Canadian Superior reported record production growth of 150% in the third quarter compared to third quarter 2001, but posted a net loss of C$821,000 for the quarter and C$1.6 million for the first nine months of 2002, due largely to increased non-cash depletion expenses, compared to a loss of C$95,000 and income of C$8,789,000, respectively, for the same periods during 2001.

“The period was highlighted by several significant achievements by the company, including operating the drilling of our first Offshore Nova Scotia well,” Canadian Superior said in its 3Q report. “In addition, we continued to actively develop and successfully expand our interest in several significant high impact Western Canadian natural gas plays.”

On the East Coast, the company said it found success in the drilling of its “Marquis” L-35/L-35A well. The well also confirmed the targeted play type, the Abenaki reef reservoir and porosity. “Accordingly, we intend to proceed with the drilling of a second Marquis well on our Marquis natural gas project during 2003,” the company added. “In addition, on our 101,800 acre Mariner project, drilling plans are proceeding ahead with a well planned for early 2003 on this ‘world-class’ prospect.”

During the quarter, Canadian Superior said it has initiated a 2,200-kilometer high resolution seismic program with El Paso Oil & Gas Canada, Inc. on the Mariner lands. With the shooting of the C$3.5 million seismic program completed, the company is currently moving ahead with drilling preparations for its first Mariner exploration well. In addition, the company noted that the deep water natural gas play Offshore Nova Scotia is attracting worldwide attention, as industry moves forward with several significant deep water exploration wells. Canadian Superior holds a large stake in the region with its 100% owned “Mayflower” block.

Other highlights from the company include:

In the quarter, gas production averaged 6.5 MMcf/d, up 150% from 2.6 MMcf/d during the third quarter of 2001. Canadian Superior said it realized an average gas price of C$3.49/Mcf in the third quarter of 2002, up from C$3.09 in the third quarter of 2001, bringing the first nine months of 2002 average price to C$3.60/Mcf, down 40% from C$6.02/Mcf during 2001. In spite of the lower nine month natural gas prices in 2002, year to date revenues increased significantly to C$5.2 million in 2002, from C$4.1 million in 2001, as average natural gas production nearly doubled to 4.7 MMcf/d for the nine months ended September 30, 2002, up from 2.4 MMcf/d in the same period of 2001.

Canadian Superior said its management, staff and board remain firmly committed to developing its Western Canadian and East Coast projects. “A core production base in Western Canada has been developed and our East Coast program has commenced,” said the company. “Our objective in 2003 is to continue to emerge as a rapidly growing, well capitalized, intermediate oil and gas company. We are determined to remain well capitalized and focused on what must be achieved to continue growth and to increase long-term value for our shareholders.”

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