In his affidavit submitted to the Court on Monday August 10, 2009,Richard Watkins

stated the following concerning the “Settlement Agreement” that has been reached

between the management of Canadian Superior Energy and PAI.

http://relieffromdebt.ca/documents/cse/Affidavit%20of%20Richard%20Watkins%20-%20August%2010,%202009.pdf

11. CSEI and PAI have now entered into a Settlement Agreement effective August 5, 2009

(The Settlement Agreement).A copy of the Settlement Agreement is attached hereto

and marked as Exhibit “A”.The terms of the Settlement Agreement include, inter alia:

a. an agreement that CSEI, its board of directors, and management will,at the ASM

[Annual Special Meeting] , nominate for election to the board of directors a specific

restricted slate of individuals (the “Proposed Board”).

b. within 30 days from exiting CCAA protection,CSEI will pay to PAI a sum not

exceeding $200,000 USD to reimburse PAI for expenses incurred by it in recruiting

prospective new directors of CSEI, and a further sum not to exceed $510,000 USD

with respect to legal costs incurred by PAI;

c. approval by the present board of directors of CSEI of an amendment to delete the

requirement in its By-laws that one half of the board of directors be resident

Canadians and replacing it with a provision requiring that 25%of the board of

directors be resident Canadians; and

d. CSEI will obtain Monitor and Court approval of the Settlement Agreement.

12. The slate of individuals making up the Proposed Board are Dr. William Roach;Dr. James M. Funk;Kerry R. Brittain; Marvin M. Chronister; Gregory Turnbill; and myself. Each ofthese individuals, with the exception of Gregory Turnbill, and myself , was recruited by PAI.A summary of the resumes of the members of the Proposed Board, excluding myself,is hereto attached and marked as Exhibit “B”.As appears from such resumes, the Proposed Board will bring a wealth of experience, contacts, and stature to CSEI and CSEI believes that the Proposed Board will be well qualified to lead it upon exiting these CCAA proceedings.

13. the Proposed Board is acceptable to the bank with which CSEI is currently negotiating an exit financing facility.I verily believe that the Proposed Boardwill also be recognized and accepted by the shareholders of CSEI as a very strong, independent, and competent board of directors. In the circumstances, the Independent Committee of the present board of directors of CSEI believes the Settlement Agreement is in the best interest of CSEI.

14. I am informed by counsel for CSEI that the Monitor supports the Settlement Agreement.

15. At a board of directors’ meeting held on August 7, 2009, the execution of the Settlement Agreement was authorized and the Canadian residency requirement in CSEI’s By-Laws was amended to require 25% of the board of directors to be resident Canadians.

Appendix B

Kerry R. Brittain

Mr. Brittain is currently in private law practice advising companies on acquisitions and domestic and international transactions.From 2002 to 2007, he served as Senior Vice President , General Counsel and Corporate Secretary for Harvest Natural Resources. From 2002 to 2002, he was Vice President ,General Counsel & Secretary for Timera Inc. and Transentric LLC., privately held start-up software development and distribution companies.His previous 24 years were with Union Pacific Resources where he served in various roles within the Legal Department, ultimately as Vice President , General Counsel & Corporate Secretary.Mr. Brittain holds a BA in Political Science from the University of Wyoming and earned his JD with honours at the University of Wyoming College of Law.

Marvin M. Chronister

Mr. Chronister is an energyfinance and operations consultant with over 30 years of Progressive industry experience.From 2000 to 2009, he served on the Board of Directors of Saratoga Resources, a publicly held independent exploration company, where he was Audit Committee Chairman and on the Compensation Committee. From 2004 to 2006, Mr. Chronister was Financial Compensation Practice Director for Jefferson Wells.His prior experience includes Managing Director Corporate Finance with Deloitte & Touche as well as Energy Investment Banking roles With both Kidder Peabody and Merrill Lynch.Mr. Chronister held earlier senior management positions with Transwestern Investments, Kiddie Corporation, and NL Industries.His previous board experience includes Harken Energy Corporation, Creel Energy Corporation, Resource Development Corporation, Transwestern Investments, and Electra Marine Inc.Mr. Chronister earned his BBA from Stephen F. Austin State University.

Dr. James Funk

Dr. Funk is an independent consultant and producer with over 30 years of experience in the energy industry.He served as Senior Vice President of Equitable Resources and President of Equitable Production Company from June 2000 until January 2003.Previously he worked for 23 years at Shell Oil Company in senior management and technical positions. Dr. Funk currently serves as a Director of Range Resources, an independent oil and gas company, and Superior Energy Services, a public oil services company headquartered in New Orleans.He has previously served on the Boards of Westport Resources (2003-2008).Dr. Funk received an A.B degree in Geology from Wittenberg University, and MS in Geology from the University of Connecticut, and a PhD in Geology from the University ofKansas.He is a certified Petroleum Geologist.

