Southern Energy Corp on Friday said it continued to aim for a significant spike in oil equivalent production as it reported a turn to a loss in the second quarter of 2023 as the prices for oil and natural gas plummeted.
Southern Energy is a natural gas exploration and production company, focused on acquiring and developing conventional natural gas and light oil resources in Mississippi, Louisiana, and East Texas.
The company said in the three months to June 30, net loss was $3.8 million, swung from a profit of $2.8 million a year before.
The average realised oil price in the second quarter fell 33% to $72.83 per barrel from $109.01 a year prior, while the average realised natural gas price plummeted to $2.18 per 1,000 cubic feet of gas from $7.53.
Net debt as at June 30 increased to $26.2 million from $12.8 million a year prior.
Chief Executive Officer Ian Atkinson said: ‘Our focus for Q2 2023 was primarily on completing and integrating the Gwinville acquisition. We have started and will continue, to maximize operational synergies of the assets, as well as position the company for the return to growth as commodity prices continue to improve. In addition to considerable synergistic value and high-quality drilling inventory, the Gwinville Acquisition provides Southern with access to sell gas into the Florida Gas Transmission system where, similar to Transco Zone 4, we are realizing continuous premium pricing to the NYMEX natural gas price.’ NYMEX is a liquid benchmark for North American natural gas futures, used as an international benchmark price.
CEO Atkinson added that the company continues to aim for production of 25,000 barrels of oil equivalent per day, compared to an average output of 2,651 in the second quarter of 2023.
In May, Southern Energy bought the remaining acreage at Gwinville in Jefferson Davis County in Mississippi at the interior salt basin for $3.2 million in cash.
At Gwinville, Southern Energy plans to complete a workover on acquired wellbores by the end of the third quarter of 20233.
Looking further ahead, the company said it has four high-impact uncompleted wells that can be quickly completed and brought online through its equipment at higher natural gas prices, which it expects will improve per 1,000 cubic feet natural gas equivalent operating expenses in the fourth quarter of 2023.
Southern Energy shares fell 2.1% to 22.52 pence each on Friday morning in London.
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