Canadian Superior announced today the appointment, upon the application of BG International, a wholly owned subsidiary of the BG Group plc, of an interim Receiver of its participating interest in "Intrepid" Block 5(c). Pursuant to the Court Order, the Receiver, in conjunction with BG, will operate the property and conduct the flow testing of the "Endeavour" well which Canadian Superior believes will validate its operations to date. The Court Order allows the Receiver to charge Canadian Superior interest in Block 5(c) with an amount up to U.S. $47 million to pay for its share of the costs under the joint operating agreement with BG. Canadian Superior will continue with the monetization of its interest in Block 5(c) as previously announced and the proceeds from any sale will be applied to its share of the costs charged against Block 5(c) and to discharge the Receiver.
Canadian Superior questions the motives of BG given the fact that Canadian Superior has announced its intention to monetize all or a portion of its interests in Block 5(c). The Company has to date under its operatorship drilled and flow tested two (2) successful wells and is awaiting results of the flow testing on the third well which will validate our operations on the Block. Expenditures to date on this three (3) well program have totaled approximately U.S. $290 million. Canadian Superior believes there is a significant surplus value in its interests well in excess of its obligations. Canadian Superior has instructed its legal counsel to pursue all available legal remedies including an appeal.
The "Intrepid" Block 5(c) is located approximately 60 miles off the east coast of Trinidad in the Columbus Basin and covers 80,041 gross acres. In 2008, Canadian Superior and its Joint Venture partners, BG and Challenger Energy Corp. announced two separate natural gas discoveries on the "Intrepid" Block 5(c); in the "Victory" well and in the "Bounty" well. Production test rates have been previously reported. The 3rd well, "Endeavour," has also discovered natural gas and final detailed results for the "Endeavour" well will be publicly released in due course.
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