Star Energy, a leading onshore hydrocarbon producer in the United Kingdom, delivering natural gas and crude oil to Britain’s energy market, has provided a trading update for the year to 31 December 2025.
The figures have not been audited and are subject to change.
Key highlights:
- Delivered material cost reduction: G&A savings of more than £2.0 million year-on-year, with further cost discipline continuing into 2026.
- Significantly reduced geothermal expenditure in 2025 (down c.£1.2 million versus 2024), while maintaining progress on the Company's highest value opportunities in our geothermal portfolio, such as projects in the Manchester and Southampton areas.
- Net production for 2025 averaged 1,886 boe/d; the Company anticipates production of c.2,000 boe/d in 2026, supported by a flexible capital programme focused on quick-return, cost-saving and resilience projects.
- Strong liquidity and active balance sheet management: cash at 31 December 2025 was £7.6 million (excluding restricted cash) and the Company had drawn £11.9 million (€13.6 million) under its loan facility; restricted cash of £4.5 million (€5.2 million) relates to performance bonds for Croatian licence commitments.
- Monetised non-core assets: completed the sale of non-core land, receiving proceeds of £6.3 million in H1 2025.
- Disciplined investment in the producing portfolio: £5.3 million invested in oil and gas assets in 2025, including £2.7 million on the Singleton gas-to-wire project and the remainder on production optimisation and plant upgrades. In addition, we are forecasting £1.4 million spend on abandonment activities.
- Maintaining flexibility in 2026 capex (currently forecast at c.£6.3 million), including £2.6 million to complete Singleton gas-to-wire (targeting Q2 2026 start-up; forecast production c.74 boe/d).
- Realised oil hedging gain of £1.2 million in 2025. The Company has continued its hedging programme in 2026, placing hedges to protect the downside given the forecast oversupply in the market.
- The Company made Energy Profits Levy payments of £1.7 million and £1.0 million based on taxable profits for the years ended 31 December 2024 and 31 December 2023, respectively.
- The Company continues to assess value-accretive acquisition opportunities where the Company's substantial UK tax losses and allowances can be utilised to enhance returns for shareholders.
Commenting today, Ross Glover, Chief Executive Officer, said:
'Our focus remains on deploying our capital as rigorously as possible combined with delivering a strong operational performance. Against the backdrop of significant volatility in oil prices during the year and a challenging operating environment we strengthened the resilience of the core oil and gas business, delivering material administrative cost savings of more than £2.0 million and maintaining effective downside protection through our hedging programme. We also materially reduced geothermal expenditure versus 2024. We maintain a low cost development platform, ready for investment when the right policy frameworks are put in place.
Cash generated from operations, alongside the £6.3 million proceeds from the Holybourne disposal in April 2025, supported continued investment in the asset base and reduction in net debt. These actions have helped underpin a meaningful re-rating in the Company's equity, with the share price increasing from 7.4p on 2 January 2025 to 9.5p on 31 December 2025 and standing at 13.5p as at 24 February 2026.
Production volumes in 2025 were below our expectations, driven by a number of discrete issues. At Gainsborough and Welton, unplanned National Grid power outages during summer infrastructure upgrades, together with a process pipeline failure, impacted output; the grid works are now complete, no shutdowns are scheduled for 2026 and the pipeline issue has been resolved. At Stockbridge, water disposal constraints reduced production and we are addressing this through conversion of a production well to a water injector, with production expected to be reinstated in Q3 2026. Across the portfolio we are working to minimise downtime and have a programme of work that will holistically assess, on a field by field basis, the opportunities to improve oil recovery.
Our Singleton gas-to-wire project has been delayed due to protracted regulatory approvals required and delays to the final connection to the grid. All major plant items are installed onsite and we are working constructively with the operator to complete the grid connection. We continue to target commissioning in Q2 2026.
In 2026 we will continue to improve the profitability and resilience of the oil and gas business, whilst also seeking to generate shareholder value from our geothermal assets in the UK and Croatia. In parallel, we are actively evaluating value-accretive acquisition opportunities where our substantial UK tax losses and allowances can be utilised to enhance after-tax returns and create shareholder value.
I believe that domestic onshore oil and gas continues to play an important role in the UK's energy mix and energy security and note the increasing public recognition of this, with both the Conservative and Reform Parties emphasising the importance of oil and gas in the national energy balance.
I look forward to providing a fuller update in April when we release our annual results.'
Source: Star Energy
