WTI (Dec) $59.91 -18c, Brent (Jan) $64.20 -19c, Diff -$4.29 -1c
USNG (Dec) $4.36 -21c, UKNG (Dec) 83.28p +0.47p, TTF (Dec) €31.7 +€0.07

Oil price

Oil is unchanged today and remains quiet for all the reasons already outlined this week. The dollar remains strong as ahead of the unemployment data on Thursday worries continue that rates won’t fall at the December Fed meeting. 

Southern Energy Corp

Southern has announced its third-quarter financial and operating results for the three and nine months ended September 30, 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 for the three and nine months ended September 30, 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.

THIRD QUARTER 2025 HIGHLIGHTS

• Petroleum and natural gas sales of $4.3 million during Q3 2025, an increase of 25% from the same period in 2024, largely due to the 50% increase in Q3 2025 natural gas pricing over Q3 2024
• Average production of 12,457 Mcfe/d (2,076 boe/d) (97% natural gas) during Q3 2025, a decrease of 11% from the same period in 2024 and an increase of 10% from Q2 2025
• Average realised natural gas and oil prices for Q3 2025 of $3.59/Mcf and $63.53/bbl, compared to $2.40/Mcf and $73.78/bbl in Q3 2024. Southern achieved an average premium of $0.52/Mcf (approximately 17%) above the NYMEX HH benchmark in Q3 2025
• Generated $1.0 million of Adjusted Funds Flow from Operations in Q3 2025 ($0.00 per share basic and diluted)
• Net earnings of $0.5 million ($0.00 per share basic and diluted) in Q3 2025, compared to a net loss of $2.1 million in Q3 2024

SUBSEQUENT EVENTS

●    The Company successfully completed an oil well in the Magee Field at the end of September 2025. The well produced approximately 3,000 bbl of oil in the month of October and is currently producing at steady rates ~ 85 bbl/d of oil. The final costs for the completion were $85,000, which resulted in a payout of less than three weeks on the project. 

Ian Atkinson, President and Chief Executive Officer of Southern, commented:

“Southern delivered another strong quarter, underpinned by a successful oil recompletion in the Magee Field and the continued strong performance of the GH LSC 13-13 #2 well. These achievements have enhanced our cash flow and reaffirmed the depth and quality of our development inventory. With realized natural gas pricing averaging a 17% premium to Henry Hub during the quarter, our strategic positioning and disciplined execution continue to drive meaningful value for shareholders.”

Southern has had a ‘strong’ quarter with help both from natural gas prices, the oil recompletion at the Magee field and the continued strong performance of the GH LSC 13-13 #2 well. CEO Ian Atkinson is rightly confident about the depth and quality of the development inventory and readers know that I rate this management team very highly indeed. 

The higher natural gas price has not only boosted cash flow but showed the potential upside in the portfolio and its value to shareholders going forward. The shares are 32% off the lows and I think that this looks very attractive for those investors who believe that natural gas has a guaranteed seat at the energy transition table. 

Financial Highlights

Operations Update 

In late June 2025, Southern brought online the first of its three remaining drilled but uncompleted (“DUC”) horizontal wells from the Q1 2023 drilling program, and its first Lower Selma Chalk (“LSC”) lateral – the GH LSC 13-13 #2 wellbore. Over the first 30 days of production the well averaged natural gas rates of 3.6 MMcfe/d (99% gas), which is an increase of over 100% compared to the average of the original LSC horizontal wells in Gwinville that were drilled and completed by the previous operators. The well has continued to flow throughout the quarter as per expectations, achieving an IP90 rate of 2.9 MMcfe/d. 

Southern implemented stimulation design changes that improved the predictability and speed of the fracture operations, and most importantly, reduced the Company’s overall expected completion cost for future horizontal wells down to ~ $1.8 million per well.  Incorporating planned design changes on the drilling side, Southern now expects the full drill, complete, equip and tie-in cost for future Gwinville horizontal wells (5,000′ lateral) to be ~ $4.0 million, which is 20% lower than the current capital estimates in the Company’s third-party reserve report.  

Southern will continue to monitor regional natural gas pricing over the upcoming months before making a decision on the completion timing of the remaining two DUC wells. 

Southern continues to work with Federal Energy Regulatory Commission (“FERC”) staff to resolve the ongoing transportation dispute that resulted in the shut-in of approximately 400 boe/d of production from the Mechanicsburg and Greens Creek fields. In September 2025, FERC requested certain data from the pipeline operator. Based on prescribed FERC resolution timelines and past rate determination processes, the Company now expects this issue to be resolved sometime in Q4 2025, at which point these production volumes will come back on-line. The ongoing US government shutdown has contributed to further unforeseen delays in the process.      

Outlook

With the recent operational success of the GH LSC 13-13 #2 well completion and the Magee oil recompletion, Southern plans to leverage the resulting increase in cash flow to further strengthen its balance sheet and advance additional oil focused projects and the two remaining DUCs at Gwinville.

The Company continues to benefit from a fixed-price natural gas swap of 5,000 MMBtu/d at $3.40/MMBtu through December 2026, providing meaningful downside protection. Combined with improved regional pricing and a stronger financial position, Southern is well-positioned to execute a disciplined capital program focused on sustainable growth and long-term shareholder value creation.

Southern will continue to monitor NYMEX pricing and basis differentials and remains prepared to tactically hedge additional volumes as market conditions warrant. The Company appreciates the continued support of its stakeholders and looks forward to providing further updates as it advances its operational and financial objectives.

Prospex Energy

Prospex has provided an update from the Selva Malvezzi production concession in Italy following the publication by Po Valley Energy Limited of an update on activities.

Po Valley Operations Pty Limited, a wholly owned subsidiary of PVE is the operator of the Selva Malvezzi production concession, which has a 63% working interest, while Prospex has the remaining 37% working interest.

Highlights

• 3D seismic survey underway to improve geological understanding across the concession – commenced 13 November 2025 and is expected to be completed by mid-December, weather permitting.
• The acquired data will undergo time-domain volume processing, anticipated to be completed by April 2026, producing a full three-dimensional subsurface model for future development planning.
• Successful routine slickline integrity test completed on well PM-1 on 5 November 2025.
• PM-1 well continues to deliver strong performance from the C2 level, having produced 61 million scm (2.1 bcf) since first gas on 4 July 2023
• New noise reduction barriers installed at the Selva gas processing plant as part of ongoing operational improvement and community engagement initiatives.
• Vegetation screening planted along the perimeter of the PM-1 facility.

Mark Routh, Prospex’s CEO, commented:
“I am very pleased to report that Po Valley Energy continues with the sound and efficient operation of the Selva Malvezzi Production Concession.  Of particular note is the progress being made on the 3D seismic survey, which started on 13 November 2025.  The processed results will optimise the subsurface drilling targets of the four new wells to be drilled on the Selva Malvezzi concession.

“Production from the PM-1 well at Selva continues at a steady and reliable rate of ~80,000 scm/d.  Having produced 61 million scm of natural gas since first production on 4 July 2023, the Prospex 37% share of the remaining 1P/2P/3P net reserves in the PM-1 well are 0.8/4.2/10.3 bcf.  See Table 1 below for further information.”

Good news from Prospex in that the 3D seismic is already underway and will be completed by the end of the month. Processing will completed by April 2026 and should reveal the best targets for the four new wells to be drilled at the Selva Malvezzi concession. 

It seems that despite production of 61 scm of natural gas since 2023, the company remain confident that their 37% share of the remaining 1P/2P/3P net reserves in the PM-1 well are 0.8/4.2/10.3 bcf. All bets now are on the seismic data with hopes for a further drilling programme. 

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