Groundstar Resources Limited Corporate Update News Release

CALGARY, ALBERTA--(Marketwire - Dec. 24, 2012) -

NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES. ANY FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A VIOLATION OF U.S. SECURITIES LAWS.

The board of directors of Groundstar Resources Limited (TSX VENTURE:GSA) (the "Company") is pleased to announce the licencing of the first of two locations to be drilled in central Alberta. The 16-26-55-15 W4 well is located 70 kilometers northeast of Edmonton and will target sweet, heavy oil and gas from a Leduc reef at an approximate depth of 800 meters. The reef, defined by proprietary 3D seismic and characterized by extensive core data, is approximately 10,000 acres in areal extent and represents a large volume Prospective Resource. The topography of the area makes for ease of operations and extensive, existing infrastructure provides for rapid monetization pending successful drilling results. The well(s) are expected to take four days to drill.

Groundstar is also pleased to announce that is has now closed its offerings by issuing an aggregate of (i) 5,871,500 units at a price of $0.20 per unit (the "Units") and (ii) 3,092,000 flow-through units at a price of $0.25 per unit (the "Flow-Through Units"), for total gross proceeds of approximately two million dollars (the "Offering"). Each Unit consists of one common share in the capital of the Company (a "Common Share") and one half of one common share purchase warrant ("Warrant"). Each Flow-Through Unit consists of one Common Share to be issued on a "flow-through" basis within the meaning of the Income Tax Act (Canada) and one half of one Warrant. Each whole Warrant will entitle the holder thereof to purchase one Common Share ("Warrant Share") at a price of $0.30 each at any time on or prior to June 24, 2014.

The short form prospectus offering was conducted on a commercially reasonable effort basis through a syndicate of agents consisting of PI Financial Corp. and Canaccord Genuity Corp. (collectively, the "Agents"). In connection with the Offering, the Company paid the Agents a cash commission of approximately 128,000 dollars and granted 594,360 warrants to the Agents pursuant to the Offering ("Agents' Warrants"). The Agents' Warrants are exercisable into Common Shares at a price of $0.30 at any time prior to June 24, 2014.

The Company will use the net proceeds from the Offering to further the exploration and development activities of its oil and gas properties and for general corporate purposes. The proceeds received by the Company from the sale of the Flow-Through Units will be used to incur eligible Canadian Exploration Expenses ("CEE") which will be renounced in favour of subscribers for the 2012 taxation year.

The Units and Flow-Through Units were issued pursuant to the Company's short form prospectus dated December 19, 2012 (the "Prospectus"). A copy of the Prospectus, which contains important information relating to the Offering, is available under the Company's profile on the SEDAR website at www.sedar.com

This news release does not constitute an offer to sell or solicitation of an offer to sell any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

About Groundstar Resources Limited

Incorporated in 1968, Groundstar Resources Limited is a publicly traded oil and gas company with exposure to 7.3 million gross acres of resource assets. The Company is actively targeting and growing a portfolio of producing oil and gas assets with development opportunities and exploration upside. The Company's current portfolio of resources assets provides both near term and longer term potential. Groundstar trades under the ticker symbol "GSA".

This press release contains forward-looking statements within the meaning of applicable securities laws, including expectations regarding the anticipated use of proceeds from the Offering. 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 and uncertainties regarding the intended use of the net proceeds of the Offering. 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.