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Mission Statement
To build a substantial oil and gas company in the southeastern United States through the consolidation
and development of prolific reservoirs outside of the expensive shale basins. Its goal is to continually grow shareholder value via
organic growth and by making strategic, accretive acquisitions. In these areas Southern has access to major pipelines, significant
company owned infrastructure, year-round access to drill, and the ability to change focus on natural gas or crude oil development
as commodity prices fluctuate; all factors that contribute to mitigating corporate risk. Management is committed to efficient per share growth with 22% ownership on a non-dilutive basis and 32% on a fully diluted basis.
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Southern Energy Corp. is an oil and natural gas exploration and production company primary focused on developing conventional and unconventional light oil and natural gas resources in the SE Gulf States of Mississippi, Alabama, and Louisiana. Meanwhile US Gulf States are currently providing access to premium commodity pricing in North America.
The Company currently holds a high working interest in more than 59,000 net acres in the SE Gulf Coast with approx. 1,650 boe/d of low decline production.
The Company operates its central Mississippi assets that span approx. 29,000 net acres of mineral rights, held by production, with 240 producing wells that average ~1,600 boe/d or >95% of total production. The assets operate in three main fields: Gwinville, Williamsburg, and Mechanicsburg.
The corporate strategy is to focus on in-field, multi-zone stacked pay development drilling complemented by accretive oil and gas acquisition opportunities in the US Gulf Coast states. The Company's low base decline, high netback production, substantial inventory of internally generated locations and the recapitalized corporate structure will allow for sustainable and efficient per share growth. The Company has identified a number of potential acquisition targets in the same operating areas with similar producing characteristics and intends to pursue those opportunities in the near future.
The Management team has extensive experience with developing assets and creating value through the utilization of horizontal drilling and multi-staged fracture completion techniques. In addition, its Board of Directors also bring substantial technical, financial and capital markets expertise and experience to the Company.
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Recent Corporate Developments |
 | Proved developed producing net present value of $37.1 MM on a before tax basis, discounted at 10%. Total Proved net present value of $73.4 MM;
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| | Completed a C$18 million non-brokered recapitalization financing;
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| | Arranged a US$13.5 million credit facility with a US independent commercial bank;
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| | Closed the acquisition of on-shore US Gulf Coast assets valued at US$24.4 million;
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| | >59,000 net acres (30,000 undeveloped acres) in Mississippi and Alabama;
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| | ~ 1,650 boe/d of low decline production;
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| | Owned infrastructure with excess capacity provides the ability to accelerate growth;
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| | Finalized near-term development program;
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| | Drill identified HZ location at Gwinville in early Q2 2019 targeting the Selma Chalk formation.
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Stable Production Base
- Low decline US Gulf Coast production base of ~1,650 boe/d (14% oil)
- Operated assets with over 95% working interest
- Control of easily expandable infrastructure and abundant regional take away capacity
- Stacked pay with up to 12 producing formations, each with development upside opportunities
Executable Growth Strategy
- Consolidation strategy targets high quality assets in under-exploited basins at below market metrics
- Organic growth with 60+ horizontal gas locations at Gwinville and 60+ vertical oil locations at Williamsburg
- Material location inventory within stacked pay of the main asset
- Access to new horizontal conversion light oil play; Producing analog wells have IP30 rates of 1,500+ boe/d
Superior Commodity Pricing
- US Gulf States are currently providing access to the best commodity pricing in North America
- Henry Hub gas benchmark traded at an average premium of C$2.50/Mcf to AECO (Alberta Energy Company, the Canadian benchmark price for natural gas) in 2018
- LLS crude benchmark traded at an average premium of C$20+/bbl to Edmonton Par (a benchmark light crude oils for the Canadian market) in 2018
- LNG upside; exposure to current area capacity of 4 Bcf/d, increasing to 10+ Bcf/d by year-end 2020
Experienced Operating Team
- Strong leadership team with experience in the US Gulf States
- Management has been directly operating in the area of focus since 2013
- Modern drilling and completion techniques have not been implemented in many of these formations or fields
- Provides investors with access to premium US assets inside a publicly traded Canadian entity
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Southern Energy operates its Central Mississippi assets that span approx. 29,000 net acres of mineral rights, held by production, with 240 producing wells that average ~1,600 boe/d or >95% of total production. The assets operate in three main fields: Gwinville, Williamsburg, and Mechanicsburg.
