously unexplored Utrillas-B reservoir.  Further testing is planned for 2026.
• Viura-1B was completed and tested with flow rates up to 500,000 scm/d (17.7 MMscfd), initiating production at 300,000 scm/d (10.6 MMscfd), significantly boosting Prospex’s total gas output in December 2024.
• Total natural gas produced from the Viura-1B well from start-up in December 2024 to the end of Q1-2025 was 30.2 MMscm = 1.1 Bcf (which is ≈ 4.4 MMscm = 154 MMscf net to Prospex).
• Post Period the Company announced the temporary cessation of production of the new Viura-1B well due to a leak in the completion tubing.  The Operator is sourcing the necessary equipment, including mobilising a suitable drilling rig in order to perform the workover by mid-June 2025.
• Drilling Phase 2 wells Viura-3A and Viura‑3B is now anticipated in 2026.

El Romeral – Southern Spain

• Ten year extension of the natural gas exploitation concessions at “El Romeral 1, 2 and 3” to July 2034.
• Significant progress was made by the operator on the permitting process of the five new wells to be drilled on the concessions and the Environmental Impact Assessment.  It is anticipated that the drilling permits may be issued in 2025.
• Potential connection and gas sales to Enagas Gas Grid, subject to the issue of the permits to drill the five new El Romeral gas wells.

Selva Field – Northern Italy

• Strong production and revenues with gross gas production for 2024 totalling 27.5 million scm, with 10.2 million scm net to Prospex.  Gross revenue reached €10.3 million, with €3.8 million net to Prospex at an average realised gas price of €0.37/scm.
• Average gross daily production increased steadily each quarter, ending the year at nearly 80,000 scm/day.  Quarterly net revenues to Prospex rose from €705,000 in Q1 to €1.25 million in Q4.
• Extension of long-term gas sales contract with BP Gas Marketing (“BPGM”), originally effective from April 2024, was extended by 12 months in October.  A further renewal is anticipated by October 2025.
• Drilling applications for four new wells in the Selva Malvezzi production concession were filed in Q3-2024 with the technical office of the Ministry of Environment and Energy Security.
• Lifting of the inherent hydrocarbon exploration and extraction restrictions on the Plan for the Sustainable Energy Transition of Eligible Areas (“PiTESAI”) has led to increased access for activities on the Selva Malvezzi Concession.
• Approval for strategic 3D Seismic Campaign was obtained in January 2025, paving the way for four new planned wells.

Commenting on the results, Mark Routh, Prospex’s CEO, said:
“2024 was a year in which we made significant progress towards the development of our stated strategy – to become a mid-tier independent European energy producing group. We are pleased to report a significant increase in net asset value by more than £4 million, underpinned by our growing portfolio of high-quality energy investments. Ending the year debt-free, with more than £1.1 million in cash and financially self-sustaining on a business-as-usual basis, marks a key milestone for the business, enabling us to reinvest organically and strengthen our foundation for future growth from a far stronger balance sheet.

“The subsequent successful acquisition of Tarba Energía, and the increase of investment in the Viura asset, both completed with existing cash reserves, highlight our disciplined approach to portfolio development, supported by the continued confidence of our investors. Looking ahead, we remain focused on both organic growth from our existing assets and the pursuit of new opportunities that meet our rigorous investment standards and look forward to a successful 2025.”

Nothing new here except a useful analysis of where Prospex is now, I like the markets it’s operating in, bar the delays but the company is set fair. 

Original article   l   KeyFacts Energy Industry Directory: Malcy's Blog