Groundstar Resources Limited

Groundstar Resources Limited

January 18, 2010 08:31 ET

Groundstar Resources Limited Provides Initial Resource Assessment for the Qara Dagh Block in the Kurdistan Region of Iraq

CALGARY, ALBERTA--(Marketwire - Jan. 18, 2010) - Groundstar Resources Limited ("Groundstar" or the "Company") (TSX VENTURE:GSA) is pleased to announce that AJM Petroleum Consultants ("AJM") has completed an initial resource assessment of the Company's Qara Dagh Block, in the Kurdistan Region of Iraq. AJM has estimated an unrisked "Best Estimate" of 2.7 billion barrels of Petroleum Initially in Place as of December 31, 2009. This assessment was requested by the operator on behalf of the consortium members.

The first exploration well in this block is scheduled to spud in March 2010 and drill to a total depth of about 4,000 meters targeting seven prospective formations in Cretaceous and Jurassic periods.

Groundstar believes the proximity of the Qara Dag block to the recent discoveries of Taq Taq and Miran in addition to the result of recently acquired seismic and well data from the adjacent block, makes the structure a low risk prospect with the potential for the discovery of large oil reserves.

The table below sets out the gross volumetric estimates, as prepared by AJM, independent petroleum consultants.

Petroleum Initially-In-Place (PIIP) and Prospective Resources
Qara Dagh Block
As of December 31, 2009
Oil (millions of Barrels)
Low Best High
Category Estimate Estimate Estimate
P90(2) P50(3) P10(4)
Petroleum Initially in Place 1,674 2,742 4,896
Prospective Gross Ultimate Recovery 269 450 849
(1) These are the gross volumes estimated for the Qara Dagh Block, without
any adjustments for working interest or encumbrances. Groundstar holds
a 6% beneficial interest in this resource accumulation.
(2) Low Estimate is considered to be a conservative estimate of the
quantity that will actually be recovered. P90 means that there is a
90-percent chance that an estimated quantity, such as a prospective
resources volume or associated value, will be equalled or exceeded.
(3) Best Estimate is considered to be the best estimate of the quantity
that actually will be recovered. P50 means that there is a 50-percent
chance or that it is equally likely that the actual remaining
quantities recovered or associated value will be greater or less than
the best estimate.
(4) High Estimate is considered to be an optimistic estimate of the
quantity that will be recovered. P10 means that there is a 10-percent
chance that an estimated quantity, such as a prospective resource
volume or associated value, will be equalled or exceeded.
(5) While the above quantities have not been adjusted for risk, AJM has
assigned reserves to 7 formations. The Cretaceous which currently
contains 3 target reservoirs has been estimated to have an average
chance of success of 30%. The Jurassic currently contains 3 target
reservoirs and has been estimated to have an average success chance
of 21% and the Triassic has 1 target reservoir with an estimated
chance of success of 17%.
(6) Undiscovered petroleum and prospective resources were estimated for
the main Qara Dagh structure, which consists of the Sagirma and Qara
Dagh areas, and the Golan structure. These estimates have been
combined in the above table.
(7) The resource estimate was prepared in accordance NI 51-101 and the
COGE Handbook.

Prospective resources are those resources of petroleum estimated, as of a given date, to be potentially recoverable from undiscovered accumulations by application of future development projects. Prospective resources have both an associated chance of discovery and a chance of development. The chance of commerciality is the product of these two risk components. There is no certainty that any portion of the prospective resources will be discovered. If a discovery is made, there is no certainty that it will be developed or, if it is developed, there is no certainty as to the timing of such development or that it will be commercially viable to produce any portion of the prospective resources.

Prospective oil resources are undiscovered resources that indicate exploration opportunities and development potential in the event a commercial discovery is made and should not be construed as reserves or contingent resources.

Groundstar has a 6% beneficial interest in the Qara Dagh Block. A 354-kilometer 2D seismic program was completed in June 2009 and plans have been finalized to spud the first exploration well in March 2010. The block covers 846 square kilometers and has a large linear surface anticline, which is on a similar trend as the existing oil fields in northern Iraq and the more recent discoveries in Kurdistan at Taq Taq and Miran. Data processing and interpretations have been completed and integrated with regional and surface geological models. Three main prospects, which correspond to the three domes on the surface structure, have been confirmed by seismic mapping.

The Qara Dagh Block is located in the prolific Zagros foldbelt which extends from southern Turkey across northern Iraq and into southwest Iran, which contain giant and supergiant accumulations of oil. The large surface structure on the block known as Qara Dagh is a prominent anticline which rises as high as 600 meters above adjacent valley floors. This block, which is 65 kilometers by 5 kilometers, is located 60 kilometers southeast of the Taq Taq oilfield and 60 kilometers east of the giant Kirkuk oilfield, and is adjacent to a Heritage block with a recent oil discovery.

Groundstar is a publicly traded Canadian junior oil and gas company actively pursuing exploration opportunities in the Middle East, North Africa and South America.

This press release contains "forward looking information" within the meaning of applicable Canadian securities legislation. Forward looking information includes, but is not limited to, statements with respect to the estimated resource assessment, the prospective nature of the Block, exploration and development plans and projected expenses, receipt of government approvals, and relationships with other companies who hold an interest in the Qara Dagh block. Generally, forward looking information can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". Resource estimates are based on assumptions and parameters agreed upon, and considered reasonable, by the management of the Company, AJM and the other companies with interests in the Block. Statements regarding timetable of future exploration of the Block are based on the plans set by the companies with interests in the Blocks. Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking information. For a description of some of such risks, please see the Company's annual information form filed under the profile of the Company on SEDAR. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward looking information. The Company does not undertake to update any forward-looking information, except in accordance with applicable securities laws.


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