29 April 2026

Star Energy Group plc (AIM: STAR)

                                                                  ("Star Energy" or "the Company" or "the Group")                    

Full year results for the year ended 31 December 2025

Commenting today, Ross Glover, Chief Executive Officer, said:

"2025 was a year in which we remained firmly focused on balance sheet strength, disciplined capital allocation and cash generation. In a volatile market, our diversified portfolio, active hedging programme and tighter cost control helped underpin our financial resilience and reinforce the cash-generative nature of the business.

We have entered 2026 in a more uncertain geopolitical and commodity price environment, but our priorities remain clear: improve operational reliability, protect returns and invest selectively where the risk-adjusted economics are compelling. We believe our combination of domestic production, strong operational control and disciplined financial management differentiates Star Energy from many small-cap peers and underpins our ability to build a leaner, more resilient business focused on value creation for shareholders.

The sale of the Croatian geothermal business releases capital, removes future funding demands and allows us to sharpen our focus on our home market in the UK, where we have an outstanding operational track record and see the clearest opportunity to create value. We will continue to work to maximise cash flow from our oil and gas business, maintain a low-cost geothermal platform in the UK while awaiting a more investable policy framework and actively pursue value-accretive oil and gas acquisition opportunities that can bring value to our substantial tax losses. Together, these actions leave Star Energy well placed to seize opportunities and will drive sustainable shareholder value.

Financial Performance                                                                                                                                         

1 Adjusted EBITDA and Net Debt (borrowings less cash and cash equivalents excluding capitalised fees) are used by the Group, alongside IFRS measures for both internal performance analysis and to help shareholders, lenders and other users of the Annual Report to better understand the Group's performance in the year in comparison to previous years and to industry peers.

Corporate & Financial Highlights

·      Cash at 31 December 2025 was £7.6 million, excluding restricted cash, and Star Energy had drawn £11.9 million under its loan facility. In addition, the Company held restricted cash of £4.5 million which relates to the cash backing of performance bonds for licence commitments of the Company's Croatian subsidiary (IGeoPen d.o.o), relating to the Sječe and Pčelić exploration licences. The cash will be released on the completion of the recently announced sale of IGeoPen d.o.o

·      Completed the sale of non-core land for £6.3 million with proceeds received in April 2025

·      Delivered more than £2.0 million of G&A savings compared to 2024

·      Active hedging policy which generated a commodity hedging gain of £1.5 million in 2025. Hedges are in place for 2026 which satisfy the requirements under our finance facility and protect cashflow whilst allowing exposure to price increases. We have hedged 14% of production with swaps at an average price of $68/bbl and 40% with collars with an average ceiling price of $71/bbl

·      Energy Profits Levy of £2.85 million paid in 2025 based on the taxable profits for the years ended 31 December 2023 and 31 December 2024

 Operational Highlights

·      Net production averaged 1,886 boepd in 2025 (2024: 1,989 boe/d), with downtime driven by a number of discrete events, including a National Grid upgrade, which have now been resolved

·      Continued to optimise oil production from our existing wells through selective investment in short cycle developments which deliver quick payback

·      Singleton gas-to-wire project is well underway with delivery of incremental production of c.74 boe/d, significantly reducing flaring, monetising produced gas, increasing electricity generation and further decarbonising our operations

·      Savings achieved in operating costs to offset inflationary increases

Croatian geothermal

·      Agreement signed for the disposal of our three Croatian geothermal licences, releasing €5.2 million of restricted cash and enhancing financial flexibility. The consideration includes €1.5 million payable on completion (€1.3 million net to Star Energy in accordance with the A14 Energy Limited shareholder agreements), with a financial earn out of €0.5 million per licence on commencement of operations. The transaction delivers a clear strategic refocus of the Group's portfolio, allowing management to concentrate on its core UK oil and gas and geothermal assets. Completion is expected in H2 2026

Outlook

·      We anticipate net production of c.2,000 boepd and operating costs of c.$44/boe (assuming an average exchange rate of £1:$1.33) in 2026

·      2026 forecast capital expenditure is c.£6.6 million. This includes £2.6 million to complete the Singleton gas-to-wire project which is forecast to come online in H1 2026 with production of 74 boe/d. Star Energy also plans to invest £1.0 million on quick returning incremental projects and the balance on regulatory improvements, site resilience and projects to reduce operating costs going forward

·      G&A reductions carried into 2026 and targeting further savings

·      Low cost development platform maintained to advance our UK geothermal pipeline

Marie Dransfield, Technical Director of Star Energy Group plc, and a qualified person as defined in the Guidance Note for Mining, Oil and Gas Companies, June 2009 as updated 21 July 2019, of the London Stock Exchange, has reviewed and approved the technical information contained in this announcement. Mrs Dransfield has 20 years' oil and gas exploration and production experience.

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Chairman's statement

The year to which this report primarily relates is 2025, a period of sustained global volatility with oil prices trending downwards.  This has been significantly disrupted, this time with substantially higher oil and gas prices and with even more unpredictability immediately prior to the date of publication of this report.

Throughout, we have remained focused on maintaining balance sheet strength and disciplined cash management. This delivered positive results in 2025. Proceeds from the disposal of a non-core asset enabled us to reduce net debt, and we continue to allocate capital rigorously to areas with clear potential to create shareholder value.

Our diversified portfolio of assets delivers predictable production, and our oil hedging strategy has secured cashflows in a softer price environment, generating £1.2 million of realised gains in 2025. We started 2026 in an environment where market fundamentals were indicating significant oversupply and weaker commodity prices. However, the crisis in the Middle East is now causing a substantial supply side shock and escalating prices. What this means for oil prices in the mid to long-term is still unclear. We are continuing to monitor the situation closely and adapt our hedging programme as needed. We have made a significant contribution to the Government's EPL windfall tax in 2025, and expect to make further contributions in the future. Furthermore, the security of supply we can offer in the UK domestic market has a strategic value which we hope the government agencies will appreciate more fully in the period ahead.

We have also made meaningful progress in reducing our cost base despite the regulatory challenges associated with UK onshore operations. Our consistent production and robust cash generation differentiate us from many small cap UK energy companies focused primarily on exploration. This provides a stable platform for value-accretive growth and very strong operational expertise on which to build both organic opportunities and new assets in the future.

In geothermal, we see long term strategic potential in the UK; however, meaningful capital deployment will be contingent on a viable revenue framework and further government endorsement of the UK geothermal industry. We hope that geopolitical matters will not distract government agencies from actively moving forward with geothermal projects needing their timely encouragement. Until then, we remain focused on capital efficiency and generating value in those areas where we can control our destiny.

