REG - Star Energy Group - Trading Update

Star EnergyAnnouncement

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RNS Number : 2438U  Star Energy Group PLC  25 February 2026

25 February 2026

 

Star Energy Group plc (AIM: Star)

("Star Energy" or "the Company")

 

Trading Update

 

Star Energy is pleased to provide the following trading update for the year to
31 December 2025. The figures have not been audited and are subject to change.

 

Key highlights:

 

·    Delivered material cost reduction: G&A savings of more than £2.0
million year-on-year, with further cost discipline continuing into 2026.

·    Significantly reduced geothermal expenditure in 2025 (down c.£1.2
million versus 2024), while maintaining progress on the Company's highest
value opportunities in our geothermal portfolio, such as projects in the
Manchester and Southampton areas.

·    Net production for 2025 averaged 1,886 boe/d; the Company anticipates
production of c.2,000 boe/d in 2026, supported by a flexible capital programme
focused on quick-return, cost-saving and resilience projects.

·    Strong liquidity and active balance sheet management: cash at 31
December 2025 was £7.6 million (excluding restricted cash) and the Company
had drawn £11.9 million (€13.6 million) under its loan facility; restricted
cash of £4.5 million (€5.2 million) relates to performance bonds for
Croatian licence commitments.

·    Monetised non-core assets: completed the sale of non-core land,
receiving proceeds of £6.3 million in H1 2025.

·    Disciplined investment in the producing portfolio: £5.3 million
invested in oil and gas assets in 2025, including £2.7 million on the
Singleton gas-to-wire project and the remainder on production optimisation and
plant upgrades. In addition, we are forecasting £1.4 million spend on
abandonment activities.

·    Maintaining flexibility in 2026 capex (currently forecast at c.£6.3
million), including £2.6 million to complete Singleton gas‑to‑wire
(targeting Q2 2026 start-up; forecast production c.74 boe/d).

·    Realised oil hedging gain of £1.2 million in 2025. The Company has
continued its hedging programme in 2026, placing hedges to protect the
downside given the forecast oversupply in the market.

·    The Company made Energy Profits Levy payments of £1.7 million and
£1.0 million based on taxable profits for the years ended 31 December 2024
and 31 December 2023, respectively.

·    The Company continues to assess value-accretive acquisition
opportunities where the Company's substantial UK tax losses and allowances can
be utilised to enhance returns for shareholders.

 

Commenting today, Ross Glover, Chief Executive Officer, said:

 

"Our focus remains on deploying our capital as rigorously as possible combined
with delivering a strong operational performance.  Against the backdrop of
significant volatility in oil prices during the year and a challenging
operating environment we strengthened the resilience of the core oil and gas
business, delivering material administrative cost savings of more than £2.0
million and maintaining effective downside protection through our hedging
programme. We also materially reduced geothermal expenditure versus 2024.  We
maintain a low cost development platform, ready for investment when the right
policy frameworks are put in place.

 

Cash generated from operations, alongside the £6.3 million proceeds from the
Holybourne disposal in April 2025, supported continued investment in the asset
base and reduction in net debt. These actions have helped underpin a
meaningful re‑rating in the Company's equity, with the share price
increasing from 7.4p on 2 January 2025 to 9.5p on 31 December 2025 and
standing at 13.5p as at 24 February 2026.

 

Production volumes in 2025 were below our expectations, driven by a number of
discrete issues. At Gainsborough and Welton, unplanned National Grid power
outages during summer infrastructure upgrades, together with a process
pipeline failure, impacted output; the grid works are now complete, no
shutdowns are scheduled for 2026 and the pipeline issue has been resolved. At
Stockbridge, water disposal constraints reduced production and we are
addressing this through conversion of a production well to a water injector,
with production expected to be reinstated in Q3 2026. Across the portfolio we
are working to minimise downtime and have a programme of work that will
holistically assess, on a field by field basis, the opportunities to improve
oil recovery.

 

Our Singleton gas‑to‑wire project has been delayed due to protracted
regulatory approvals required and delays to the final connection to the grid.
All major plant items are installed onsite and we are working constructively
with the operator to complete the grid connection. We continue to target
commissioning in Q2 2026.

 

In 2026 we will continue to improve the profitability and resilience of the
oil and gas business, whilst also seeking to generate shareholder value from
our geothermal assets in the UK and Croatia. In parallel, we are actively
evaluating value‑accretive acquisition opportunities where our substantial
UK tax losses and allowances can be utilised to enhance after‑tax returns
and create shareholder value.

 

I believe that domestic onshore oil and gas continues to play an important
role in the UK's energy mix and energy security and note the increasing public
recognition of this, with both the Conservative and Reform Parties emphasising
the importance of oil and gas in the national energy balance.

 

I look forward to providing a fuller update in April when we release our
annual results.

 

 

For further information please contact:

 

 Star Energy Group plc

 Tel: +44 (0)20 7993 9899

 Ross Glover, Chief Executive Officer

 Frances Ward, Chief Financial Officer

 Zeus (Nominated Adviser & Broker)

 Tel: +44 (0)203 829 5000

 Antonio Bossi, Darshan Patel (Investment Banking)

 Simon Johnson (Corporate Broking)

 Vigo Consulting

 Tel: +44 (0)207 597 5970

 Patrick d'Ancona/Peter Jacob

 

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