Southern Energy Corp. (SOUC LN/SOU CN): First liquid-rich well at Williamsburg to spud in June
• 4Q25 production of 1,933 boe/d was in line with our forecasts and there were no surprises in the 4Q25 financials.• Near‑term attention now shifts to the first liquids‑rich well at Williamsburg, scheduled to spud in late June. The potential prize is significant, offering exposure to WTI pricing rather than Henry Hub. We currently assume ~43 mmboe of unrisked liquids‑rich resources at Williamsburg, with an unrisked NAV of £0.24 per share (around 6× the current share price).
• Our base case assumes each well contributes ~200 boe/d, a conservative assumption relative to the Conner #1 well, which delivered 624 bbl/d on the neighbouring Seminary analogue. At a 350 bbl/d IP and a shallow decline profile, a Williamsburg well pays back in under six months at US$80/bbl WTI. In a success case, we expect Southern to prioritise capital allocation to this asset.
• We reiterate our £0.20 per share target price, based on our ReNAV.
Gwinville and Mechanicsburg
• Southern added new perforations to a producing oil well at Magee, delivering an incremental ~80 bbl/d since 1 April 2026 at a modest cost of ~US$25,000.
• The company is re‑evaluating its Gwinville gas development strategy in light of weak gas prices. An acid treatment on the GH LSC 14‑06 #4 lateral DUC successfully accessed the Selma Chalk reservoir through the cement, testing the hypothesis that the naturally fractured formation could flow without stimulation. The well has produced ~0.5 mmcf/d over 22 days with minimal decline.
• The next phase under consideration is to drill an open‑hole multi-lateral well, at an estimated cost of US$2.5–3.0 mm (vs. ~US$4.3 mm for a new multi‑stage frac’d horizontal). Expected ultimate recovery is 2–2.5 bcf per well, with IP rates of 2.5–3.0 mmcf/d and a very shallow decline profile. Such wells would be economic at US$3.30–3.50/mcf Henry Hub, compared with US$4.00–4.50/mcf for the current design.
• The transportation dispute could be resolved in 3Q26, enabling the restart of ~400 boe/d from Mechanicsburg and Greens Creek. Mechanicsburg also offers 6–12 additional liquids‑rich drilling locations.
Valuation
Our ReNAV is £0.20 per share with an unrisked NAV of £0.52 per share.
Auctus Advisors is a specialist Equity Capital Markets and Advisory business with a focus in the Energy Sector.
The partners have complementary skill sets, with decades of experience across Equity Capital Markets, Investment Banking and the Energy industry. We have worked at Société Générale, Canaccord Capital, BMO Capital Markets and Schlumberger. Most recently we have worked together for many years at GMP FirstEnergy.
Auctus has been set up at the beginning of a new decade in which we see significant opportunities in the Energy space. Globally, demand for energy is at record levels and continues to grow. Conversely, investment in traditional energy sources has been severely constrained. We believe this imbalance creates opportunities for both companies and investors.
Auctus provides Corporate Broking, Equity Research and Investment Banking services.
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