Canadian Superior Energy Inc.
TSX : SNG
AMEX : SNG

Canadian Superior Energy Inc.

May 14, 2008 20:00 ET

Canadian Superior Energy Announces First Quarter 2008 Financial and Operating Results

CALGARY, ALBERTA--(Marketwire - May 14, 2008) - Canadian Superior Energy Inc. ("Canadian Superior" or the "Company") (TSX:SNG) (AMEX:SNG) is pleased to announce its financial and operating results for the three months ended March 31, 2008 ("Q1").

Highlights

- In January 2008, Canadian Superior announced a large natural gas discovery in Trinidad. Successfully drilled its "Victory" well, "Intrepid" Block 5(c), offshore Trinidad; a natural gas discovery, with two zones successfully production tested. The first zone tested natural gas on a restricted basis at high pressure rates averaging between 40 and 45 mmcf/d; and, the second zone, which was tested independently and separate from the first zone, tested natural gas on a restricted basis at high pressure rates averaging in excess of 30 mmcf/d;

- On March 26, 2008, Canadian Superior closed the acquisition of Seeker Petroleum Ltd. for a consideration of $51.2 million. Through the acquisition Canadian Superior acquired approximately 1,035 BOE/d (72% natural gas, 28% oil & liquids), approximately 2,073 MBOE of proven plus probable reserves and approximately 1,297 MBOE additional possible reserves, 55,385 net acres of undeveloped land and 102 sq. km of proprietary 3D seismic;

- On February 20, 2008, Canadian Superior along with its partners, BG International Limited ("BG"), a wholly owned subsidiary of the BG Group plc (LSE:BG.L) and Challenger Energy Corp. ("Challenger") (TSX VENTURE:CHQ)(AMEX:CHQ) successfully spudded the "Bounty" well on the "Intrepid" Block 5(c), offshore Trinidad, with the Kan Tan IV semi-submersible drilling rig. The "Bounty" well is located approximately 2.2 miles from the recently announced "Victory" well natural gas discovery;

- Average daily production for Q1 2008 was 3,110 boe/d, up 7% or 213 boe/d compared to Q1 2007, with a Q1 2008 exit rate of 4,350 boe/d;

- Drilled 6 gross (5.0 net) wells during the period, resulting in 3 gross (2.6 net) natural gas and 3 gross (2.4 net) oil wells, all currently being evaluated;

- Petroleum and natural gas revenues (net of transportation) were $15.9 million or $56.29/boe in Q1 2008 compared to $12.6 million or $48.31/boe in Q1 2007;

- Cash flow from operations were $9.2 million or $32.49/boe in Q1 2008 compared to $6.5 million or $24.81/boe in Q1 2007; and

- Net debt at March 31, 2008 was $11.3 million or 0.68:1 on net debt to twelve month trailing cash flow from operations.

Speaking today, Craig McKenzie, Canadian Superior's Chief Executive Officer, said "Our corporate objective is to remain focused on adding shareholder value with high impact offshore exploration in Trinidad, combined with growing cash flow from Western Canada. We are pleased to report that in the First Quarter of 2008 our average daily production, oil and gas revenues and cash flow from operations have all increased over the same period in 2007. We expect for the remainder of this year will be very exciting and rewarding for Canadian Superior shareholders."



Financial and Operational Highlights

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March 31 2008 2007 % Change
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Financial
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($000's except per share amounts)
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Petroleum and Natural Gas Sales 15,932 12,598 27%
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Cash Flow from Operations 9,194 6,470 42%
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Per Share 0.07 0.05 40%
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Net loss (1,863) (129) 1,344%
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Per Share (0.01) (0.00) 0%
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Capital Expenditures 11,992 12,319 -3%
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Nova Scotia Off-Shore Deposits 14,559 14,925 -2%
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Net Asset (Debt) (11,319) (7,312) 54%
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Shares Outstanding at period end 148,609 131,960 13%
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Operating
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Average Production
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Natural Gas (mcf/d) 15,123 13,984 8%
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Oil and NGL's (bbls/d) 590 566 4%
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boe/d 3,110 2,897 7%
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Average Selling Price
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Natural Gas ($/mcf) 8.14 7.71 6%
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Oil and NGL's ($/bbl) 88.02 56.81 55%
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Total ($/boe) 56.29 48.32 16%
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Gross Undeveloped Land (Acres)
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Offshore Trinidad and Tobago 135,041 135,041 0%
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Offshore Nova Scotia 1,234,546 1,234,546 0%
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Western Canada 309,040 131,747 135%
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Wells Drilled
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Gross 6.0 8.0 -25%
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Net 5.0 7.1 -30%
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Operational Update