We are mindful of growing concerns that high energy costs are placing pressure on UK industry. While we cannot influence national policy, our plans reflect the existing regulatory landscape, and we welcome the prospect of a more supportive environment. Through locally-sourced, onshore oil production across multiple sites, we continue to contribute to UK energy.

The disposal of our Croatian geothermal licences allows clear strategic refocus of the Group's core UK oil and gas and geothermal assets. It strengthens the Group's balance sheet and reallocates capital away from a non-core international business.

Finally, our people remain central to the delivery of our strategy. Their expertise and resilience underpin the operational performance that drives long term shareholder value and I would like to take this opportunity to thank them on behalf of the Board.

Operating review

During 2025 we continued to execute our strategy of maximising cash generation from our UK onshore producing assets while building a low cost geothermal development platform. The year was characterised by disciplined capital allocation, a structural reduction in our cost base and targeted investment to improve operating reliability and resilience. We have been clear for some time that Star Energy must be run as a lean, cash‑generative business: safety and regulatory compliance first, then operational reliability, then value‑accretive growth where the risk‑adjusted returns justify it.

Against that backdrop, we delivered more than £2.0 million of year‑on‑year general and administrative expense (G&A) savings. These savings are structural, reflecting a simpler organisation and tighter control of discretionary spend. We also strengthened liquidity and maintained balance sheet flexibility, including the completion of a non‑core land sale which generated £6.3 million of proceeds in the first half of the year. We ended 2025 with £7.6 million of cash (excluding restricted cash) reflecting the strong focus on costs, capital discipline and liquidity management.

Operational delivery and production performance

Net production averaged 1,886 boe/d in 2025. This was lower than 2024 but was driven by a small number of discrete events rather than any deterioration in the underlying quality of the asset base. At Gainsborough and Welton, unplanned National Grid power outages during their summer infrastructure upgrades, together with a process pipeline failure, impacted output. The grid works are complete, no shutdowns are scheduled for 2026 and the pipeline issue has been resolved. At Stockbridge, water disposal constraints reduced production; we are addressing this through the conversion of a production well to a water injector.

We have used these events as a catalyst to further tighten operating discipline-improving maintenance planning, focusing on bottlenecks that drive downtime, and prioritising interventions with short payback. Looking forward, with the 2025 constraints addressed and a flexible programme of work, we have provided production guidance of approximately 2,000 boe/d for 2026.

Capital discipline and value‑focused investment

In a mature portfolio, value is created through reliability, low‑risk optimisation and selective investment. During 2025, we invested £5.3 million in our oil and gas assets, including £2.7 million on the Singleton gas‑to‑wire project, with the remainder focused on production optimisation and plant upgrades.

For 2026, we are forecasting capex  at c.£6.6 million, including £2.6 million to complete the Singleton gas‑to‑wire project. We are targeting a H1 2026 start‑up and  expect to deliver incremental production of c.74 boe/d, significantly reducing flaring, monetising produced gas, increasing electricity generation and further decarbonising our operations. We also forecast £1.4 million expenditure on abandonment activity, reflecting our commitment to responsibly manage end‑of‑life obligations. Across the portfolio, our approach remains consistent: invest where returns are compelling and measurable, maintain flexibility, and protect our balance sheet.

Geothermal: large opportunity, disciplined pacing in the UK

We continue to believe the UK presents a very material geothermal heat opportunity. Geothermal is domestic, long‑life, low‑carbon energy that can operate year‑round and can support the decarbonisation of industrial heat, public‑sector heat networks and emerging infrastructure demand. However, we have also been clear that investment must be paced to the reality of the current UK policy environment. We will maintain a low cost development platform, into which capital can be deployed when the policy framework is in place.

Our message to Government has been consistent. To unlock private capital at scale, the UK Government must do the following:

1. Consult on and implement a National Geothermal Strategy, including targets for geothermal energy development and use, aligned with NESO and heat network zoning policy.

2. Create and implement compelling non-financial and financial investment incentives for geothermal, including by making geothermal a focus for investment by GB Energy and the National Wealth Fund.

3. Dedicate additional cross-departmental policy-making resource and attention to geothermal - including by establishing formal structures within Government, involving industry experts, to develop policy recommendations.

In 2025, we reduced geothermal expenditure by c.£1.2 million compared to 2024, reflecting this disciplined approach while continuing to progress our highest‑value UK opportunities, including projects in the Manchester and Southampton areas.

Croatia

·      On 24 April 2026, we announced that we had signed an agreement for the sale of our three Croatian geothermal licences. The consideration for the sale includes €1.5 million payable on completion (€1.3 million net to Star Energy in accordance with the A14 Energy Limited shareholder agreements) and a financial earn out of €0.5 million per licence on commencement of operations. The sale releases €5.2 million of restricted cash and removes future capital commitments, strengthening our balance sheet and enhancing financial flexibility, while enabling value-accretive capital allocation. The transaction delivers a clear strategic refocus of the Group's portfolio, allowing management to concentrate on its core UK oil and gas and geothermal assets. Completion is expected in H2 2026.

Creating value beyond the base business

In addition to operational delivery, we remain focused on opportunities to enhance shareholder value through corporate actions. Star Energy has substantial UK tax losses, and we continue to evaluate value‑accretive acquisition opportunities where those losses can be utilised to improve after‑tax returns. We will be selective and will not compromise our balance sheet strength or management focus.

Outlook

Our priorities for 2026 are clear: deliver the full benefit of the cost reductions; improve operational reliability and pursue value‑accretive opportunities where they meet our return and risk criteria. Star Energy is becoming a leaner, more resilient business-well positioned to generate free cash flow from its producing assets and well positioned to bring value to our tax losses.

We continue to operate in a safe and environmentally sensitive manner, which is a fundamental principle guiding all our activities and decisions. Our focus on maximising profitability from our oil and gas activities is crucial for long-term sustainability and enables us to successfully navigate a volatile oil price environment. We are advancing our UK geothermal energy development platform to take advantage of the government's renewable energy aspirations, proceeding cautiously until a clearer investment framework is established.

Financial Review

Our focus in 2025 has been on managing our commodity price exposure, reducing our costs and continuing to improve the resilience of our business.

Production for the year averaged 1,886 boepd (2024: 1,989 boepd). Brent oil prices remained volatile as a result of the geopolitical climate and uncertain global economic outlook.  Brent prices  declined from an average of  $81/bbl in 2024 to an average of $69/bbl in 2025, with prices falling to the low $60s in Q4 2025. Sterling strengthened during the year with average GBP/USD rates of £1:$1.32 in 2025 compared to £1:$1.28 in 2024, negatively impacting our revenues which are mainly denominated in USD. Our realised price, post hedge was $68.5/bbl (2024: $77.5/bbl).

