Groundstar Resources Limited 2300 Sun Life Plaza West Tower 144 , 4th Ave. SW, Calgary, Alberta, Canada

The last several months have been spent enhancing and re-positioning Groundstar’s accounting, financial reporting and record keeping processes. This accomplished, the Company is now able to move forward. Management has had the past several months to create, in context with the current industry environment, a relevant and sustainable growth strategy for the times. The basis of this strategy is to become a low cost operator with a concentrated focus on the development of conventional, light oil.

Other companies are focused on non-conventional oil opportunities which require horizontal drilling and/or multistage fracking. The cost of these wells range from $3MM - $5MM for Mannville / Cardium depth wells to in excess of $10MM - $15MM for Duvernay / Montney drills. Productivity from these wells is highly variable with typical payouts occurring in years, not months.

How does Groundstar source conventional light oil? What’s old is new again.

Very simply, the only source of significant conventional light oil reserves reside in the Devonian reef systems of Alberta and Devonian, Silurian, and
Ordovician formations of Saskatchewan. These horizons are proven, high volume light oil producers. These vertically drilled wells require no fracking with risk capital seldom exceeding $700K, and  successful wells on production for between $1.2MM - $1.5MM. Because of initial production rates ranging from 100 BOPD - 300 BOPD, payout is achieved in months, not years.

Focused conventional light oil development characterized by:

• Significant original oil in place (OOIP) provides Enhanced Oil Recovery (EOR) potential
• Risk mitigation utilizing existing vertical well control and production histories
• Focused development of assets with room to run land position creates significantly reduced operating costs 
• Strive to be low cost operator in all asset areas
• Defined exit strategy from play

Converting Classical Geological Concepts Into Light Oil Development Through Modern Technology Application

Certain of Groundstar’s staff had the privilege of working with Dr. John Andrichuk and Dr. Ralph Edie, two industry professionals widely regarded as the grandfathers of Devonian geology in Western Canada. Having formed Andrichuk & Edie Independent Geologists in 1957, John and Ralph were fervent in their application of science and geology while exploring, resulting in multiple new pool oil and gas discoveries. They have singularly and jointly been involved in the discovery of more than 500MM BOE. Exclusive access to their inventory of reef prospects generated over the past 60 years will be the centerpiece of Groundstar's development of conventional light oil reserves.

Reef Drilling: A New Old Play

The evolution of 3D seismic, modern well log analysis combined with the extensive geological review processes of Andrichuk
and Edie will facilitate not only development of significant and incremental light oil reserves within mature producing fields but also the
identification of previously overlooked exploration targets.

•  Recently reprocessed 3D seismic base
•  Low risk opportunity to develop significant light oil reserves; conventional vertical drilling; no fracking
•  Focus areas characterized by analogous and existing reef production with existing infrastructure
• All locations are targeting light oil at depths of +-600m to 2000m