Castleguard Energy Reports Significant Improvement in Third Quarter Earnings.

Business Editors

DALLAS--(BUSINESS WIRE)--Jan. 3, 2001

Castleguard Energy, Inc. (OTCBB:MOAT), a Dallas-based independent oil and gas company, reports earnings of $95,964 for the third quarter ended September 20, 2000, compared to a loss of ($18,807) for the same period last year.

For the nine months ended September 30, 2000, earnings totaled $116,419 compared to a loss of ($165,051) for the first nine months of 1999.

Castleguard Chairman Scott Heape said that increased production volumes and higher natural gas prices were the primary factors in Castleguard's improved performance.

"Higher production volumes were the result of a new well in the Minden Field-Louisiana, completed in the first quarter 2000, combined with additional interests acquired during the third quarter of 2000," Heape said.

Natural gas is the dominant hydrocarbon in the Minden Field and Castleguard's share of production volumes for the third quarter 2000 were 25,676 MCF compared to 1,381 MCF for the third quarter of last year. Natural gas prices improved on average to $4.69 MCF vs $3.53 MCF in the same period last year, Heape said.

Lower general and administrative expenses in 2000 also contributed to improved results, but the impact of these reductions was partially offset by higher interest expenses. "Interest is attributable to the bank financing completed in the third quarter 2000 to finance the acquisition of additional Minden Field interests," Heape said.

Castleguard Energy, Inc. (OTCBB Symbol MOAT) is an independent oil and gas company headquartered in Dallas. The organization 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.