Revenues for the year were £34.7 million compared to £43.7 million in 2024, a reduction of £9.0 million reflecting lower commodity prices, foreign exchange movements and lower volumes. We mitigated the impacts of this through our hedging policy, generating a net oil price hedging gain of £1.5 million and a hedging gain on foreign exchange of £0.3 million. We also made savings of £4.5 million on operating costs, administrative expenses and geothermal research and development expenditure compared to 2024.

Other cost of sales decreased from £22.3 million in 2024 to £21.6 million in 2025 as reductions from cost savings  more than offset inflationary increases. Underlying operating costs (which exclude third party oil but include costs relating to leases capitalised under IFRS 16) were £33.7 ($44.2) per boe for the year (2024: £32.8 ($42.0) per boe).

Adjusted EBITDA was £7.7 million (2024: £11.1 million) and the underlying operating profit was £1.7 million (2024: £5.9 million), with the variance resulting primarily from a reduction in revenues, offset by hedging gains and cost savings.

* Includes depreciation charge recorded in administrative expenses

Restricted cash was £4.5 million (€5.2 million) (2024: £4.3 million (€5.2 million)) which provides cash backing for the performance guarantees issued in relation to geothermal licence commitments in Croatia.

Income Statement

The Group recognised revenues of £34.7 million for the year (2024: £43.7 million). Oil revenue was £33.5 million compared to £42.0 million in 2024, reflecting lower prices and volumes and a stronger USD to GBP exchange rate. The average pre-hedge realised price for the year was $66.1/bbl (2024: $76.9/bbl). Electricity revenues increased from £0.6 million in 2024 to £0.9 million in 2025 due to higher prices and volumes. Gas revenues reduced to £nil (2024: £ 0.2 million) due to the permanent shut-in of gas-to-grid production at our Albury site. Revenues relating to the sale of third party oil was £0.3 million (2024: £0.3 million).

Cost of sales for the year were £28.9 million (2024: £28.8 million) including Depletion, Depreciation and Amortisation ( DD&A) of £7.3 million (2024: £6.5 million), and other costs of sales of £21.6 million (2024: £22.3 million). Other costs of sales decreased by £0.7 million compared to 2024 mainly due to lower production in the year and reduction in staff costs and other cost savings generated in a number of areas, partially offset by impact of additional workover activity in the year and inflationary increases.

Adjusted EBITDA was £7.7 million (2024: £11.1 million) and gross profit was £5.8 million for the year (2024: £14.9 million). 

Administrative costs reduced significantly from £7.4 million in 2024 to £4.9 million in 2025. This reduction primarily resulted from the cost cutting initiatives taken by management with the lower cost base now continuing into the future.

We also reduced research and non-capitalised development costs relating to our geothermal activities from £2.0 million in 2024 to £0.7 million in 2025 as we limit our expenditure to where we can see a clear line of sight to value creation. This included £0.2 million (2024: £1.6 million) for our projects in Croatia and £0.5 million (2024: £0.4 million) on our UK geothermal business which includes expenditure on the NHS Trust geothermal projects, net of any grants received.

Profit on sale of property, plant and equipment of £4.5 million (2024: £nil million) arose mainly from the sale of our Holybourne site which was completed in April 2025. We incurred a cost of £2.0 million in 2024 in connection with preparing the Holybourne site for sale which was presented as an "other expense" in our 2024 income statement.

No significant write off of exploration and evaluation assets was recorded in the year (2024: write off of £1.9 million mainly relating to costs incurred on PEDL 235 (Godley Bridge) where we decided not to renew that licence).

Impairments of both development costs and goodwill of £0.5 million each were recorded in the year in relation to the Group's geothermal operations in Croatia (2024: impairment of £4.3 million of development costs relating to the Stoke-on-Trent geothermal project). The impairment charge was based on the recoverable amount for the Group's three Croatian licences determined with reference to their potential sale value.

We recognised a gain of £0.5 million from the release of the contingent consideration liability relating to the acquisition of GT Energy UK Limited (2024: £2.3 million) as the related milestones were not achieved.

Net finance costs were £4.9 million (2024: £4.8 million) including interest and fees on borrowings of £1.3 million (2024: £1.1 million) and performance guarantee costs related to licence commitments in Croatia of £0.1 million (2024: £0.4 million). Finance costs also included the unwinding of discount on decommissioning provision of £2.7 million (2024: £2.5 million), an interest charge on lease liabilities of £0.7 million (2024: £0.7 million) and net foreign exchange losses during the year of £0.4 million (2024: £0.1 million).

A non-cash deferred tax charge of £10.5 million (2024: £6.2 million) was recognised during the year, due to a reduction in the deferred tax asset arising as a result of an increase in unrecognised future deductible temporary differences and the extension of the Energy Profits Levy (EPL) to 2030. This impact was partially offset by a current tax credit of £1.5 million (2024: current tax charge of £2.0 million) mainly relating to the EPL.

Cash Flow

Net cash generated from operating activities for the year was £6.3 million (2024: £2.3 million). The increase was primarily due to a reduction in cash outflows from operating costs, administrative expenses and research and non-capitalised development costs of £12.9 million, a reduction in abandonment spend of £1.1 million and an increase in cash inflows from realised derivatives of £1.2 million, partially offset by a reduction in cash inflows from revenue of £8.3 million and a tax payment during the year of £2.8 million.

The Group invested £5.3 million across its asset base during the year (2024: £5.7 million) primarily comprising of spend on the Singleton gas-to-wire decarbonisation project, an oil plant upgrade at Bletchingley, optimisation projects across our portfolio to offset declines and general improvements across our fields. The Group received £6.3 million from the sale of the Holybourne site during the year.

The Group made a repayment of £5.6 million (€6.7 million) (2024: drawdown of £ 5.7 million (€6.7 million)) to fully settle facility A of its loan facility with Kommunalkredit Austria AG in line with its contractual maturity date. The Group also made a drawdown of £4.8 million (€5.5 million) (2024: £6.8 million (€8.1 million)) under facility B to fund geothermal activity in both the UK and Croatia as well as the Singleton gas-to-wire decarbonisation project. The amount drawn under Facility B at 31 December 2025 was £11.9 million (€13.6 million) and net debt was £4.3 million (2024: £7.5 million). The drawdown period under the facility ended in December 2025, with the balance drawn being repayable in equal bi-annual instalments commencing on 30 June 2026 and ending on 31 December 2028. In addition, the Group held £4.5 million (€5.2 million) (2024: £4.3 million (€5.2 million)) of restricted cash in relation to the Croatian performance bonds.

