The following information is contained in a seven page equity research report by Thomas Weisel Partners dated February 17, 2009 and gives their latest analysis on the Intrepid Block 5(C) situation. The following quotation comes from page 2 of the report and while it specifically is an analysis of Challenger Energy's current position it is obviously important to Canadian Superior share holders.

"With drilling operations on the third and last well, Endeavour, taking longer than anticipated we believe Challenger may ultimately owe up to US$40 million to Canadian Superior, including an outstanding $14 million bridge loan that Challenger needs to repay to Canadian Superior by the end of February. Resource Potential of Block Significant: Testing of the third and last exploration well, Endeavour, was set to commence last weekend. The primary reservoir horizon, the I-sand, has been successfully encountered in both the previous Bounty well and the current Endeavour well. Should the current test program on Endeavour confirm not only high well productivity from this horizon but also connectivity between the two structures, the areal extent, and thus risked resource potential, of this key gas sand, highly productive on BG's adjacent Dolphin Deep gas field, could increase substantially beyond our current Block 5(c) unrisked and risked recoverable resource estimates of 4.7 tcf and 2.9 tcf respectively. Substantial Increase in Equity Dilution: To fund its outstanding financial commitments, we had previously assumed an equity raise of US$30 million at approximately C$1.00/share. The dramatic fall in the share price combined with higher estimated costs imposes substantially more equity dilution, reflecting an assumed US$40 million equity financing at just C$0.40/share, resulting in a substantially lower risked NAV of C$1.56/share (from C$3.11). Financial Risks Now Dominate Commercial Value of Block 5(c): We believe that the Victory and Bounty gas discoveries already ensure the commercial viability of Block 5(c). Testing success at Endeavour can only underpin the future economic development of Block 5(c), in our view, and may well result in an increased resource base and thus a high risked NAV. However, in our view Challenger now faces two critical and substantial hurdles: 1) ensuring that it meets all its outstanding financial commitments and thus secures title to its 25% interest in Block 5(c); and 2) securing broad third-party interest in the proposed sales process to maximize shareholder value. We believe that Canadian Superior's proposed sale of a 25% or more interest in Block 5(c) in parallel to Challenger's own sale process, coupled with the rare intervention of a court-appointed Receiver as joint operator of the block, can only serve to complicate and potentially devalue Challenger's own sale process. Although in theory a third-party could now secure a majority ownership position in Block 5(c), BG, as a partner within the block, has the right to match any such external offer. In addition, we believe that the appointment of a Receiver probably narrows the likely field of bidders, thus diminishing the Challenger's chances of securing a broad auction and delivering fair value to its shareholders. Lowering Price Target and Downgrading Rating: We do not question the ultimate resource potential and commercial value of Block 5(c). We do however believe that there is now a high risk that Challenger fails to either raise the required funding in a timely manner to secure its 25% interest in the block, or generate sufficient third-party interest to secure fair value for its 25% interest in the block.

We are therefore downgrading our rating to Market Weight and lowering our price target to

C$0.50/share (from $3.00/share)."

http://www.challenger-energy.com/PDF...

Cheers; Scott