Star Energy Share Price (STAR)

STAR

“The Company is looking to bring in new partners in 2H24 to invest in development projects, but acknowledged that asset sales might also help to demonstrate the industry value of the UK oil and gas portfolio.”

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Star Energy (STAR LN) 11.1p, Market Cap £14m:

Transition strategy continues

• Star reported average FY23 production of 2.1kboe/d generating £49.5m revenues and £15m operating cash flow (before working cap movements) to end the period with net debt of £1.6m as at 31st December.

• The Company guides average FY24 production of 2.0kboe/d and operating costs of c.$41/boe, which is based on £5.5m cash capex that includes near-term incremental projects with short cycle returns and maintenance.

• Star’s independent CPR estimated a small increase in YE23 reserves to 11.7mboe (1P) and 17.5mb (2P), which has a pre-tax NPV of $143m and $235m respectively, plus 18.6mboe of 2C contingent resources.

• The Company commented that its UK projects continue to suffer from regulatory creep and ever-increasing delays in obtaining regulatory approval for environmental permits, which are commonly in excess of 12M.

Star continues to optimise its UK oil and gas assets by investing to maximise recovery from the existing 2kboe/d onshore production base and progress near term incremental development opportunities to utilise the £240m tax loss.

However, management recognised on the results call that the UK onshore E&P sector remains out of favour and that the market gives little value to its pivot towards the growth of the geothermal business in the UK and in Croatia.

The Company is looking to bring in new partners in 2H24 to invest in development projects, but acknowledged that asset sales might also help to demonstrate the industry value of the UK oil and gas portfolio. Despite Star’s early mover advantage on geothermal energy that can be funded via its new five-year €25m credit facility, we think the market needs more clarity on UK tariffs and Croatian funding partners to enhance visibility on the opportunity set and commerciality of these projects.

Https://www.sharecast.com/amp/news/broker-recommendations/canaccord-genuity-raises-target-price-on-star-energy--16651330.html

So near term for STAR we have

 

Glentworth Phase 1 oil project environmental permits are expected imminently

Corringham site preparation complete

Bletchingley gas-to-wire secured grid connection

 

NHS hospital trust geothermal projects in Manchester and Salisbury progressing through feasibility stage

Croatia development plan

Farm in for glentworth and corringham

SSE JV q2

Executed well test on Ernestinovo-3 well in Croatia, satisfying exploration licence obligations. Data analysis from the well, once completed, will allow a ranking exercise for all three licences and lead to the production of a development plan for the most prospective opportunity

Data analysis of Croatia and development plan soon too