Trinidad and Tobago

In January 2008, Canadian Superior announced a large natural gas discovery in Trinidad. Successfully drilled its "Victory" well, "Intrepid" Block 5(c), offshore Trinidad, a natural gas discovery; with two zones successfully production tested. The first zone tested natural gas on a restricted basis at high pressure rates averaging between 40 and 45 mmcf/d; and, the second zone, which was tested independently and separate from the first zone, tested natural gas on a restricted basis at high pressure rates averaging in excess of 30 mmcf/d. The combined two zones could produce natural gas at estimated rates of over 100 mmcf/d, with the first zone being condensate rich.

On February 20, 2008, the Company successfully spudded the "Bounty" well with the Kan Tan IV semi-submersible drilling rig. The rig had moved approximately 2.2 miles from the "Victory" well. The "Bounty" well is planned to be drilled to a total vertical depth of approximately 18,000 feet subsea in about 1,000 feet of water and is expected to take about 110 days to drill. It is expected that the "Bounty" well and the third well, "Endeavour" will both be drilled and evaluated by year end 2008.

On May 7, 2008 the Company reported that the Bounty well was poised to reach final Total Depth ("TD") of about 18,000 feet in approximately 30 days. The Company just completed drilled the 12-1/4" hole section in the well to a total depth of 14,415 feet subsea. The primary objective of the Bounty well is to prove up the presence of potential multi-TCF reservoirs which are deeper, and higher pressure then the Victory discovery.

The Company also continues to prepare for the first phase of operations on its Mayaro/Guayaguayare ("M/G") "Tradewinds" project with its joint venture partner, the Petroleum Company of Trinidad and Tobago Limited ("Petrotrin").This joint venture encompasses two near-shore Blocks (58,080 gross acres) off the east coast of Trinidad where management hopes to establish significant oil reserves in the heart of a known producing hydrocarbons-bearing structural trend. For the M/G Block, the Company is designing a seismic program to evaluate the near-shore block and is planning this program to be shot in 2008 or early 2009 where we intend to drill two offshore wells on the M/G Block prior to year end 2009.

Offshore Nova Scotia, Canada

Canadian Superior is one of the few operators involved in all three main play types in the offshore Nova Scotia basin where the Company has evolved as the company holding the largest exploration acreage position with 100% interests in five exploration licences totaling 1.23 million net acres at March 31, 2008. Canadian Superior relinquished EL2412 and EL2413 at the end of 2007 and currently holds the following exploration licenses "Mayflower" (EL2406), "Marauder" (EL2415), "Marconi" (EL2416), "Mariner" (EL2409) and "Marquis" (EL2402) exploration blocks. In addition to the prospects identified on EL2409, EL2406 and EL2402, Canadian Superior has identified several large Cretaceous and Jurassic prospects on its 100% "Marauder" and 100% "Marconi" exploration lands which cover 370,890 acres offshore Nova Scotia, offsetting the Sable Island area. The "Marauder" lands directly offsets three significant discovery licences and have several seismically defined prospects, two of which lie on trend with significant discoveries near existing production infrastructure. The "Marconi" licence has a seismically defined tilted fault / anticlinal prospect similar to other Sable area fields.

Canadian Superior's "Mariner" shallow water block (EL2409) covers 100,656 acres and is located approximately nine kilometres northeast of Sable Island, offshore Nova Scotia and directly offsets five significant discoveries near Sable Island, including the ExxonMobil Venture natural gas production field and other nearby Sable Offshore Energy Project existing production infrastructure. Two new prospective locations have been identified and further drilling is planned by Canadian Superior on the "Mariner" Block in 2009. Front end geological and geophysical analyses are complete and environmental approvals are in place.

