Groundstar Resources Limited Files Annual Financial Results - Corporate and Drilling Update


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TSX.V:GSA
08/28/2014 [ACCESSWIRE]

CALGARY, AB / ACCESSWIRE / August 28, 2014 / Groundstar Resources Limited. ("Groundstar", "the "Company", "we", "us", or "our") (TSXV: GSA) is pleased to announce that it has filed with the Canadian securities authorities its audited financial statements and management's discussion and analysis for the year ended April 30, 2014. Copies of the filed documents may be obtained through the company's profile on www.sedar.com

Current Update and Highlights

Achieved a netback of $51.50 per barrel on oil production. Current cash position of $1.9 million, together with internally generated cash flow from current production and an expected debenture facility can finance E&P operations that meet Groundstar's corporate growth strategy.

Groundstar had 100% drilling success rate in Saskatchewan and completed and brought on production two heavy oil wells. These wells have produced at a gross average rate of 240 (102 net) barrels per day for the most recent month. The Company has now spud a third well at Neilburg, Saskatchewan and is expecting an up to four well program through this Winter.

In December 2013, the Company successfully closed a financing for a total gross consideration of $1.7 million with an issue of 7.8 million flow-through shares and approximately 0.9 million common Units. Subsequent to the year end, the Company closed on a $400,000 Convertible Preferred share financing at a price of $1.00 per share. The Preferred shares will pay a 10% dividend and each preferred share is convertible to 4 common shares of the Company after 12 months and until 30 months from the closing date

Recent development drilling in the Western Canadian Sedimentary Basin is the execution of the orderly transition work plan announced in 2013 focusing on high netback lower risk drilling opportunities. The company continues to pursue production acquisition opportunities characterized by stable, large original oil in place reservoirs, crude oil and gas with access to existing production, transportation infrastructure and market points.

Selected Financial Data

 ---------------------------------------------------------------------------------------
 |The twelve month                     |2014         |2013                             |
 |periods ended April                  |             |                                 |
 |30,                                  |             |                                 |
 |-------------------------------------------------------------------------------------|
 |                                     |$355,555     |                                 |
 |Revenue                              |             |                                 |
 |                                     |             |           $180,000              |
 |-------------------------------------------------------------------------------------|
 |Share Capital                        |$21,213,832  |         $19,950,145             |
 |-------------------------------------------------------------------------------------|
 |Contributed Surplus                  |$11,244,783  |        $11,100,182              |
 |-------------------------------------------------------------------------------------|
 |Total assets                         |$3,340,504   |        $4,377,850               |
 |-------------------------------------------------------------------------------------|
 |Net loss                             |(1,638,719)  |       (6,431,446)               |
 |-------------------------------------------------------------------------------------|
 |Net loss per share– basic and diluted|(0.08)       |       (0.64)                    |
 |-------------------------------------------------------------------------------------|
 |                                     |             |                                 |
 ---------------------------------------------------------------------------------------

Outlook and Update Takutu Basin, Western Desert Basin, Western Canadian Sedimentary Basin

In Guyana, Takutu Oil and Gas Inc., a wholly owned subsidiary of Groundstar, is a Licensee to the Takutu Basin Petroleum Prospecting License ("PPL") with the Guyana Geology and Mines Commission ("GGMC"). Takutu Oil and Gas Inc. holds the corporation's 10% interest in the Takutu Basin PPL comprising an area of approximately 7,800 sq km. Groundstar's 10% working interest is carried to commercial production. Work is ongoing to drill another well for petroleum in the Takutu Basin. In the Egyptian Western Desert Basin the operator continues its evaluation of geological, geophysical & aeromagnetic surveys. The Corporation's 10% interest will be carried by the Operator for the first $30.0 million in expenditures ($3.0 million net to Groundstar). In Kurdistan, the Corporation has now disposed of its interest in the Qara-Dagh Block and received a relinquishment payment of $1.7 million in the first quarter of 2014 fiscal year. In the Western Canadian Sedimentary Basin, the Company is adding production, drilling locations and acquisitions which fit Groundstar's corporate growth strategy. The Company has agreed to issue 565,000 common shares in the capital of the Company ("Common Shares") at a price of $0.25 per share pursuant to shares for settlement agreements. Any Common Shares issued will remain subject to a minimum four month hold period from the date of issuance in accordance with applicable securities laws. The issuance of Common Shares by the Company is subject to certain conditions including but not limited to, approvals of the TSX Venture Exchange.

This news release does not constitute an offer to sell or solicitation of an offer to sell any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

About Groundstar Resources Limited

Incorporated in 1968, Groundstar Resources Limited is a diversified publicly traded oil and gas company with oil production and exposure to 7.3 million gross acres of resource assets. The Company is actively growing a portfolio targeting producing oil and gas assets with development opportunities and exploration upside. The Company's current portfolio of assets provides both near term and longer term potential. Groundstar is quoted and trades under the ticker symbol "GSA" in Canada and "GRDSF" in the United States.

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. This press release may contain forward-looking statements within the meaning of applicable securities laws including expectations regarding the receipt of the company's drilling and exploration plans and government and third party approvals releating thereto. 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.

Contact Information:

Groundstar Resources Limited www.groundstarresources.com

Chad Dust

403 265 2549 or 403 608 6505

Tyron Pfeifer

403 614 9902

Suite 2300, 144 4th Avenue SW Calgary, Alberta T2P 3N4

NOT FOR DISTRIBUTION TO THE U.S.A. NEWS WIRE SERVICES OR FOR DISSEMINATION TO THE U.S.A.

 

SOURCE: Groundstar Resources Limited. 

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