Groundstar Resources Limited

Groundstar Resources Limited

January 26, 2010 09:03 ET

Groundstar Announces Asset Exchange Agreement in Egypt

CALGARY, ALBERTA--(Marketwire - Jan. 26, 2010) - Groundstar Resources (TSX VENTURE:GSA) is pleased to announce that the company has entered into an asset exchange agreement with Karl Thomson Energy Limited (KTE), its partner in its two Egyptian blocks. This exchange is mainly driven by the Company's desire to increase its interest in the West Kom Ombo (WKO) block where Groundstar is operator and has a major working interest, and which is in an area that has been experiencing a high level of activity. Dana Gas Egypt announced on January 11, 2010 the completion of the Al Baraka-4 well, with a potential flow rate with artificial lifting, of 1,300 bopd, on the block adjacent to the east.

According to this agreement, Groundstar is exchanging its 20% working interest in the West Esh El Mallaha (WEEM) block, where KTE has been funding drilling and completion operations solely as of November 27, 2009, for a 20% interest in the WKO block. Groundstar will also receive approximately US$800,000 in adjustments. As a result of this agreement Groundstar's interest in WKO will increase to 80% and its interest in WEEM will be nil. As a result of this asset exchange agreement, Groundstar's net land interest will increase by over 6,000 square kilometres in the WKO block. This agreement is subject to approval of Egyptian Regulatory Authorities.

Aminex Egypt Petroleum Limited (APEL), the operator of the WEEM block, reported the results of the drilling of South Malak-1 that was accordingly announced on January 4, and is currently in the process of conducting multi fracturing and production testing of the South Malak-1 well, and Groundstar extends its best wishes for successful results.

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 may contain forward-looking statements within the meaning of applicable securities laws. Forward-looking statements may include estimates, plans, anticipations, expectations, opinions, forecasts, projections, guidance or other similar statements that are not statements of fact. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct. These statements are subject to certain risks and uncertainties and may be based on assumptions that could cause actual results to differ materially from those anticipated or implied in the forward-looking statements. These risks include, but are not limited to: the risks associated with the oil and gas industry (e.g. operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses and health, safety and environmental risks), commodity price and exchange rate fluctuation and uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures. The Company's forward-looking statements are expressly qualified in their entirety by this cautionary statement. The forward-looking statements contained in this press release are made as of the date hereof and the Company undertakes no obligations to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as the term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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