Western Canada

On March 27, 2008, the Company closed the acquisition of Seeker Petroleum, by acquiring all of the issued and outstanding shares for total consideration of approximately $51.8 million, including the assumption of approximately $8.5 million of debt. Canadian Superior acquired approximately 1,035 boe/d of Western Canadian production and 2,073 MBOE of proven plus probable reserves, including 102,000 gross (55,400 net) acres of undeveloped land.

The Company drilled and cased six wells (5.0 net) in the first quarter of 2008, including three gross (2.6 net) gas and three gross (2.4 net ) oil wells, along with a seventh well, from the Seeker assets, which was rig released in April 2008. The Company has planned two 3D seismic programs for winter 2008 that total 73 square kilometers, along with a third program to evaluate Seeker's acreage. The Company's comprehensive 2008 drilling plan continues to be adjusted to rank and prioritize the combined companies drilling portfolios.

Subsequent to the end of Q1, in April 2008, Canadian Superior closed the acquisition of Fair Sky Resources assets through a receivership process, adding over 70,000 acres of additional undeveloped land to Canadian Superior's holdings.

Canadian Superior is a Calgary, Alberta, Canada based oil and gas exploration and production company with operations Offshore Trinidad and Tobago, Offshore Nova Scotia, Canada and in Western Canada. See Canadian Superior's website at www.cansup.com to review Canadian Superior's operations in Western Canada, Offshore Trinidad and Tobago and Offshore Nova Scotia interests. Canadian Superior has approximately 20,000 shareholders worldwide, including some of the top institutional shareholders in North America.

Canadian Superior is paying 26-2/3% of the Block 5(c) exploration program cost to maintain a 45% working interest in Block 5(c), with its partners, BG International Limited, a wholly owned subsidiary of the BG Group plc, paying approximately 40% for a 30% working interest and Challenger Energy Corp. paying 33-1/3% for a 25% working interest through Canadian Superior.

BG Group plc (LSE:BG.L) is a world leader in natural gas, with a strategy focused on connecting competitively-priced resources to specific, high-value markets. Active in 27 countries on five continents, BG Group has a broad portfolio of exploration and production, Liquefied Natural Gas (LNG), transmission and distribution and power generation business interests. It combines a deep understanding of gas markets with an excellent track record in finding and commercializing reserves. See www.bg-group.com for information on BG Group plc.

Challenger Energy Corp. is a Calgary, Alberta, Canada based oil and gas exploration company which is currently focusing on "high impact" oil and gas plays offshore Trinidad and Tobago and offshore Nova Scotia. See www.challenger-energy.com for information on Challenger.

This news release contains forward-looking information, including estimates, projections, interpretations, prognoses and other information that may relate to current, past or future production, development(s), testing, well test results, project start-ups and future capital spending. Current, past and/or future actual results and/or reported results, estimates, projections, interpretations, prognoses, well results, test results, reserves, production, resource and/or resource potential, development(s), project start-ups, and capital spending, plans and/or estimated results could differ materially due to changes in project schedules, operating performance, demand for oil and gas, commercial negotiations or other technical and economic factors or revisions. This news release may contain the reference to the terms discovery, reserves and/or resources or resource potential which are those quantities estimated to be contained in accumulations. There is no certainty that any portion of these accumulations or estimated accumulations in this news release may not change materially; and that, if discovered, in any discovery, the accumulations or estimated accumulations may not be economically viable or technically feasible to produce.

Statements contained in this news release relating to estimates, results, events and expectations are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements involve known and unknown risks, uncertainties, scheduling, re-scheduling and other factors which may cause the actual results, performance, estimates, projections, interpretations, prognoses, schedules or achievements of the Corporation, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such statements. Such factors include, among others, those described in the Corporations' annual reports on Form 40-F or Form 20-F on file with the U.S. Securities and Exchange Commission.

Contact Information

  • Canadian Superior Energy Inc.
    Investor Relations
    (403) 294-1411
    (403) 216-2374 (FAX)
    Website: www.cansup.com
    or
    Canadian Superior Energy Inc.
    Suite 2700, 605 - 5th Avenue S.W.
    Calgary, Alberta
    Canada T2P 3H5