Interest paid during the year was £1.1 million (2024: £0.5 million) and repayments made in respect of lease obligations were £1.3 million (2024: £0.9 million).

Balance Sheet

Net assets reduced by £7.8 million to £34.8 million at 31 December 2025 (2024: £42.6 million).

Property, plant and equipment reduced by £1.1 million during the year to £69.6 million. Additions in the year were £5.8 million and the value of decommissioning assets increased by  £1.0 million as a result of reassessment of the decommissioning provision. The net book value of disposals was £1.8 million and we recognised a DD&A charge of £6.1 million. Intangible assets reduced by £0.6 million during the year to £7.1 million primarily due to an impairment of goodwill and development costs relating to our Croatian geothermal assets of £1.0 million, partially offset by additions of £0.2 million and foreign exchange differences of £0.2 million.

The provision for decommissioning costs increased by £3.2 million (2024: reduction of £1.5 million) mainly as a result of the annual unwinding of the discount on provision (£2.7 million) and reassessment of the provision, primarily arising from refreshing the base costs (£1.0 million), partially offset by expenditure in the year of £0.4 million. The provision for contingent consideration relating to the acquisition of GT Energy UK Limited of £0.5 million was released during the year following expiry of the deadline for achievement of the relevant milestones. 

Net debt reduced to £4.3 million (2024: £7.5 million). Cash and cash equivalents increased by £2.9 million, reflecting stronger cash inflows from operating and investing activities. Borrowings (nominal value excluding capitalised expenses) reduced by £0.3 million mainly due to loan repayments on Facility A of £5.6 million exceeding drawdowns of £4.8 million under Facility B, with the remainder of the difference relating to foreign exchange impacts.

Trade and other payables of £6.7 million were consistent with the balance at the end of the previous year. Trade and other receivables reduced by £1.5 million mainly as a result of a decline in revenues and the settlement of the loan note receivable of £0.4 million.

The deferred tax asset reduced by £10.5 million from £31.1 million at 31 December 2024 to £20.6 million at 31 December 2025 for reasons mentioned above. The current tax balance was a receivable of £1.3 million (2024: payable of £3.1 million) as a result of tax paid in the year of £2.8 million and a current tax credit of £1.5 million mainly relating to the EPL.

The derivative asset of £0.7 million (2024: £0.4 million) represents the fair values of the open commodity price hedges.

Going Concern

The Group continues to closely monitor and manage its liquidity risks. Cash flow forecasts for the Group are prepared on a monthly basis based on, inter alia, the Group's production and expenditure forecasts, management's best estimate of future oil prices and foreign exchange rates and the Group's available loan facility. Sensitivities are run to reflect different scenarios including, but not limited to, possible reductions in commodity prices, fluctuations in exchange rates and reductions in forecast oil production rates.

The current geopolitical climate and the impact of the war in Iran has resulted in significant increases in crude oil price forecasts for 2026. However, the commodity price environment is volatile, with significant uncertainty on the resolution of the conflict in the Middle East and the impact on the global oil market and oil prices.

The focus of the Group in 2025 has been to strengthen our balance sheet and improve our resilience to oil price volatility. We have generated positive operating cashflows in 2025, benefitting from ongoing efforts to minimise operating costs. We have also materially reduced our general and administrative costs, with these savings expected to continue in future periods. The sale of a non-core land with the proceeds of £6.3 million being received in April 2025 has further improved our liquidity position.

However, the ability of the Group to operate as a going concern is dependent upon the continued availability of future cash flows and the availability of the monies drawn under its loan facility, which is dependent on the Group not breaching the facility's covenants. To mitigate these risks, the Group benefits from its hedging policy with 36,400 barrels hedged for April to December 2026 using swaps at a price of $68/bbl and 256,800 barrels hedged with a three-way put/call options to provide downside protection.

The Group's base case cash flow forecast was run with average oil prices of $87/bbl for Q2 2026, $80/bbl in Q3 2026, and $75/bbl in Q4 2026, with prices falling to an average price of $73/bbl in 2027. Foreign exchange rates of an average $1.33/£1 for the remainder of 2026 and $1.30/£1 for 2027 have been assumed. In this base case scenario, our forecasts show that the Group will have sufficient financial headroom to meet the applicable financial covenants for the 12 months from the date of approval of the financial statements.

Management has also prepared a "severe but plausible" downside case, which reflects the possible impact of global economic and political uncertainties resulting in the oil price falling lower than in our base case. In this downside case we have assumed an oil price of $82/bbl for Q2 2026, $75/bbl in Q3 2026, and $70/bbl in Q4 2026, with prices falling to an average price of $68/bbl in 2027. Foreign exchange rates of an average $1.35/£1 for the remainder of 2026 and $1.32/£1 for 2027 have been assumed. Our downside case also included a reduction in production of 5% throughout the going concern period. In the event of a downside scenario, management would take mitigating actions including reducing costs, in order to remain within the Group's financial covenants over the remaining facility period, should such actions be necessary. All such mitigating actions are within management's control. In this downside scenario including mitigating actions, our forecast shows that the Group will have sufficient financial headroom to meet its financial covenants for the 12 months from the date of approval of the financial statements. Management remain focused on maintaining a strong balance sheet and funding to support our strategy.

Based on the analysis above, the Directors have a reasonable expectation that the Group has adequate resources to continue as a going concern for at least the next twelve months from the date of the approval of the Group financial statements and have concluded it is appropriate to adopt the going concern basis of accounting in the preparation of the financial statements.

Frances Ward

Chief Financial Officer

Non-IFRS Measures

The Group uses non-IFRS measures of performance that are not specifically defined under IFRS or other generally accepted accounting principles. The non-IFRS measures include net debt, adjusted EBITDA and underlying operating profit.

These non-IFRS measures are used by the Group, alongside IFRS measures, for both internal performance analysis and to help shareholders, lenders and other users of the Annual Report to better understand the Group's performance in the year in comparison to previous years and to industry peers.

Net debt is defined as borrowings excluding capitalised fees less cash and cash equivalents and does not include the Group's lease liabilities or restricted cash.

Adjusted EBITDA and underlying operating profit includes adjustments in relation to non-cash items such as share-based payment charges and unrealised gain/ loss on hedges.

