Finance News Oil & Gas

Star Energy profits fall on lower oil prices

Lower oil prices, investment and taxes saw Star Energy Group plc half-year profits plummet and revenue fall from its onshore oil and gas operations.

Maximising: returns from conventional oil and gas business remains a key focus (stock photo)

EXPENSES

Results to 30 June 2023 showed the group, formerly IGas Energy, net production average rise to 2,071 boepd (H1 2022: 1,865 boepd), with the forecast unchanged at around 2,000 boepd for the full year.

Revenue totalled £23.8m (£30.5m) with adjusted EBITDA of £9.4m (£10.7m).

Profit after tax from continuing activities was £0.5m (£19.4m) from factors including lower prices and an increase in depreciation, depletion and amortisation to £3.3m (£2.7m) as a result of higher production.

Increased workover and maintenance activity resulted in operating costs rising to £12.3m (£10.8m).

The group also paid higher transportation costs for the higher volumes and inflationary rise in staff, materials and equipment costs.

A total of £3.3m was repaid on borrowings under the group’s RBL facility (£4.6m) and £400,000 in interest (£400,000).

Star Energy also paid £3.7m in tax (tax credit of £13.2m).

Cash and cash equivalents held were £1.5m (31 December 2022: £3.1m).

EXPERIENCE

Chief executive officer Chris Hopkinson said the company was working hard to reduce operating costs “in the face of general cost inflation and ever-increasing regulatory overburden”.

“Maximising returns from our conventional oil and gas business remains a key focus for us, given its free cash generation, particularly with improving commodity prices. 

“That, coupled with decades of experience of sub-surface analysis, onshore drilling, well management and environmental control from our portfolio will play a key role in our geothermal development.”

Star Energy aims to move into geothermal energy in the UK and with its recent acquisition in Croatia.