LONDON, UK: Star Energy has successfully acquired a 51% controlling stake in A14 Energy Limited, a notable player in the geothermal energy field. This acquisition aligns with Star Energy’s strategy to transform into a geothermal developer, owner, and operator, while also providing entry into the electricity generation sector.

A14 Energy, via its Croatian subsidiary IGeoPen, holds the exploration license for geothermal waters in the promising Pannonian Basin in Croatia. This region is rich in geothermal potential and falls within the European Union. The experienced IGeoPen team’s expertise in the Croatian energy sector further enhances Star Energy’s capabilities.

Geothermal energy is a pivotal component of the global energy transition due to its ability to provide consistent baseload electricity and heat generation. Star Energy, leveraging decades of sub-surface analysis, drilling experience, and environmental control from its UK oil and gas ventures, is poised to bring geothermal energy to Croatia’s well-established energy market.

The transaction details reveal that the acquisition was executed through Star Energy’s subsidiary, GT Energy Croatia Limited (GTEC), purchasing the interest in A14 Energy from Peninsula International Pte Ltd for €1.3 million in cash. Additional considerations include €0.1 million for guarantees to the Croatian Hydrocarbon Agency and €0.2 million for ongoing Ernestinovo license appraisal expenses.

Furthermore, GTEC has entered a strategic shareholders’ agreement with Peninsula to collaboratively develop, construct, and operate geothermal projects in Croatia. Joint bids submitted by GTEC and Peninsula, facilitated by IGeoPen, for geothermal licenses under the ongoing licensing round, are expected to yield results by December 2023. Successful bids could trigger payments of up to €1.5 million.

Financing for re-entering existing wells and drilling new appraisal wells, following license awards, will be supported by GTEC and Peninsula through shareholder loans and external funding. GTEC has agreed to fund Peninsula for up to €13.2 million over a five-year exploration license period, with repayments anticipated from generated cash flow.

Key highlights of this development include Croatia’s robust geothermal data from over 4,000 drilled wells and extensive seismic surveys covering the targeted regions. The geothermal gradient, measuring 60% higher than the European average, positions Croatia for efficient electricity generation and cross-EU trading. Additionally, the nation’s supportive government, well-established electricity market, and alluring market premium create a favorable environment for geothermal ventures.

This acquisition not only expands Star Energy’s reach into the geothermal sector but also brings onboard a team of esteemed geothermal and geological professionals. Notably, the Ernestinovo license comes with existing wells that, upon validation, could lead to a 20-year development license. With bids already submitted for promising license areas, facilitated by IGeoPen, Star Energy is poised to contribute significantly to Croatia’s sustainable energy landscape.

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