Groundstar Resources Limited (“Groundstar” or the “Company”) is pleased to announce that as operator of the West Kom Ombo (WKO) block in Upper Egypt, seismic contractor CGG-Ardiseis commenced the acquisition of 600 to 700 kilometers of 2D seismic on the block on September 14, 2008. The WKO block is one of the largest onshore concessions in Egypt. Originally, the Company planned to acquire 300 kilometers of seismic in order to satisfy the minimum initial phase work program commitment; however, due to the very significant resource potential of the block demonstrated by internal as well as external independent interpretation studies, the program has been doubled to provide detailed seismic coverage over five large Lower Cretaceous structures. The independent NI 51-101 compliant resource assessment potential of the five prospects completed by Gustavson Associates was announced by the Company on June 27, 2008. The P50 probabilistic resource recoverable estimate for the Lower Cretaceous prospects is 569 million barrels (341 million net to Groundstar). Details of the Gustavson report can be found on www.groundstarresources.com.
It is expected that the seismic acquisition program will be completed in 2 to 2.5 months. The processing and interpretation of the new seismic will be completed in early 2009 and drilling of the first exploratory well could start in the second quarter of 2009.
Ganope El Wadi Holding Petroleum Company has approved Groundstar’s request to enter into the first extension period (the second exploration phase) for the WKO Concession Area for a period of three years from September 17, 2008. Groundstar will relinquish 25% of the original concession area effective September 16, 2008 reducing the size of the concession from 42,291 square kilometers to 31,521 square kilometers. This relinquishment does not have any negative impact on the five identified Lower Cretaceous prospects.
It has been announced in the Egyptian press that Centurion Energy has completed a successful appraisal well, Kom Ombo #5, on the Al Baraka structure in the adjacent block to the east and found a new Lower Cretaceous oil reservoir. Testing of the zone is currently in progress. Centurion has announced the drilling of a third exploratory well 9.5 kilometers to the west of the Al Baraka area.
Groundstar is a publicly traded Canadian junior oil and gas company actively pursuing exploration opportunities in Guyana, North Africa and the Middle East.
(Groundstar Press Release)