Star Energy Group (LSE:STAR) has signed an agreement to sell its Croatian subsidiary IGeoPen d.o.o. To Enna Geo d.o.o.
The consideration comprises an initial cash payment of €1.5 million, of which Star Energy's share is €1.3 million, plus an earn-out of €0.5 million per licence payable on commercial operation of a geothermal plant on each of IGeoPen's three licences (Ernestinovo, Sječe and Pčelić), giving Star Energy a potential further €1.5 million, and the company says the disposal will release €5.2 million of restricted cash and remove future capital commitments for the AIM-listed UK oil and gas and geothermal company.
"This transaction is about capital discipline, simplification and strategic focus," said Ross Glover, Chief Executive Officer.
IGeoPen recorded a loss before tax of €3.2 million for the year ended 31 December 2024, had net liabilities of €5.5 million at that date and is forecast to incur an investment-related loss of €1.6 million for the year ending 31 December 2025. IGeoPen's activities were partially financed through a Kommunalkredit Austria debt facility and the company says a portion of the proceeds will be reinvested in UK geothermal assets under that facility, with the balance to support general corporate purposes.
The board says the disposal allows management to concentrate on building a stronger, more resilient UK oil and gas business, pursue inorganic oil and gas opportunities to monetise £250 million of tax losses and maintain a capital-efficient UK geothermal development platform.
Completion is expected in H2 2026.
