CALGARY, ALBERTA–(Marketwired – Aug. 2, 2016) – Groundstar Resources Limited (TSX VENTURE:GSA) (the “Company” or “Groundstar“) announces the issuance of 200,000 stock options (“Options“) exercisable into common shares in the capital of the Company. These options have been granted to the most recently appointed director, Stephen Hughes. The options are exercisable at $0.05 per share and vest in two tranches. The first tranche will vest upon issuance and the second tranche will vest on the second anniversary of the grant date. The stock options will also expire in five years from the date of grant. This issuance is consistent with previous issuances of options to other directors.
With respect to the Company’s operations, a new joint venture partner has been established within its core area of interest, Neilburg Saskatchewan, following the court approved sale of the assets of Palliser Oil & Gas Corporation, the Company’s previous joint venture partner. The Company intends to work with its new joint venture partner, Petrocapita Income Trust, to bring its current shut-in production back on-line. The Company anticipates that the successful completion of the initial work-over program will result in the increase of production from the current 11 barrels of oil per day (“bbl/d“) to an estimated 30 bbl/d, both figures net to Groundstar.
In addition, the Company has recently received its annual reserves report dated effective April 30, 2016 whereby the qualified independent reserves evaluator, Sproule Associates Limited, has reported an increase in the amount of recoverable reserves of the Company’s properties in the Neilburg area relative to the prior year’s estimate. The reserves volume has remained unchanged from the prior year’s estimate with total proved estimated reserves of 26,500 barrels of oil and total proved plus probable reserves of 35,200 barrels of oil. The before tax net present value of the reserves, using a 10% discount rate, has seen a slight increase from the prior year’s estimate with the net present value of total proved reserves at $489,000 and total proved plus probable reserves at $727,000.
The last several months have been spent enhancing and re-positioning the Company’s accounting, financial reporting and record keeping processes. With this accomplished, the Company is now expecting to move forward and create value for shareholders. Management has had the past several months to create, in context of the current difficult industry environment, a relevant and sustainable growth strategy. The basis of this strategy is to become a low-cost operator with a concentrated focus on the development of conventional light oil.
About Groundstar Resources Limited
Incorporated in 1968, Groundstar Resources Limited is a publicly traded oil and gas company actively growing a portfolio targeting producing oil and gas assets with development opportunities and exploration upside. The Company’s current portfolio of resource assets provides both near term and longer term potential. Groundstar is quoted and trades under the ticker symbol “GSA” on the TSX Venture Exchange.