Lease costs for the year which have been capitalised under IFRS 16 have been added to underlying operating costs and deducted in the calculation of adjusted EBITDA.

CONSOLIDATED INCOME STATEMENT

FOR THE YEAR ENDED 31 DECEMBER 2025

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 2025

CONSOLIDATED BALANCE SHEET

AS AT 31 DECEMBER 2025

These financial statements on pages were approved and authorised for issue by the Board on 29 April 2026 and are signed on its behalf by:

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2025

*     The foreign currency translation reserve includes an amount of £3,799,000 (2024: £3,799,000) relating to exchange gains and losses on translation of net assets and results, and intercompany balances, which formed part of the net investment of the Group, in respect of subsidiaries which previously operated with a functional currency other than UK pound sterling.

**   Other reserves include: 1) Share plan reserves comprising a EIP/MRP/EDRP reserve representing the cost of share options issued under the long term incentive plans and share incentive plan reserve representing the cost of the partnership and matching shares; 2) a treasury shares reserve which represents the cost of shares in Star Energy Group plc purchased in the market to satisfy awards held under the Group incentive plans; 3) a capital contribution reserve which arose following the acquisition of IGas Exploration UK Limited; and 4) a merger reserve which arose on the reverse acquisition of Island Gas Limited.

CONSOLIDATED CASH FLOW STATEMENT

FOR THE YEAR ENDED 31 DECEMBER 2025

CONSOLIDATED FINANCIAL STATEMENTS - NOTES

FOR THE YEAR ENDED 31 DECEMBER 2025

1 Material accounting policies

(a) Basis of preparation of financial statements

Whilst the financial information in this preliminary announcement has been prepared in accordance with international accounting standards (IFRS) in conformity with the requirements of the Companies Act 2006 ("the "Standards"), this announcement does not contain sufficient information to comply with the Standards. The Group will publish full financial statements that comply with the Standards in May 2026.

The financial information for the year ended 31 December 2025 does not constitute statutory financial statements as defined in sections 435 (1) and (2) of the Companies Act 2006. Statutory financial statements for the year ended 31 December 2024 have been delivered to the Registrar of Companies and those for 2025 will be delivered following the Company's annual general meeting. The auditor has reported on the 2025 financial statements and their report was unqualified. The report did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.

The accounting policies applied are consistent with those adopted and disclosed in the Group's financial statements for the year ended 31 December 2024. There has been an amendment to an accounting standard issued by the International Accounting Standards Board which was applicable from 1 January 2025.  This did not have a material impact on the accounting policies, methods of computation or presentation applied by the Group.

There are also new accounting standards and certain amendments to existing accounting standards issued by the International Accounting Standards Board which will be applicable from either 1 January 2026 or from periods subsequent to that date.  These have not been adopted early and are not expected to have a material impact on the accounting policies, methods of computation or presentation applied by the Group other than IFRS 18 Presentation and Disclosures in Financial Statements which was issued on 9 April 2024, effective for periods beginning on or after 1 January 2027. We are in the process of assessing the impact of this standard on our future financial statements.

Further details on new International Financial Reporting Standards adopted and yet to be adopted will be disclosed in the 2025 Annual Report and Financial Statements.

Star Energy Group plc, which is the ultimate Parent Company of the Group, is a public limited company incorporated in the United Kingdom and registered in England and Wales and is listed on the Alternative Investment Market ("AIM"). The Group's principal activities are exploring for, appraising, developing and producing oil and gas and developing geothermal projects. The address of the registered office of the Parent Company is Welton Gathering Centre, Barfield Lane Off Wragby Road, Sudbrooke, Lincoln, England LN2 2QX.

The financial information is presented in UK pounds sterling and all values are rounded to the nearest thousand (£000) except when otherwise indicated.

Prior year numbers have been reclassified, where necessary, to conform to the current year presentation.

(b) Going concern

The Group continues to closely monitor and manage its liquidity risks. Cash flow forecasts for the Group are prepared on a monthly basis based on, inter alia, the Group's production and expenditure forecasts, management's best estimate of future oil prices and foreign exchange rates and the Group's available loan facility. Sensitivities are run to reflect different scenarios including, but not limited to, possible reductions in commodity prices, fluctuations in exchange rates and reductions in forecast oil production rates.

The current geopolitical climate and the impact of the war in Iran has resulted in significant increases in crude oil price forecasts for 2026. However, the commodity price environment is volatile, with significant uncertainty on the resolution of the conflict in the Middle East and the impact on the global oil market and oil prices.

The focus of the Group in 2025 has been to strengthen our balance sheet and improve our resilience to oil price volatility. We have generated positive operating cashflows in 2025, benefitting from ongoing efforts to minimise operating costs. We have also materially reduced our general and administrative costs, with these savings expected to continue in future periods. The sale of a non-core land with the proceeds of £6.3 million being received in April 2025 has further improved our liquidity position.

However, the ability of the Group to operate as a going concern is dependent upon the continued availability of future cash flows and the availability of the monies drawn under its loan facility, which is dependent on the Group not breaching the facility's covenants. To mitigate these risks, the Group benefits from its hedging policy with 36,400 barrels hedged for April to December 2026 using swaps at a price of $68/bbl and 256,800 barrels hedged with a three-way put/call options to provide downside protection.

The Group's base case cash flow forecast was run with average oil prices of $87/bbl for Q2 2026, $80/bbl in Q3 2026, and $75/bbl in Q4 2026, with prices falling to an average price of $73/bbl in 2027. Foreign exchange rates of an average $1.33/£1 for the remainder of 2026 and $1.30/£1 for 2027 have been assumed. In this base case scenario, our forecasts show that the Group will have sufficient financial headroom to meet the applicable financial covenants for the 12 months from the date of approval of the financial statements.

Management has also prepared a "severe but plausible" downside case, which reflects the possible impact of global economic and political uncertainties resulting in the oil price falling lower than in our base case. In this downside case we have assumed an oil price of $82/bbl for Q2 2026, $75/bbl in Q3 2026, and $70/bbl in Q4 2026, with prices falling to an average price of $68/bbl in 2027. Foreign exchange rates of an average $1.35/£1 for the remainder of 2026 and $1.32/£1 for 2027 have been assumed. Our downside case also included a reduction in production of 5% throughout the going concern period. In the event of a downside scenario, management would take mitigating actions including reducing costs, in order to remain within the Group's financial covenants over the remaining facility period, should such actions be necessary. All such mitigating actions are within management's control. In this downside scenario including mitigating actions, our forecast shows that the Group will have sufficient financial headroom to meet its financial covenants for the 12 months from the date of approval of the financial statements. Management remain focused on maintaining a strong balance sheet and funding to support our strategy.

