Star Energy has signed an agreement for the sale of  its Croatian subsidiary IGeoPen, to Enna Geo d.o.o. IGeoPen's direct parent is A14 Energy of which Star Energy owns 71%, with 29% being owned by its JV partner, Peninsula Internationa.

IGeoPen holds three Croatian geothermal exploration licences; Ernestinovo, Sječe and Pčelić.

Consideration for the sale consists of two elements:

1. An initial cash consideration of €1.5 million - Star Energy's share is €1.3 million reflecting the A14 Energy shareholder agreements; and
2. Financial Earn-out of €0.5 million per licence which is payable on the commercial operation date of a geothermal power plant developed on each of the three licences - Star Energy's  potential share is €1.5 million.

IGeoPen's financial profile reflects its early-stage geothermal development activities, including a loss before tax of €3.2 million for the year ended 31 December 2024 and net liabilities of €5.5 million at that date. The forecast for the year ending 31 December 2025 includes an anticipated investment-related loss of €1.6 million.

Given the delay in the announcement of a premium price tariff for geothermal projects in Croatia by the Croatian Government, the Group believes that a sale of IGeoPen is in the best interests of its shareholders. The transaction delivers a clear strategic refocus of the Group's portfolio, allowing management to concentrate on its core UK oil and gas and geothermal assets. It releases €5.2 million of restricted cash and removes future capital commitments arising from the Croatian licences, strengthening the balance sheet and enhancing financial flexibility, while enabling more disciplined and value-accretive capital allocation on the Group's UK business.

IGeoPen's activities were partially financed through the Kommunalkredit Austria AG debt facility, and a portion of the consideration will be reinvested in UK geothermal assets, in accordance with the terms of the facility, with the balance supporting general corporate purposes and ongoing strategic priorities.

The Board believes the sale is consistent with its disciplined approach to capital allocation and focus on driving shareholder value. It strengthens the Group's balance sheet and reallocates capital away from a non-core international business.

Following completion, which is expected in H2 2026, management will be focused on the UK business and on those areas where the Board believes the best opportunities exist to create value for shareholders, namely:

• Building on our already stable and resilient oil and gas operations by continuing to deliver improvements and enhancements similar to those we have successfully implemented to date across the producing portfolio;
• Pursuing inorganic oil and gas opportunities in support of the Group's strategy to create value from its substantial UK tax losses; and
• Maintaining a capital efficient UK geothermal development platform while continuing to advocate for the policy changes needed to support investment in the sector.

Commenting today, Ross Glover, Chief Executive Officer, said:
"This transaction is about capital discipline, simplification and strategic focus. It releases meaningful cash of €5.2 million, enhances financial flexibility and enables us to focus fully on our UK operations where we see the clearest path to value creation. That puts management's attention firmly where we see the best route to creating shareholder value: a stronger and more resilient UK oil and gas business, pursuing inorganic oil and gas growth opportunities to create value from our £250 million of tax losses, and maintaining our UK geothermal option at low cost while we continue to push for policy change in both geothermal energy but also in domestic oil and gas production."

KeyFacts Energy: Star Energy Croacia country profile   l   KeyFacts Energy: Geothermal news