Groundstar Resources Limited announced that the Egyptian Ministry of Petroleum has approved the deed of assignment which transfers a 60% net interest in the West Kom Ombo block to Aegean Energy. This approval completes one of the main conditions of the Sale Agreement between the two companies announced in June 2010.
Several additional conditions of the Sale agreement await approval by the appropriate authorities which is anticipated shortly. Groundstar has a 10% net carried interest in the block.
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.
The first exploration well will be located in Area A on a fault closed structure with 3 way dip closure. If the well is a successful discovery, several other structures in the immediate area would warrant drilling. Area A is in the central eastern part of the block near the boundary of the Kom Ombo block operated by Dana Gas Egypt on which the Al Baraka oil discovery is in the development and early production stage.
Groundstar wishes to acknowledge the continued support of Energean Oil & Gas to complete the pre-drill task and move the joint project closer to the drilling stage.