Based on the analysis above, the Directors have a reasonable expectation that the Group has adequate resources to continue as a going concern for at least the next twelve months from the date of the approval of the Group financial statements and have concluded it is appropriate to adopt the going concern basis of accounting in the preparation of the financial statements.

2 Revenue

The Group derives revenue solely within the United Kingdom from the transfer of control over the goods and services to external customers, which is recognised at a point in time when the performance obligation has been satisfied by the transfer of goods. The Group's major product lines are:

Revenues of approximately £17.5 million and £16.3 million were derived from the Group's two largest customers (2024: £21.6 million and £21.2 million) and are attributed to the oil sales.

As at 31 December 2025, there are no contract assets or contract liabilities outstanding (2024: £nil).

4 Income tax

(ii) Factors affecting the tax charge

The majority of the Group's profits are generated by "ring-fence" businesses which attract UK corporation tax and supplementary charges at a combined average rate of 40% (2024: 40%), in addition to the Energy Profits Levy (EPL) with an average rate of 38% for the year (2024: 36%).

A reconciliation of the UK statutory corporation tax rate (applicable to oil and gas companies) applied to the Group's profit/(loss) before tax to the Group's total tax charge is as follows:

* Expense not allowable for tax purposes includes the deferred tax impact arising from the change in estimate of taxable temporary differences expected to realise whilst the EPL regime is in effect. On 3 March 2025, an

extension to the EPL regime to 31 March 2030 was substantively enacted, resulting in a deferred tax charge of £0.8 million.

** Amounts not allowable for supplementary charge purposes relate to net financing costs disallowed for supplementary charge offset by investment allowance, which is deductible against profits subject to supplementary charge.

(iii) Deferred tax

The movement on the deferred tax asset in the year is shown below:

The following is an analysis of the deferred tax asset by category of temporary difference:

(iv) Corporation tax receivable/(payable)

The movement on the corporation tax receivable/(payable) in the year is shown below:

(v) Tax losses and other similar attributes

The Group has gross total tax losses and similar attributes carried forward of £370.7 million (2024: £367.8 million). Deferred tax assets have been recognised in respect of tax losses and other deductible temporary differences where the Directors believe it is probable that these assets will be recovered based on a five-year profit forecast or to the extent that there is offsetting deferred tax liabilities. Such recognised tax losses include £89.5 million (2024: £85.0 million) of ringfence corporation tax losses which will be recovered at 30% of future taxable profits, £69.3 million (2024: £70.2 million) of supplementary charge tax losses which will be recovered at 10% of future taxable profits, £2.2 million (2024: £4.1 million) of losses arising under the EPL regime which will be recovered at 38% of future taxable profits and £1.1 million (2024: £3.1 million) of non-ringfence corporation tax losses which will be recovered at 25% of future taxable profits. In addition, the Group recognises £28.3 million (2024: £23.1 million) of activated investment allowance, which will be recovered at 10% of future taxable profits.

The Group does not recognise £169.6 million (2024: £164.2 million) ringfence corporation tax losses, £102.7 million (2024: £95.6 million) of supplementary charge tax losses, £102.5 million (2024: £106.7 million) of non-ringfence corporation tax losses in the UK and £5.9 million (2024: £4.7 million) of tax losses outside of the UK, due to insufficient forecast future taxable profits or offsetting deferred tax liabilities. Additionally, the Group does not recognise £7.7 million (2024: £7.7 million) of investment allowance and £45.2 million (2024: £16.4 million) of future deductible temporary differences (which would create a deduction at 40% of future taxable profits) relating to our decommissioning provision for the same reasons. The losses of the Group, other than those arising outside of the UK, can be carried forward indefinitely.

5 Earnings per share (EPS)

Basic EPS amounts are based on the loss for the year after taxation attributable to the ordinary equity holders of the Parent Company of £7.3 million (2024: £11.3 million) and the weighted average number of ordinary shares outstanding during the year of 130.7 million (2024: 129.3 million).

Diluted EPS amounts are based on the loss for the year after taxation attributable to the ordinary equity holders of the Parent Company and the weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would be issued on the conversion of all the potentially dilutive ordinary shares into ordinary shares, except where these are anti-dilutive.

As at 31 December 2025, there are 5.5 million potentially dilutive share options (31 December 2024: 6.0 million potentially dilutive share options) which were not included in the calculation of diluted earnings per share as their conversion to ordinary shares would have decreased the loss per share.

The following reflects the income and share data used in the basic and diluted earnings per share:

6 Intangible assets

Exploration and evaluation assets

Exploration costs impaired in the financial year to 31 December 2025 were £0.03 million (2024: £1.9 million) which were costs of early-stage projects relating to our conventional assets where it was assessed that there was no further development prospect.

The 2024 exploration costs impaired were substantially all related to the capitalised exploration costs at PEDL 235.

The remaining £4.1 million (2024: £4.0 million) of capitalised exploration expenditure relates to our conventional assets including PL 240. Management has assessed the remaining capitalised exploration expenditure for indications of impairment under IFRS 6 Exploration for and Evaluation of Mineral Resources and did not identify any factors indicating a need to perform detailed impairment testing.

Goodwill

The carrying value of goodwill relates to the acquisition of an interest in A14 Energy Limited during 2023. The Group has identified four Cash Generating Units (CGUs) within our geothermal business, whereby technical, economic and/or contractual features create underlying interdependence in the cash flows. These CGUs correspond to the three Croatian geothermal licences (Ernestinovo, Sječe and Pčelić) and the UK geothermal business.  The carrying amount of goodwill has been allocated to the following CGUs: 

The Group reviewed the carrying value of the Sječe licence and Pčelić licence CGUs at 31 December 2025 and assessed them for impairment. The recoverable amount for these CGUs was based on their fair value less costs of disposal which was calculated by reference to a potential sale value for these licences. Key assumptions included determination of the amount of any expected sale consideration, timing of related cash flows and the discount rate to be used to determine the present value of such cash flows. The recoverable amount was materially consistent with the carrying values of these CGUs, hence no impairment charge was recognised against allocated goodwill during the year.

The Group also reviewed the carrying value of the Ernestinovo licence CGU (which includes goodwill, capitalised development costs referred to below and any associated deferred tax liability and decommissioning provision) at 31 December 2025, using the same basis for the determination of recoverable amount as explained above. The recoverable amount for the Ernestinovo licence CGU was estimated at £1.2 million thereby resulting in an impairment charge of £0.9 million (2024: £nil). In line with the requirements of the financial reporting standards, the impairment charge was first allocated to fully write off the related goodwill, with the residual amount allocated against capitalised development costs.

