This news does not look good for SNG at this point in time. CCAA prtection prevents SNG from getting its money back for the bridge loan from Challenger quickly and SNG needs the money now. On the other hand, Challenger has no money to pay its share of the Endeavour flow testing or the bridge loan and CAA protection will prevent its debts being paid until Challenger is sold. Tricky legal issues arise because as we've discussed before. Until Challenger pays what it owes to SNG, Challenger does not own 25% of Block 5(C).

Best Wishes; Scott

News from Marketwire

Challenger Energy Corp. Obtains Court Order for CCAA Protection

21:35 EST Friday, February 27, 2009

CALGARY, ALBERTA--(Marketwire - Feb. 27, 2009) - Challenger Energy Corp. ("Challenger" or "Company") (TSX VENTURE:CHQ) (NYSE Alternext US:CHQ) announces that it obtained an order today from the Court of Queen's Bench of Alberta, Judicial District of Calgary for protection under the Companies' Creditors Arrangement Act (Canada). Alger & Associates Inc. was appointed monitor under the order. Subject to the order, proceedings by creditors and others cannot be continued or commenced without the consent of Challenger and the monitor, or leave of the court. A copy of the order will be made available on the monitor's website.

The order permits Challenger to remain in possession and control of its property, carry on its business, retain employees and other service providers and continue with its previously announced process to evaluate the various strategic alternatives available to the Company, including a sale of Challenger or its assets. A special committee of directors was appointed to oversee this process and Peters & Co. Limited was retained as financial advisor.