Groundstar Resources Limited

Groundstar Resources Limited

November 12, 2010 06:00 ET

Groundstar Resources Provides Corporate and Operation Update

CALGARY, ALBERTA--(Marketwire - Nov. 12, 2010) - Groundstar Resources Limited (TSX VENTURE:GSA) -

West Kom Ombo Block, Upper Egypt

Groundstar Resources Limited ("Groundstar" or the "Company") is pleased to announce that it has completed the sale of 60% of its interest in the West Kom Ombo block to Aegean Energy.

Substantial progress has been achieved towards the objective of drilling the first exploration well on the block. An access road to the drilling site and the drill site pad have been completed. Casing and wellheads have been acquired. The drilling contract for two firm and two option wells has been awarded to Sino Tharwa Drilling Company. The exploration well will likely spud by the end of November.

Through a series of transactions, expected to be approved by Egyptian authorities, Groundstar will retain a 10% net interest that will be carried for a minimum of four exploration wells with a capital expenditure of up to US$30 million gross. Aegean Energy Egypt (a subsidiary of Energean Oil & Gas) will ultimately have an 80% working interest and will be the operator of the block.

The funds received from these transactions place Groundstar in a very favourable financial position to meet all its corporate and exploration obligations for the remainder of 2010 and through 2011.

Qara Dagh Block, Kurdistan, Iraq

The Qara Dagh -1 exploration well, operated by Niko, experienced operational difficulties in the Tanjero formation near the current measured depth of 2,239 meters. These difficulties have been resolved. The go forward plan is to install intermediate 11 3/4 inch casing string and drill ahead to evaluate the three primary Cretaceous targets; Shiranish, Kometan and Qamchuga. Drilling for the Qara Dagh-1 well is anticipated to be completed in January 2011.

Groundstar is extremely pleased and excited to have reached this stage. A high-potential well is currently drilling in Kurdistan. An exploratory well will be drilled this year on two other high impact blocks, the WKO block in Upper Egypt and the Takutu PPL in Guyana, at no cost to the Company. Regardless of this year's drilling results, additional exploration wells will be drilled in 2011 in Guyana and Egypt at no cost to Groundstar.

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

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 that 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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