Star Energy wins two geothermal licences in Croatia

The AIM-traded firm said the Sječe and Pčelić licences, secured during the ongoing licensing round announced last December, boasted an initial five-year exploration term in the Drava depression geological region of the Pannonian basin.

Notably, the region also includes the recently acquired Ernestinovo licence area.

It said Sječe, a 32 square kilometre licence located in the northeastern section of Croatia within the Drava Depression, is substantiated with extensive data, including 356 kilometres of 2D seismic and approximately 20 square kilometres of 3D seismic data.

The licence, which has seen the drilling of nine exploration wells, identified up to three different hot water reservoirs.

Early appraisals revealed the feasibility of establishing a power plant with a capacity between 15 and 25MWe.

The project forecasts a promising net present value and an internal rate of return in the high teens, bolstering its economic viability.

Conversely, the Pčelić licence covers another 32 square kilometres within the Drava Depression in northern Croatia, supported by 262 kilometres of 2D seismic data and insights from two previously drilled exploration wells.

Those wells, Pče-1 and Pče-1AL, recorded bottom temperatures of 196 and 207 degrees Celsius, respectively, indicating a robust geothermal potential.

Preliminary evaluations showed that a 20 to 30MWe power plant could be practically established, aligning with the net present value and internal rate of return similar to those projected for the Sječe licence.

Despite the licence commitments dictating the drilling of four and three wells for Sječe and Pčelić, respectively, Star anticipated that only the first well on each would serve as an exploration and appraisal well, given the already rich data density.

The company said it was confident in exploring the geothermal potentials, which could notably enhance Croatia’s geothermal energy landscape on successful exploration and subsequent development.

“We are very pleased to have been issued these two highly prospective licences,” said chief executive officer Chris Hopkinson.

“Now, with a portfolio of three licences, including Ernestinovo, we have demonstrated that our Croatian joint venture is well positioned to be a key player in delivering geothermal energy in Croatia in line with the local government's targets.

“We have already commenced preparing the site for our first well re-entry on Ernestinovo and look forward to commencing work on these two licences.”

At 1255 BST, shares in Star Energy Group were down 0.55% at 11.02p.

Reporting by Josh White for Sharecast.com.