Castleguard Energy Reports Improved First Quarter Operating Performance.

Energy Editors/Business Editors

DALLAS--(BUSINESS WIRE)--May 9, 2003

Dallas-based Castleguard Energy (OTCBB:MOAT) reported earnings for the first quarter ended March 31, 2003, of $60,228 ($0.00 per share) -- a significant increase compared to earnings of $13,485 ($0.00 per share) for the year 2002.

A sharp increase in energy prices boosted revenues and earnings in the quarter. Average natural gas prices rose to $6.17 per Mcf compared to $2.36 per Mcf in 2002. Crude oil prices were also up sharply to $32.12 per barrel this year versus $19.26 per barrel last year. Crude oil production more than doubled during the period.

"We are pleased that energy prices have improved significantly, both for natural gas and crude oil, and we believe prices will remain firm for the remainder of 2003, especially for natural gas," Scott Heape, Castleguard Chairman, said. "In this market environment we plan to be as active as our capital and risk parameters allow."

A combination of higher prices and higher crude oil sales during the first quarter more than offset the effect of a decline in natural gas sales. Natural gas production declined 67% compared to the first quarter of last year as a result of well workovers to cure mechanical problems. Although workovers were successful, the level of natural gas production is currently less than formerly experienced.

Castleguard Energy holds working interests in properties located in Texas, Louisiana and Alabama. Castleguard focuses on development projects, joint working relationships and non-operated properties.

This report includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Although Castleguard believes that its expectations are based on reasonable assumptions, it can give no assurance that its goals will be achieved. Important factors that could cause actual results to differ materially from those in the forward-looking statements include political developments in foreign countries, federal and state regulatory developments, the timing and extent of changes in commodity prices, the timing and extent of success in drilling, discovering, developing and producing or acquiring oil and gas reserves, and conditions of the capital and equity markets during the periods covered by the forward-looking statements. Castleguard's periodic reports filed with the Securities and Exchange Commission include a discussion of important factors that could cause actual results to differ materially from those indicated in forward-looking statements.

                          CASTLEGUARD ENERGY
                        FINANCIAL & OPERATING
                              HIGHLIGHTS


                                                      Three Months
                                                     Ended March 31
                                                       (unaudited)

                                                     2003      2002
                                                   --------- ---------

INCOME STATEMENT DATA

          Oil and gas revenue                      $190,789  $169,425
                                                   --------- ---------

          Lease operating expenses and taxes         22,563    29,324
          Depreciation, depletion and amortization   28,123    60,897
          General and administrative                 45,267    52,214
                                                   --------- ---------
                                                     95,953   142,435
                                                   --------- ---------

          Income from operations                     94,836    26,990

          Interest and financing costs                7,608     7,725
                                                   --------- ---------

          Income before income taxes                 87,228    19,265

          Income taxes                               27,000     5,780
                                                   --------- ---------

          Net income                                $60,228   $13,485
                                                   ========= =========

          Basic and diluted earnings per share        $0.00     $0.00

          Weighted average shares outstanding
             (Thousands)                             17,365    17,241


SALES VOLUMES

          Natural gas (Mcf)                          21,978    66,668
          Crude oil (Bbls)                            1,290       625


AVERAGE SALES PRICE

          Natural gas (per Mcf)                       $6.77     $2.36
          Crude oil (per Bbl)                        $32.12    $19.26