Development costs

Development costs relate to assets acquired as part of the GT Energy acquisition in 2020, and assets acquired relating to the Ernestinovo licence as part of the A14 Energy acquisition in 2023.

The carrying amount of development costs is split between CGUs as follows:

Development costs relating to UK Geothermal business

These costs relate to the design and development of a deep geothermal heat project in Manchester, United Kingdom. Previously, this CGU also included costs of £4.3 million related to a project at Etruria Valley, Stoke-on-Trent which was written off in 2024 recognising that the project could not progress in its original form.

Development costs relating to Ernestinovo licence

The development costs associated with Ernestinovo licence relate to the fair value of assets acquired as part of the A14 Energy acquisition made in 2023. The costs relate to the value of the licence award and work performed up to the acquisition date in progressing with the re-entry of an existing well on the licence. An impairment charge of £0.5 million (2024: £nil) was recorded against capitalised development costs relating to the Ernestinovo licence as described above.   

7 Property, plant and equipment

*The decommissioning asset increased in line with the decommissioning liability following a review of the estimate at 31 December 2025 (note 10).

Capital expenditure incurred during the year mostly related to the Singleton gas-to-wire project, an oil plant upgrade at Bletchingley and a number of projects carried out to generate near-time production and to offset field declines by upgrading existing facilities and systems and optimising production at a number of sites.

Impairment of oil and gas assets

Year ended 31 December 2025

Cash Generating Units (CGUs) for impairment purposes are the group of fields whereby technical, economic and/or contractual features create underlying interdependence in the cash flows. The Group has identified the three main producing CGUs as: North, South, and Scotland. At each balance sheet date, the Group assesses its CGUs for impairment whenever events or changes in circumstances indicate that the carrying amount of the CGU may not be recoverable. If any such indication exists, the Group makes an estimate of the asset's recoverable amount. An impairment assessment was performed for all three CGUs at the balance sheet date as a result of identification of impairment indicators, mainly a reduction in oil price forward curve and changes to the Energy Profits Levy regime in the period. An impairment indicator was noted for the Scotland CGU given the delay in finalisation of the sale of the underlying site.

The recoverable amounts of the North and South CGUs have been estimated by assessing the fair value less costs of disposal using a discounted cash flow methodology. The recoverable amount of the Scotland CGU has been estimated by assessing the fair value less costs of disposal with respect to a potential sale of the site.

The future cash flows in the discounted cash flow models for the North and South CGUs were estimated using the following key assumptions:

·      Group's estimate of proved plus probable reserves at the balance sheet date

·      Oil price (Brent): $60-$70/bbl for the years 2026-2028 and $75/bbl thereafter

·      USD/GBP foreign exchange rate: Range of $1.32:£1.00 - $1.30:£1.00

·      Post-tax discount rate: 10.3%

Outcome of impairment reviews:

The 31 December 2025 impairment assessment resulted in a recoverable amount greater than the carrying amount by £5.3 million in the South CGU (recoverable amount of £28.3 million) and £0.4 million in the North CGU (recoverable amount of £27.0 million). At the Scotland CGU, no impairment charge was recognised, with the recoverable amount assessed to be materially consistent with the carrying value of the CGU of £0.2 million (which includes the carrying value of the associated decommissioning liability).

Sensitivity of changes in assumption:

The principal assumptions in the discounted cashflow methodology are future production, estimated Brent prices, the USD/GBP long-term foreign exchange rate, and the discount rate. The impact on the recoverable amount that would result from changes to the key assumptions which management believe are reasonably possible in the prevailing macroeconomic environment at 31 December 2025 are shown below:

The sensitivity analysis above does not take into account any mitigating actions available to management should these changes occur, such as implementing cost savings and other process efficiencies.

No impairment charge has been recognised for the North, South or Scotland CGUs.

Year ended 31 December 2024

At 31 December 2024, an impairment assessment was performed for the North, South and Scotland CGUs as a result of the identification of impairment indicators, mainly a downward revision in the reserve estimates and changes to the Energy Profits Levy regime in that year. An impairment indicator was noted for the Scotland CGU given the delay in the finalisation of the potential sale of the underlying site.

The recoverable amounts of the North and South CGUs were estimated by assessing the fair value less costs of disposal using a discounted cash flow methodology. The recoverable amount of the Scotland CGU was estimated by assessing the fair value less costs of disposal with respect to a potential sale of the site.

The future cash flows in the discounted cash flow models for the North and South CGUs were estimated using the following key assumptions:

·      Group's estimate of proved plus probable reserves at the balance sheet date

·      Oil price (Brent): $75-$70/bbl for the years 2025-2029 and $75/bbl thereafter

·      USD/GBP foreign exchange rate: Range of $1.25:£1.00 - $1.30:£1.00

·      Post-tax discount rate: 9.9%

Outcome of impairment reviews:

The 31 December 2024 impairment assessment resulted in a recoverable amount greater than the carrying amount by £5.8 million in the South CGU (recoverable amount of £35.1 million) and £1.9 million in the North CGU (recoverable amount of £33.1 million). At the Scotland CGU, no impairment charge was recognised, with the recoverable amount of £0.5 million assessed to approximate the carrying value of the CGU (which includes the carrying value of the associated decommissioning liability).

8 Cash and cash equivalents

Cash and cash equivalents do not include restricted cash. 

Restricted cash

Restricted cash represents amounts held in a deposit account with a commercial bank as collateral in support of performance guarantees issued by Tokio Marine Europe S.A. (an insurance company) for licence commitments relating to the Sječe and Pčelić exploration licences. The deposit is subject to restrictions during the tenure of the related performance guarantees and hence not available for general use of the Group.

Net debt reconciliation

9 Borrowings

The carrying amounts of each of the Group's financial liabilities included within borrowings are considered to be a reasonable approximation of their fair value.

On 9 April 2024, the Group secured a €25.0 million finance facility with Kommunalkredit Austria AG (Kommunalkredit) comprising of a facility A to fund the repayment of the outstanding balance on the previous reserves based loan (RBL) facility and a facility B to provide funding for the Group's geothermal development activities . Facility A carried a fixed interest rate of 9.4% and was fully repaid on 30 June 2025 in line with its contractual maturity. Facility B carries an interest rate of Euribor + 6%. Following an amendment in July 2025 the drawdown period was extended to 31 December 2025, and the drawn balance is repayable in 6 equal half-yearly instalments commencing from 30 June 2026.