Dr. William Roach

Dr. William Roach joined UTS Energy Inc. in June 2004 and is currently UTS’sPresident and Chief Executive Officer.UTS is a Canadian company developing bitumen reserves fromoilsands deposits in the companies Fort Hills, Equinox, and Frontier projects.Dr. Roach has a successful 25-year track record directing and managing the design, construction and delivery of large capital intensive national and international upstream oil and gas projects.From 2000 to 2004, he served as General Manager of East Coast Development for Husky Energy where he directly managed the multi-billion dollar White Rose FPSO project.From 1996 to 2000, Dr. Roach was Vice President of Projects with British Borneo USA Inc. where he established and managed their deepwater Gulf of Mexico presence and led the development of two new Tension Leg Platform projects ;Dr. Roach was with Shell from 1984 through 1996 where he executed on numerous large-scale projects in the North Sea and West Africa.He is a Professional Engineer in Canada and the UK and holds a BSc in Metallurgy and a PhD in Physical Metallurgy.From 2004 through 2007 Dr. Roach also acted as Governor of the Canadian Association of Petroleum Producers (CAPP)

Gregory G. Turnbull

Mr. Turnbull has been a partner with the law firm of McCarthy Tetrault since July 2002 , and currently serves as the Regional Managing Partner of the Calgary office.Mr. Turnbull startedhis career with the law firm of MacKimmie Matthews in 1979. From 1987 to 2001, he was a partner with Gowlings LLP (formerly Code Hunter LLP). In 2001 and 2002 he was a partner with the law firm of Donahue LLP.Mr. Turnbull is currently a director of Storm Exploration Inc. Heritage Oil plc;,BNP Resources Inc.,Action Energy Inc., Ammonite Energy Ltd., Hawk Exploration Ltd., Seaview Energy Inc., and Crescent Point Energy Corp. all publicly traded entities on the TSX or the TSXV.Through out his career he has served as an officer or director of:Baytex Energy Ltd., Barrington Petroleum Ltd., Castle Rock Petroleum Ltd., Flagship Energy Ltd., Hawk Oil Inc., Hawk Energy Inc., Kensingtom Energy Ltd., Lexxor Energy Inc., Newquest Energy Inc., Mannville Oil and Gas Ltd.,Seventh Energy Lts., Tri-X Oil and Gas Ltd., Trigas Exploration Ltd., Trimox Energy Ltd., and Westward Energy Inc.Mr. Turnbull received his BA (honours) from Queens University in 1976 and his LLB from the University of Toronto in 1979.He was called to the Alberta bar in 1980. Mr.Turnbull is a member of the Law Society of Alberta, the Canadian Bar Association and the Calgary Bar Association.

Richard M. Watkins

Mr. Watkins is currently a director of Canadian Superior Energy and he has been on the board of directors since May 2006. His principal occupation is listed as an energy consultant and he lives in Houston, Texas.

I have been a shareholder of share of Canadian Superior Energy continuously since 2002. I feel that Canadian Superior is in the process of being raped by PAI. The so called “Settlement Agreement” is an outrage to the small retail investors of Canadian Superior Energy who own the majority of shares in Canadian Superior Energy. I am appalled by the fact that PAI has blackmailed and dictated and imposed its “Proposed Board of Directors” on the current management ofCanadian Superior Energy.To make matters worse, PAI is making the retail shareholders pay for the recruitment of this board which we never asked for. PAI has also imposed a “specific restricted slate of individuals” to stand for electionat the ASM on September 15th for we the shareholders to vote on.This is not a democratic election as nobody else is being allowed to be put forward for the retail shareholders to vote on. In addition, PAI has imposed on Canadian Superior’s management a change in the By-Laws governing the company so that only 25% of the Proposed Board of Directors now need to be resident in Canada. This also is not democratic.Canadian Superior is a Canadian Energy company which according to PAI’s form of American democracy is to be run by an American management team.

Personally I will only vote for Mr. Gregory G. Turnbull , Dr. William Roach , and Dr. James Funk to be on the Board ofDirectors on September 15th as they alone have relevant qualifications to be on the Board. If I cannot vote for them separately I will be voting against the “Proposed Management Team”.

I am not interested in a list of things that these people have done in the past. I want to know what they will do? Will they sell Canadian Superior’s western basin gas wells. Will they sell BG another 5% of Bloc 5(c) in Trinidad.Will they cancel plans for drilling in Libya? Will they cancel plans to drill off Canada’s East Coast? Will they cancel the Excalibur LNG project in New Jersey? Will they cancel the M/G project in Trinidad?

Best Wishes;Scott