CALGARY, ALBERTA--(Marketwired - Aug. 2, 2016) - Groundstar Resources Limited (TSX VENTURE:GSA) (the "Company" or "Groundstar") announces the issuance of 200,000 stock options ("Options") exercisable into common shares in the capital of the Company. These options have been granted to the most recently appointed director, Stephen Hughes. The options are exercisable at $0.05 per share and vest in two tranches. The first tranche will vest upon issuance and the second tranche will vest on the second anniversary of the grant date. The stock options will also expire in five years from the date of grant. This issuance is consistent with previous issuances of options to other directors.
With respect to the Company's operations, a new joint venture partner has been established within its core area of interest, Neilburg Saskatchewan, following the court approved sale of the assets of Palliser Oil & Gas Corporation, the Company's previous joint venture partner. The Company intends to work with its new joint venture partner, Petrocapita Income Trust, to bring its current shut-in production back on-line. The Company anticipates that the successful completion of the initial work-over program will result in the increase of production from the current 11 barrels of oil per day ("bbl/d") to an estimated 30 bbl/d, both figures net to Groundstar.
In addition, the Company has recently received its annual reserves report dated effective April 30, 2016 whereby the qualified independent reserves evaluator, Sproule Associates Limited, has reported an increase in the amount of recoverable reserves of the Company's properties in the Neilburg area relative to the prior year's estimate. The reserves volume has remained unchanged from the prior year's estimate with total proved estimated reserves of 26,500 barrels of oil and total proved plus probable reserves of 35,200 barrels of oil. The before tax net present value of the reserves, using a 10% discount rate, has seen a slight increase from the prior year's estimate with the net present value of total proved reserves at $489,000 and total proved plus probable reserves at $727,000.
The last several months have been spent enhancing and re-positioning the Company's accounting, financial reporting and record keeping processes. With this accomplished, the Company is now expecting to move forward and create value for shareholders. Management has had the past several months to create, in context of the current difficult industry environment, a relevant and sustainable growth strategy. The basis of this strategy is to become a low-cost operator with a concentrated focus on the development of conventional light oil.
About Groundstar Resources Limited
Incorporated in 1968, Groundstar Resources Limited is a publicly traded oil and gas company actively growing a portfolio targeting producing oil and gas assets with development opportunities and exploration upside. The Company's current portfolio of resource assets provides both near term and longer term potential. Groundstar is quoted and trades under the ticker symbol "GSA" on the TSX Venture Exchange.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this press release.
This press release contains forward-looking statements within the meaning of applicable securities laws, including expectations regarding the strategic direction of the Company, the recommencement of drilling activities and the associated timing thereof and expected production related thereto. 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 and resource 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, 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.
Statements relating to "reserves" are deemed to be forward-looking statements or information, as they involve the implied assessment, based on certain estimates and assumptions, that the reserves described can be profitable in the future. There are numerous uncertainties inherent in estimating quantities of reserves, including many factors beyond the control of the Company. The reserve data included herein represents estimates only. In general, estimates of economically recoverable oil and natural gas reserves and the future net cash flows therefrom are based upon a number of variable factors and assumptions, such as historical production from the properties, the assumed effects of regulation by governmental agencies and future operating costs, all of which may vary considerably from actual results. All such estimates are to some degree speculative and classifications of reserves are only attempts to define the degree of speculation involved. The assumptions relating to reserves are contained in the report of Sproule Associates Limited. In addition, estimates of future net present value of reserves may not represent the fair market value of same.