The Company plans to initiate the drilling of its first high impact horizontal well at the Company's Gwinville field in Jefferson-Davis County, Mississippi in early Q2 2019. The drilling is focused on developing and unlocking the potential value of the Company's Selma Chalk natural gas formation through modern drilling and completion techniques.
At Gwinville, the Company estimated in 2017 that the Selma Chalk formation contains approximately 1+ trillion cubic feet (Tcf) of Original Gas In Place (OGIP) with current recovery factor estimated at less than 15%. Recent horizontal wells in an analog pool have resulted in IP30's greater than 7 MMcf/d and the type wells anticipated have strong economics in today's price environment. The Gwinville field also has historical production from up to 12 stacked pay formations with low recovery factors which will provide similar multi-zone development opportunities in the future.
Gwinville Field Overview
- 1+ Tcf OGIP in Selma Chalk with current recovery factor < 15%
- Multi-zone production of 1.5 Tcf, 12 MMbbl, current decline < 8%, with additional upside potential
- At least 3 stacked horizons to be accessed with horizontal drilling and modern completion designs (Upper Selma, Lower Selma & City Bank)
- Significant potential below the Tuscaloosa from zones which have produced more than 750 Bcf and 80 MMbbl from immediately offsetting fields
- Owned and operated infrastructure with expandable capacity
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| | Proved developed producing ("PDP") net present value of $37.1 MM on a before tax basis, discounted at 10%. Total Proved ("TP") net present value of $73.4 MM.
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| | Year over year PDP reserve increase of 5.2 MMboe, primarily associated with the acquisition of the Gulf Pine Energy U.S. assets in December 2018; represents a PDP Finding, Development and Acquisition ("FD&A") cost of $6.45/boe.
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| | Year over year TP reserve increase of 11.0 MMboe, representing a TP FD&A cost of $3.03/boe.
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| | >Based on a management-estimated current operating netback of $12.50/boe, the TP FD&A recycle ratio for 2018 is 4.1.
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| | ase PDP decline on Southern's U.S. assets estimated at less than 13% for 2019.
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Summary of Gross Oil and Gas Reserves as of December 31, 2018
Summary of Net Present Values of Future Net Revenue as of December 31, 2018
Ian Atkinson - President & CEO
Ian Atkinson has been the founder of several private and public oil and gas companies with over 25 years of technical, executive and board of director experience. Mr. Atkinson was the founder, President and Chief Executive Officer of Gulf Pine Energy since 2014. Prior thereto, Mr. Atkinson was a founder and Senior Executive Officer of Athabasca Oil Corporation. At Athabasca, Mr. Atkinson was instrumental in the successful completion of Athabasca's IPO and a significant joint venture with PetroChina. Mr. Atkinson holds a Masters of Science degree in Engineering and an ICD.D designation.
Calvin Yau - Vice President, Finance & CFO
Calvin Yau was a co-founder of Gulf Pine Energy and was the Vice President, Finance and Chief Financial Officer since 2014. Mr. Yau is a chartered accountant with over 15 years of financial experience including numerous debt and equity offerings and M&A transactions in the oil and gas industry.
Chris Birchard - Vice President, Geosciences
Chris Birchard was a co-founder of Gulf Pine Energy and was the Vice President, Geosciences since 2014. Mr. Birchard has over 20 years of exploration and management experience in the oil and gas industry. Previously, Mr. Birchard was the Senior Geologist and Team Lead at Athabasca. Mr. Birchard discovered the largest conventional oil pool in Alberta in the last 25 years - Dixonville Montney 'C'.
Erin Buschert - Vice President, Land
Ms. Buschert has over 20 years of extensive mineral & surface land, M&A, and contract negotiations experience. Prior to joining predecessor Gulf Pine Energy in 2014, Ms. Buschert held senior land roles at Crescent Point Energy, TriStar Oil & Gas, and ARC Resources. Ms. Buschert is a member of the American Association of Petroleum Landmen (AAPL) and the Canadian Association of Petroleum Landmen (CAPL).
