Groundstar Resources reports that a new 2000 HP drilling rig (Rig # ZJ-46) built in China was delivered to the Gulf of Suez in mid-January. This rig is on an 18-month contract for WEEM and West Kom Ombo Blocks on a call out basis. The containers have been transported to the Malik #1 drill site on the WEEM block and rigging up is now 20% complete. Barring unforeseen difficulties, drilling is expected to commence by mid-February. The Malik #1 well will be drilled to a total depth of 12,500 feet over a period of approximately 30 days and is the first exploration well of a two well back to back drilling program. Depending on well results, additional wells could be drilled immediately after completion of the first two wells.
These wells will mark Groundstar's first participation in exploratory drilling in its short history. It is the way forward to evolve the Company from pure exploration into an E & P company in the oil sector.
The Company is currently preparing tender documents to submit to seismic acquisition contractors to bid on its planned 700 kilometer 2D seismic program over five large Lower Cretaceous structures identified from the previous seismic data acquired by Repsol. It is planned to begin seismic acquisition by the end of the first quarter or beginning of the second quarter, 2008. A contractor will be mobilized to conduct this seismic acquisition in a joint campaign with Centurion Energy and possibly Melrose.
In spite of significant constraints in the petroleum industry including high costs, skilled labor shortages, very tight drilling rig and seismic crew availability along with strict regulatory requirements, Groundstar has and will continue to significantly advance their international projects in a cost effective and timely manner.
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