The Group is subject to the following financial covenants under the facility agreement, to be calculated and tested for compliance at 30 June and 31 December for each year of the agreement, in addition to when drawdowns are made, or as otherwise required by the facility agreement:

·      Loan Life Cover Ratio ("LLCR") of greater than or equal to 1.25:1.

·      Net Debt to Earnings before Interest, Tax, Depreciation, Amortisation, and Exceptional items ("EBITDAX") ratio of less than or equal to 2.00:1.

·      Current ratio of the Group as defined in the facility agreement of greater than or equal to 1.00:1.

·      Debt Service Cover Ratio ("DSCR") of greater than or equal to 1.10:1, for both projected and historic figures. 

·      Proved and developed reserves value to Net Debt ratio of greater than or equal to 2.50:1.

The Group complied with all the covenants applicable during the year and at the balance sheet date.

Collateral against borrowing

A security agreement was executed between Apex Corporate Trustees (UK) Limited (as security agent for Kommunalkredit Austria AG) ("Apex"), Star Energy Group plc and certain subsidiaries, namely; IGas Energy Limited, Star Energy Limited, IGas Energy Enterprise Limited, Island Gas (Singleton) Limited, Island Gas Limited, Dart Energy (East England) Limited, Dart Energy (West England) Limited, IGas Energy Development Limited, IGas Energy Production Limited, Dart Energy (Europe) Limited and GT Energy UK Limited (as chargors) dated 9 April 2024 ("Star Energy Debenture"). On the same date, Scottish bonds and floating charges were executed between Apex (as security agent) and Dart Energy (Europe) Limited and IGas Energy Production Limited (Star Energy Group companies, as "Scottish Chargors") ("Scottish BFCs"). A further security agreement was executed between GT Energy Croatia Limited (a Star Energy Group company, as chargor) and Apex (as security agent) dated 26 April 2024 ("GT Debenture").

Under the terms of the Star Energy Debenture and GT Debenture, Apex has fixed charges over certain real property (freehold and/or leasehold property), petroleum licences, all pipelines, plant, machinery, vehicles, fixtures, fittings, computers, office and other equipment and chattels and all related property rights, shares of certain subsidiaries as well as the assigned agreements and rights and all related property rights and first floating charges over property, assets, rights and revenues (other than those charged or assigned pursuant to the aforementioned fixed charges). Under the terms of the Scottish BFCs, Apex has a first floating charge over all of the assets of the Scottish Chargors.

10 Provisions

Decommissioning provision

The Group spent £0.4 million on decommissioning activities during the year (2024: £1.1 million) related primarily to the Group's share of costs of plugging and abandoning a well at Ellesmere Port and restoration of a  site on the Egmanton field.

Provision has been made for the discounted future cost of abandoning wells and restoring sites to a condition acceptable to the relevant authorities. This is expected to take place between 1 to 32 years from year end (2024: 1 to 31 years). The provisions are based on the Group's internal estimate as at 31 December 2025. Assumptions are based on our cumulative experience from decommissioning wells which management believes is a reasonable basis upon which to estimate the future liability. The estimates are based on a planned programme of abandonments but also include a provision to be spent between 2026-2030 on preparing for the abandonment campaign and for abandoning wells and restoring sites which for regulatory, integrity or other reasons fall outside the planned campaign. The estimates are reviewed regularly to take account of any material changes to the assumptions. Actual decommissioning costs will ultimately depend upon future costs for decommissioning which will reflect market conditions and regulations at that time. Furthermore, the timing of decommissioning is uncertain and is likely to depend on when the fields cease to produce at economically viable rates. This, in turn, will depend on factors such as future oil prices, which are inherently uncertain.

The Group applies an inflation adjustment to the current cost estimates and discounts the resulting cash flows using a risk free discount rate. The provision estimate incorporates the long term UK target inflation rate of 2% subject to a higher rate applied for 2026 since the prevailing inflation rate at the balance sheet date is higher than the target inflation rate. The discount rate used in the provision calculation as at 31 December 2025 ranged from 3.0% to 6.5% (2024: 3.0% to 6.3%). The increase in the risk free discount rate during the year is mainly due to the increase in the yield on UK government bonds for periods comparable to the life of the provision.

At 31 December 2025, the Group reassessed the decommissioning provision which resulted in an increase of £1.0 million in the value of the liability. The change comprises an increase of £2.3 million due to a change in the base costs, offset by a £0.5 million decrease due to change in discount rate and a £0.8 million decrease due to a change in the expected timing of abandonment activities.

Management performed sensitivity analysis to assess the impact of changes to the risk free rate on the Group's decommissioning provision balance. A 0.5% decrease in the risk free rate assumption would result in an increase in the decommissioning provision by £4.7 million. Management also performed sensitivity analysis to assess the impact of changes to the undiscounted future cost of abandoning wells and restoring sites on the Group's decommissioning provision balance. A 10% increase in the undiscounted future cost would result in an increase in the decommissioning provision by £6.0 million.

Contingent consideration

The carrying value of provision for contingent consideration at the beginning of the year related to the acquisition of GT Energy UK Limited, which was payable in shares and was dependent on the achievement of a business development milestone by the 5^th anniversary of completion of the GT Energy share purchase agreement (SPA). The milestone completion date lapsed during the year without the milestone being achieved, hence the provision for contingent consideration was released in full during the year.

In the previous year, provision for contingent consideration of £2.3 million was released following the cancellation of the geothermal project In Stoke-on-Trent (see note 6) which meant that it was not possible to achieve any of the milestones in the GT Energy SPA with the exception of the "business development" milestone referred above.

11 Subsequent events

·      On 24 April 2026, the Group announced that it had signed an agreement for the sale of its three Croatian geothermal licences. The consideration for the sale includes €1.5 million payable on completion (€1.3 million net to Star Energy in accordance with the A14 Energy Limited shareholder agreements) and a financial earn out of €0.5 million per licence on commencement of operations. The sale releases €5.2 million of restricted cash and removes future capital commitments, strengthening our balance sheet and enhancing financial flexibility, while enabling value-accretive capital allocation. Given the delay in the announcement of a premium price tariff for geothermal projects in Croatia by the Croatian Government, the Group believes that the sale of its Croatian subsidiary (IGeoPen doo za trogovinu i usluge) is in the best interests of its shareholders. The transaction delivers a clear strategic refocus of the Group's portfolio, allowing management to concentrate on its core UK oil and gas and geothermal assets. Completion is expected in H2 2026.