Star Energy closes €25 million credit facility to support geothermal growth
Salisbury District Hospital, England (source: Richard Avery, CC BY-SA 3.0, via Wikimedia Commons)
Carlo Cariaga
9 Apr 2024
British energy company Star Energy Group has closed a €25 million secured facility, part of which will fund geothermal projects in the UK and Croatia.
UK-based Star Energy Group plc (Star Energy) has announced the closing of a new €25 million secured facility that will provide funding for both its transition to geothermal energy and continued investment in its oil and gas business. The credit facility has been provided by Kommunalkredit Austria AG.
The unique, tailored package of the secured facility has two components – Facility A and Facility B.
Facility A will fund the repayment of the outstanding US$7 million balance on Star Energy’s reserves based lending facility from BMO, which was due at the end of June 2024. Facility B provides funding for Star Energy’s geothermal development activities. It carries an interest rate of Euribor + 6% and has a five year term, with repayments scheduled to commence from 31 December 2025.
The British energy company entered the Croatian geothermal market via subsidiary GT Energy Croatia Limited (GTEC) in 2023 with the acquisition of controlling stake in Croatian geothermal developer A14 Energy Limited, which holds the exploration license for the Ernestinovo license area in eastern Croatia via subsidiary IGeoPen. Star Energy had then deployed a drilling rig to the Ernestinovo geothermal license area, with the intention to re-enter the Ernestinovo-3 well and test the geothermal potential of the fractured metamorphic pre-Cenozoic formation.
Star Energy had also been selected to deliver a geothermal heat solution for the Salisbury District Hospital NHS Trust in Wiltshire, England. This is on top of geothermal projects for the Manchester University NHS Foundation Trust and the Etruria Valley in Stoke-on-Trent.
“Securing this facility is an important milestone for Star Energy. It allows us to use cashflows from our existing oil and gas business to optimise near-term conventional production (with quick pay-backs) and deliver our transition strategy; namely developing and monetising our geothermal business in both the UK and Croatia,” commented Chris Hopkinson, CEO of Star Energy.
“We believe that we have particular, tangible competitive advantages in making the energy transition. We have a highly qualified team already in place and an established track record in onshore development – everything from sub-surface expertise and knowledge of planning and other environmental processes through to long-term and responsible operatorship competence. These skills are valuable in conventional and geothermal projects alike.”
Source: Star Energy Group via AIM
