Groundstar Resources Limited

Groundstar Resources Limited

March 12, 2008 13:32 ET

Groundstar Resources Limited: Takutu Basin, Guyana Farm-In

CALGARY, ALBERTA--(Marketwire - March 12, 2008) - Groundstar Resources Limited (TSX VENTURE:GSA) is pleased to announce that the Company has entered into a preliminary Farm-In and Standstill Agreement with an industry partner on its Petroleum Prospecting Licence (PPL) in the Takutu Basin in Guyana.

Under the terms of the Farm-In Agreement, the Farmee will pay 100% of all exploration expenses up to US$12 million to earn an undivided 55% Working Interest in the block. The Farmee has the option to increase its Working Interest by 10% to 65%, exercisable any time before July 22, 2008 by issuing to Groundstar, CDN$1 million worth of Farmee's securities. As a condition of the Farm-In Agreement, Groundstar has agreed to a Standstill clause whereby it will refrain from completing any transaction with any other party on the PPL until March 22, 2008 for a Break Fee of US$500,000.

Groundstar has three large seismically defined prospects on the PPL with a combined P90 Resources Estimate of 177 million barrels. The Karanambo #1 well drilled by Home Oil in 1982 tested 411 barrels of oil per day (42 deg API), with no water, during a 5 hour drill stem test proving the Basin has all the essential elements of a petroleum system. The fiscal terms of the PPL are very favorable.

Groundstar is extremely excited to enter into this Farm-In, as it will lead to the drilling of a minimum of two exploratory wells. It is anticipated the wells would be drilled in Q4 2008 to Q1 2009.

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

FORWARD LOOKING STATEMENTS: All statements in this news release that are forward looking statements involve various risks and uncertainties. There can be no assurance that such statements will prove accurate; actual results and future events could differ materially from those anticipated in such statements.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the accuracy or adequacy of this release.

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