| Valuation method | Value, £ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | n/a | n/a |
| Intrinsic value (DCF) | n/a | |
| Graham-Dodd Method | 1.50 | 43 |
| Graham Formula | 23.80 | 2167 |
Star Phoenix Group Ltd (LSE: STA.L) is an oil and gas exploration and production company with operations in Trinidad and Indonesia. Formerly known as Range Resources Limited, the company rebranded in March 1984 and is headquartered in Perth, Australia. Star Phoenix holds a 23% interest in the Perlak project in Northern Sumatra and provides oilfield services. Operating in the high-risk, high-reward energy sector, the company focuses on hydrocarbon exploration and production, leveraging its assets in emerging markets. Despite challenges in revenue generation, Star Phoenix remains a niche player in the oil and gas industry, targeting underdeveloped reserves in strategic locations. With a market capitalization of approximately £1.58 million, the company appeals to investors seeking exposure to small-cap energy ventures with international assets.
Star Phoenix Group Ltd presents a high-risk investment opportunity due to its lack of revenue, negative net income (£-1.52 million), and negative operating cash flow (£-1.45 million) in FY 2022. The company’s exploration-focused model in Trinidad and Indonesia exposes it to geopolitical risks and commodity price volatility. However, its zero debt and £758k in cash provide some financial flexibility. With a low beta (0.336), the stock may exhibit lower volatility compared to the broader energy sector. Investors should weigh the speculative nature of its exploration projects against potential long-term upside if successful in commercializing reserves. Dividend-seeking investors should note the absence of payouts.
Star Phoenix Group operates in a highly competitive oil and gas exploration sector dominated by larger, well-capitalized firms. Its competitive positioning is constrained by its small scale, lack of revenue, and reliance on exploration success in Trinidad and Indonesia. The company’s 23% stake in the Perlak project offers potential upside but requires significant capital to develop. Unlike integrated energy majors, Star Phoenix lacks downstream operations or diversified revenue streams, increasing its risk profile. Its competitive advantage lies in its niche focus on underdeveloped regions, potentially yielding high returns if exploration succeeds. However, the company’s financial weakness limits its ability to compete with larger peers in bidding for assets or sustaining prolonged exploration phases. Without proven reserves or production revenue, Star Phoenix remains a speculative play dependent on successful drilling outcomes and favorable energy markets.