Canadian Superior Stays Strong through Quarter

Canadian Superior has announced its financial and operating results for the three months ("Q3 2008") and nine months ended September 30, 2008 and to provide an update on the "Endeavour" well it is drilling on its "Intrepid" Block 5(c) offshore Trinidad.

Recent highlights include:

  • Western Canada average daily production of 3,567 boe/d in Q3 2008 was up 34% compared to 2,656 boe/d in Q3 2007; petroleum and natural gas revenues of $20.5 million in Q3 2008 were up 100% compared to $10.2 million in Q3 2007; and, cash flow of $9.3 million in Q3 2008, up 344%, compared to $2.1 million in the same period in 2007;
  • Western Canada average daily production for the nine months ended September 30, 2008 was 3,516 boe/d, up 29% or 792 boe/d compared to the nine months ended September 30, 2007; for the nine months ended September 30, 2008, petroleum and natural gas revenues were $61.3 million or $63.57/boe, up 76%, compared to $34.8 million or $46.64/boe for the comparable period in 2007; and, for the nine months ended September 30, 2008, cash flow from operations was $29.2 million or $30.34/boe, up 170%, compared to $10.8 million or $14.49/boe for the comparable period in 2007;
  • On August 13, 2008, Canadian Superior announced that it has made a significant natural gas discovery with the drilling and production testing of its "Bounty" exploration well on its "Intrepid" Block 5(c) offshore Trinidad. The "Bounty" exploration well was drilled to a total depth of approximately 17,360 feet and encountered gas bearing horizons with the main targeted zone in the well encountering approximately 200 feet of pay. Initial test results indicate that the well should be capable of producing at a rate of approximately 200 mmcf/d from this high pressure zone. During the testing of the well, production testing equipment capacity was maximized, resulting in flow testing being restricted to a stabilized rate of 60 mmcf/d of natural gas with a flowing bottom hole pressure of 7186 psi;
  • On August 28, 2008, Canadian Superior announced that it successfully spudded the "Endeavour" well, approximately 5.2 miles north from the "Bounty" natural gas discovery on its "Intrepid" Block 5(c), planned to be drilled to a total vertical depth ("TD") of approximately 18,000 feet subsea. This well is the 3rd well, in an initial 3 well program, being drilled by Canadian Superior and its partners on the "Intrepid" Block, Block 5(c), located approximately 60 miles offshore, off the east coast of Trinidad. "Endeavour" is being drilled on a separate prospect determined from the analysis and evaluation of extensive 3D seismic on the "Intrepid" Block 5(c). The primary objective of "Endeavour" is to prove up a possible multi-TCF reservoir. The Company's 3D seismic based geological prognosis for the "Endeavour" well shows the main target zone to be between the current drilled depth and final TD, which is expected to be reached by mid-December.

Having reached a depth of 15,617 feet subsea in the final section of the well, due to well bore instability being encountered in the recently drilled hole section from 14,492 to 15,617 feet, the decision was made on November 13, 2008 to pull the bottom hole assembly ("BHA") back up to surface and complete various preparations in order to re-drill that 1,125 feet section with a mechanical sidetrack, prior to drilling to TD. It is expected that the drilling of the mechanical sidetrack will commence early this week.

  • On September 3, 2008, Canadian Superior announced its "Oasis" Project, referring to the Company's entry into North Africa. Oasis commenced with the formal signing ceremonies for the offshore "7th of November Block" Exploration and Production Sharing Agreement ("EPSA") that was conducted on Wednesday, August 27, 2008, in Tunis, Tunisia. Canadian Superior and the Tunisian/Libyan company, Joint Exploration, Production, and Petroleum Services Company ("Joint Oil") also signed a "Swap Agreement" awarding an overriding royalty interest and optional participating interest to Joint Oil, in Canadian Superior's "Mariner" Block, offshore, Nova Scotia, Canada. This represents the first such agreement for either Tunisia or Libya. Joint Oil is owned equally by the Tunisian government via Entreprise Tunisienne d'Activites Petrolieres ("ETAP") and the Libyan government via Libya Oil Holdings. Under terms of the EPSA, Canadian Superior has been named Operator for the "7th of November Block" which comprises an area of approximately 1200 square miles (768,000 acres), located some 75 miles offshore the Mediterranean Gulf of Gabes, in water depths ranging from 250-375 feet.

The exploration work commitment for the first phase (4 years) of the 7 year Exploration Period will include three exploration wells, 300 square miles of 3D seismic, and one appraisal well. This appraisal well is intended to be the first well in a fast-track drilling program and will be a direct offset to two significant oil and gas discoveries drilled in the 1990's on a feature known as "Zarat" in the adjacent contract area. Based on 3D seismic acquired subsequent to the discoveries, a substantial portion of the undeveloped "Zarat discovery area" is interpreted to extend north, into the "7th of November Block; and,

  • On September 4, 2008 the Company announced that it successfully closed a private placement, of 8,750,000 units, each unit comprised of one common share of Canadian Superior and one-half of a warrant at a price of $4.00(USD) per unit for total gross proceeds of $35,000,000(USD). The proceeds of this private placement are being used to fund Canadian Superior's international exploration spending and new business development activities.