Southern Energy Corp. (SOUC LN/SOU CN): Gas prices up. Liquid rich opportunity at Williamsburg offers diversification and scale.
• 3Q25 production averaged 2,076 boe/d, in line with our expectations.• The GH LSC 13-13 #2 well in the Lower Selma Chalk continues to exhibit a notably shallower decline profile than prior Upper Selma Chalk wells. Current output is ~1.7 mmcf/d, with an IP120 outperforming typical Upper Selma Chalk results.
• The U.S. government shutdown has contributed to the delayed resolution of the transportation tariff dispute. We now anticipate the ~400 boe/d of curtailed volumes will return online in 1Q26.
• The Magee conventional well is contributing ~85 bbl/d of oil in 4Q25.
• Henry Hub futures are strengthening, averaging US$4.36/mcf in December, with 2026 futures above US$4/mcf. If sustained, this pricing could support recompletion of the second DUC and a resumption of gas drilling.
• We re-iterate our target price of £0.25 per share, which is based on our ReNAV with an Unrisked NAV of ~£0.50 per share.
Williamsburg, a liquid rich opportunity
• Over recent months, Southern has consolidated its land position at Williamsburg, an oil- and liquids-rich play that enhances portfolio diversification. The opportunity has been de-risked by multiple successful wells drilled in the Cotton Valley sands at the Seminary field, located just six miles away. Importantly, the same Cotton Valley sands are present at Williamsburg, at comparable depth, pressure, and temperature and with the same oil gravity, as confirmed by the existing Williamsburg test wells.
• The development of Seminary is conventional with very low decline rates. Typical well costs of ~US$3–3.5 mm deliver attractive returns. For example, the Doleywell, drilled two years ago, tested at 488 bbl/d (oil) and continues to produce 350–400 bbl/d (oil). The Conner well, tested in late 3Q25, achieved an initial rate of 624 bbl/d (oil).
• Drilling similar wells at Williamsburg would have a materially positive impact on Southern’s cash flow and balance sheet. Moreover, the Williamsburg structure is nearly five times larger than Seminary (>7,200 acres vs. ~1,500 acres), underscoring the scale of the opportunity.
• Our unrisked NAV for Williamsburg is £0.22 per share.
Valuation
Our 2P NAV for Southern is ~£0.09 per share (~2.5x the current s/p). The lower Selma Chalk additional 45 locations have an unrisked NAV of £0.09 per share. Our ReNAV for the company is £0.24 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.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.