The UK onshore oil and gas company, Star Energy, has announced a new €25m loan.

In a statement today, the company (formerly IGas) said part of the loan would fund Star Energy’s geothermal plans. The rest would repay an outstanding balance on its loan from BMO, due at the end of June 2024, the company said.

Star Energy’s chief executive, Chris Hopkinson, described the new loan as “an important milestone”:

“It allows us to use cashflows from our existing oil and gas business to optimise near-term conventional production (with quick pay-backs) and deliver our transition strategy; namely developing and monetising our geothermal business in both the UK and Croatia.”

The loan is provided by the Austrian infrastructure finance company, Kommunalkredit.

Mr Hopkinson said:

“The size and structure of Kommunalkredit’s facility evidences their confidence in Star’s people and its transition strategy. Our ability to drawdown on this facility for our geothermal activities will allow this business to be positioned for longer term and sustained growth. It will also give us greater flexibility to continue to optimise the value of our entire asset portfolio, with short cycle returns.”

The statement said the Kommunalkredit facility matures on 31 December 2028.

The first part, to repay the outstanding US$7m balance on Star Energy’s reserves-based borrowing, has a fixed interest rate of 9.38% and is repayable on 30 June 2025.

The second part, funding geothermal development, has an interest rate of Euribore + 6% for five years. Repayments are scheduled to start from 31 December 2025.

DrillOrDrop has closed the comments section on this and future articles. We are doing this because of the risk of liability for copyright infringement in comments. We still want to hear about your reaction to DrillOrDrop articles. You can contact us by clicking here.