The operator of the block, Aminex Egypt and Groundstar have contracted a brand new drilling rig for 18 months on a call out basis to drill on the WEEM block beginning in mid January 2008. The new rig rated at 2,000 hp is currently being inspected in China and scheduled to arrive in Egypt in December 2007. Two seismically defined prospects in the south part of the block near Lukoil's production area are to be drilled. The operator had a drilling window starting in late November for 2 wells with a local contactor that was later withdrawn. The drilling contract with Shingli Bohai Drilling Company is very attractive and is expected to meet all of the company's drilling requirements in Egypt.
West Kom Ombo (WKO) Block (42,291 sq. km.; 60% Working Interest)
Groundstar is the operator of this block. As a result, the Company has opened a branch office in Cairo. A General Manager and a local Deputy General Manager have been retained to manage the project. Technical work completed to date includes the re-processing of 835 km. of 2D seismic, acquired by Repsol in 1997. A preliminary interpretation of this data shows the presence of several very large Cretaceous structures. A new 2D seismic program has been laid out over five high potential structures and field work will take place in early 2008. As result of our recent interpretation the company has more than doubled its seismic acquisition program.
On September 4 2007, Centurion Energy announced the discovery of the first commercial oil field in Upper Egypt. The well tested light crude oil (37 degree API) from a Cretaceous reservoir at about 4,000 feet. Significant oil shows were reported at both the Repsol KO #1 well and the Centurion KO #4 well from potential sandstone reservoirs below 8,000 feet. Centurion has announced a US$30 million development program, which will include early production by truck and rail tanker to a refinery at Asyut. This commercial discovery has great significance to Groundstar, as the WKO block is located immediately to the west of the Centurion Kom Ombo block. The WKO block has similar subsurface geology with a thicker sedimentary section. Groundstar looks forward to an exciting future with respect to its WEEM and West Kom Ombo exploration activities.
Groundstar is a publicly traded Canadian junior oil and gas company actively pursuing exploration opportunities in Guyana, North Africa and the Middle East.
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