Groundstar Resources Limited

Groundstar Resources Limited

July 18, 2005 09:00 ET

Groundstar Resources Limited: Takutu Basin Licence Formally Granted

CALGARY, ALBERTA--(CCNMatthews - July 18, 2005) - Groundstar Resources Limited (the "Company") (TSX VENTURE:GSA) announced today that Groundstar Resources Inc., a Guyana corporation, 50% of which is indirectly held by the Company, has been formally granted an exclusive Petroleum Prospecting Licence covering 9,800 square kilometers of the Takutu Basin in Guyana (the "Property"), by the Government of Guyana. A letter of intent had previously been issued in respect of the Property - see the Company's news release April 29, 2005. This Licence includes the Takutu oil discovery area made by Home Oil in 1982. The Karanambo #1 oil well produced at a rate of 411 BOPD of 42 API light gravity crude during a five hour test. The Licence has a four year term, during which the Company expects to incur US$5,405,000 of exploration costs. It is estimated that the first year's costs will be US$630,000, of which US$500,000 is mandatory.

In the event of a commercial discovery, the net profits from oil production on the concession will be equally shared between Groundstar Resources Inc. and the Government of Guyana. As part of this agreement, Groundstar's royalties and major taxes are included in the Government's share of those profits.

The Company has the right to acquire the remaining 50% ownership of the Guyanian subsidiary in exchange for 1,000,000 common shares of the Company. This transaction remains subject to Exchange approval.

The Company is also filing with TSX Venture Exchange (the "Exchange") a NI 51-101 geological report relating to the Property to meet its Tier 2 maintenance requirements. That report will be made available for review on the Company's website.

The Company is a junior oil and gas company, based in Calgary, actively pursuing exploration and production opportunities in Guyana, Libya and other international regions.


Kam Fard, President

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

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