Southern Energy (SOU.V, SOUC.L) reported a narrowed net loss in the first quarter and executed a Joint Venture Wellbore Participation Agreement in the Williamsburg area with a strategic partner to evaluate the Cotton Valley oil prospect, it said on Tuesday.
For the three months ended March 31, the company reported net loss of US$1.3 million or breakeven per share, compared with $3.9 million or $0.02 loss per share, a year earlier.
Petroleum and natural gas sales increased to $5.5 million during Q1 compared with $5.1 million, a year-ago.
The company expects development activity to increase during the remainder of 2026, including plans to complete the final City Bank DUC at Gwinville, "further enhancing its production profile and operational flexibility." With the Joint Venture Wellbore Participation Agreement, Southern intends the partnership to reduce its capital exposure on the first two wells and to test this "significant resource opportunity at multiple locations."
The company has secured a drilling rig for the operation and is expecting to spud the first commitment well in late July. Its board has also approved the capital spending of 50% of the gross drill and completion costs of $3.9 million for the first commitment well.
Shares of the company closed down 6.3% to $0.075 on Monday on the TSX Venture Exchange.