08:24 AM EDT, 05/28/2024 (MT Newswires) -- Southern Energy ( SOUTF ) (TSXV:SOU and AIM:SOUC), an energy producer with natural gas and light oil assets in Mississippi, on Tuesday reported a loss for the first quarter and a decline in sales amid low heating demand for natural gas and suppressed pricing.

The company said its first-quarter net loss widened to US$3.1 million ($4.2 million), or US$0.02 per fully diluted share, from a loss of US$1.1 million, or US$0.01 per fully diluted share, a year earlier.

Petroleum and natural gas sales for the quarter ended March 31 were US$4.8 million, down from US$5.2 million a year earlier. The company said the sales dropped 8% mainly due to the decline in natural gas pricing.

Adjusted funds flow from operations for Q1 were US$2.2 million, or US$0.01 per fully diluted share, up from US$1.7 million, or US$0.01 per fully diluted share, a year earlier.

The company reported an average production of 18,055 Mcfe/d during Q1, up 15% from the year-ago quarter.

"As we look to the second quarter and second half of our financial year, we are already seeing a significant recovery in excess of 50% from the recent lows in natural gas pricing which we expect will allow us to re-initiate growth in completing one of the three remaining Gwinville drilled but uncompleted wells," Ian Atkinson, president and chief executive officer of Southern, said.

Further, Southern said it has US$10 million of unused capacity on its credit facility. The company can use this capacity to complete the DUCs at higher natural gas prices or can be used to be opportunistic with counter-cyclical inorganic growth opportunities.

The company's stock, which rose 4.6% in Canada yesterday, rose 2.6% as of 8:39 am GMT in London Stock Exchange trading.