UK energy company Star Energy has acquired a 51 per cent stake in Croatian geothermal development company A14 Energy via its subsidiary GT Energy Croatia (GTEC).
A14 Energy owns, through its Croatian subsidiary IGeoPen, the Ernestinovo geothermal waters exploration licence in the Pannonian Basin in Croatia.
The transaction, finalised on 29 August, “further develops” Star Energy’s strategy to transition into a geothermal developer, owner and operator, diversifying regulatory risk and providing an entry into the electricity generation sector, the London Stock Exchange said via a press release.
Star Energy has an extensive background in sub-surface analysis, onshore drilling, well management and environmental control from its portfolio of oil and gas operations in the UK. “These skills and experience, coupled with those of the IGeoPen team, mean that Star Energy is well positioned to deliver geothermal energy in Croatia, a member of the European Union (EU), with a liberalised, well established and attractive energy market,” the London Stock Exchange noted in the press release.
The interest in A14 Energy has been acquired from Peninsula International Pte for a total cash consideration of 1.3 million euros. Additionally, Star Energy will pay 0.1 million euros in relation to the provision of cash-backed guarantees to the Croatian Hydrocarbon Agency, plus 0.2 million euros in back costs relating to the ongoing appraisal of the Ernestinovo licence.
In addition, GTEC has entered into a shareholders’ agreement with Peninsula International Pte in order to jointly develop and submit bids, and thereafter to own, construct and operate geothermal projects in Croatia.
GTEC and Peninsula International Pte, through IGeoPen, have jointly submitted three bids for geothermal licences to the Croatian Hydrocarbon Agency as part of the current licensing round and expect the results of the bids by December. A further aggregate amount of up to 1.5 million euros is payable upon the successful award of these licences.
The re-entry of an existing well on the Ernestinovo exploration licence and the drilling of any new appraisal wells, on the successful award of licences bid for in the current licensing round, will be financed by GTEC and Peninsula via shareholder loans and externally sourced finance. Additionally, GTEC has agreed to carry Peninsula for up to 13.2 million euros over the five-year exploration licence period.