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.
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.