Jim McFadyen - Vice President, Operations
Mr. McFadyen brings over 20 years of operational experience in the oil and gas industry to the management team, most recently acting as the VP Operations at both Gulf Pine Energy and Dixie Energy Trust. Prior thereto, Mr. McFadyen held the position of Operations Manager at Athabasca Oil Corporation for the Light Oil Division from May 2011 to Dec 2013. Prior thereto, Mr. McFadyen held senior operational roles at Galleon Energy, Fairborne Energy, and Renaissance Energy.
Gary McMurren - Vice President, Engineering
Gary McMurren was a co-founder of Gulf Pine Energy and was the Vice President, Engineering since 2014. Mr. McMurren has over 20 years of engineering, operational and management experience in the oil and gas industry. Previously, Mr. McMurren was the Director of Light Oil at Athabasca where he built a team of over 100 staff and grew production to company mandated levels in 18 months.
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The information herein contains forward-looking statements. Such forward-looking statements involve certain risks,
assumptions and uncertainties, including but not limited to the ability to generate and secure product sales. In each case actual results may differ materially from such forward-looking statements. Both Southern Energy Corp. and investcom.com does not undertake to publicly update or revise its forward-looking statements even if experience or future changes make it clear that any projected
results (expressed or modified) will not be realized. Investors are cautioned against placing undue reliance on forward-looking statements. The material contained herein is for information purposes only and is not and is under no circumstances intended to constitute an offer to sell or a solicitation to buy any securities or a recommendation as to the purchase of any securities.
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Forward Looking Statements:
This company profile contains information that may be considered to be forward-looking information within the meaning of applicable securities
laws. Such forward-looking information relates to internal projections, expectations, estimates or beliefs relating to future events or future
performance . All statements contained herein, other than statements of historical fact, may be forward-looking information. Forward-looking
information is often, but not always, identified by the use of words such as "seek", "anticipate", "plan", "continue", "estimate", "expect", "may",
"will", "project", "predict", "propose", "potential", "targeting", "intend", "could", "might", "should", "believe" and similar expressions. These
statements are only predictions and actual events or results may differ materially. Although the recapitalized corporation believes that the
expectations reflected in the forward-looking information contained in this company profile are reasonable, it cannot guarantee future
results, levels of activity, performance or achievement since such expectations are inherently subject to significant business, economic,
competitive, political and social uncertainties and contingencies. Therefore, investors should not unduly rely on the forward-looking information
contained in this investor presentation as actual results may vary.
With respect to forward-looking information contained in this company profile, the recapitalized corporation has made assumptions regarding,
among other things: the legislative and regulatory environment in the jurisdiction where it intends to operate, the impact of increasing
competition, costs related to exploration, drilling, seismic and the development of oil and gas properties will remain consistent with historical
experiences, anticipated results of exploration and drilling activities and the price of oil and gas. The forward-looking information contained in
this company profile involves known and unknown risks, uncertainties and other factors that may cause actual results or events to differ
materially from those anticipated in such forward-looking information.
Actual results could differ materially from those anticipated in the forward-looking information contained in this presentation as a result of the
following risk factors: volatility in the market prices for oil and natural gas, unanticipated changes in any applicable royalty regime, uncertainties
associated with estimating resources and reserves, geological problems, technical problems, drilling and seismic problems, liabilities and risks
including environmental liabilities and risks inherent in oil and natural gas operations, fluctuations in currency and interest rates, incorrect
assessments of the value of acquisitions, unanticipated results of exploration and development drilling and related activities, competition for
capital, competition for acquisitions of reserves and resources, competition for undeveloped lands, competition for skilled personnel,
unpredictable weather conditions, the impact of general economic conditions and political conditions, industry conditions including changes in
laws and regulations including adoption of new environmental laws and regulations, the possibility of future financings and divestitures,
expectations regarding future production and obtaining required approvals of regulatory authorities.
The forward-looking information contained in this company profile speaks only as of the date of this company profile and is expressly
qualified, in its entirety, by this cautionary statement and the recapitalized corporation disclaims any intent or obligation to update publicly any
forward-looking information, whether as a result of new information, future events or results or otherwise, other than as required by applicable
securities laws. This information is confidential and is being presented to potential investors solely for information purposes. These materials do
not and are not to be construed as an offering memorandum. An investment in securities involves a high degree of risk and potential investors
are advised to seek their own investment and legal advice.
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