Southern Energy (AIM:SOUC), a producer of natural gas and light oil assets in Mississippi, told spudded the Terrible Creek 21-2 #2 Cotton Valley test well in its Williamsburg field on 11 August.
The well is the first of two farm-out commitment wells planned this year under a Joint Venture Wellbore Participation Agreement announced on 26 May.
Southern will pay roughly 50% of the gross drilling and completion costs, roughly $3.9 million per well, for a 50% working interest, with the well targeting a planned depth of approximately 19,000 feet.
Completion and testing will begin once the drilling rig moves off site.
"Given the recent success of competitor drilling offsetting our acreage, we expect success at Williamsburg to initiate growth in the oil and liquids weighting at Southern," said Ian Atkinson, president and chief executive.
Separately, Southern said it has engaged ICP Securities to provide automated market making using its ICP Premium algorithm, aimed at correcting temporary imbalances in supply and demand for its shares. ICP will be paid a monthly fee of C$7,500 plus taxes under an agreement effective from 10 August, running for an initial four months before rolling into monthly renewals unless either party gives 30 days' notice.
Atkinson said the appointment reflects a "broader commitment to improving transparency, liquidity, and long-term value creation for Southern shareholders."
News Intelligence what this means for the company
Southern Energy has spudded its first of two committed Cotton Valley test wells in Mississippi, targeting 19,000 feet depth with the company bearing roughly 50% of ~$3.9 million gross drilling and completion costs for a 50% working interest. The well represents execution on a farm-out agreement announced in May; separately, the company engaged an automated market maker (ICP Securities) at C$7,500 monthly to improve share liquidity—a modest operational step that signals management focus on shareholder value but carries no material financial commitment.
The spud advances Southern's stated strategy to grow oil and liquids weighting through Cotton Valley development, contingent on drilling success; however, the well's outcome remains unproven and the company's 2025 production of 12,039 Mcfe/d and adjusted funds flow of $3.0 million provide limited financial cushion for drilling risk. The market-making engagement addresses a liquidity constraint on a micro-cap stock but does not alter the underlying exploration and reserve-conversion risk.
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