Groundstar Resources Provides Kurdistan Update: Hydrocarbons Confirmed at Qara Dagh

CALGARY, ALBERTA--(Marketwire - July 11, 2011) -

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Groundstar Resources Limited ("Groundstar" or the "Company") (TSX VENTURE:GSA) is pleased to provide the following update of the Qara Dagh - 1 exploration well in Kurdistan, Iraq.

Drilling of the Qara Dagh - 1 well has reached a total depth of 3,908 meters, has been log evaluated and, as previously reported, the well has been cased to 3,558 meters with a 7 inch casing string. The following intervals have been evaluated and are summarized as follows:

Open Hole Interval - Shiranish Formation

The open hole interval from 3,558 meters to 3,908 meters was acidized and flowed light oil confirming an active hydrocarbon column. Oil flowed from the interval achieving a maximum production rate spike of 550 barrels of 48 API oil per day and 800 mscf/d of gas with no H₂S. Although no economic stabilized rates were achieved we are extremely encouraged that an active oil column has been confirmed in the upper Shiranish.

From the data interpretation, and the significant spike in observed well bore pressures before the drilling was stopped, it is believed that the well has potentially entered into the first 10 meters of the next reservoir, the Cretaceous-aged Kometan formation, which is one of the primary target zones previously identified. It is important to note that the Kometan formation is regionally known to be a naturally fractured reservoir that has produced significant quantities of oil.

Shiranish / Tanjero Interval

Certain sections of the Shiranish/Tanjero cased interval were perforated and acidized. The well flowed light oil. The interval flowed intermittently at rates of up to 400 barrels per day with APIs varying from 42 to 47 based on field measurements that confirms a second active hydrocarbon system with no H₂S.

Current Status and Go-Forward Plan

Currently the shallower Aliji formation is being tested. The Aliji formation consists of thick sequences of turbidite sands and argillaceous shales with average effective porosity of 16.7% and maximum porosity of 27%. While drilling this section in July 2010, it was reported that an increase in fluorescence, gas readings and free light oil in the mud system was detected.

The partner group is having further discussions to consider the possibility to deepen the well an additional 200 to 250 meters subsequent to the completion of the current testing program. The primary purpose would be to drill deeper to further evaluate the production potential of the prolific Kometan formation, the zone immediately below the Shiranish formation. Confirmation of the possibility and technical capability of deepening the well after testing is expected over the next month.

The Qara Dagh Block is located 60 kilometres southeast of the Taq Taq oilfield and 60 kilometres east of the giant Kirkuk oilfield. Groundstar has a 6% beneficial interest in the Qara Dagh Block.

About Groundstar Resources Limited

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.