|-----------------------           
|----------------------------------
|                                  
|UNITED STATES                     
|SECURITIES AND EXCHANGE COMMISSION
|Washington, D.C. 20549            
|                                  
|FORM 10-QSB                       
|                                  

|[X]  | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 
For the Quarterly Period Ended September 30, 2002
|---- | ------------------------------------------------------------------------------------------------------------------------------------------
|     | OR                                                                                                                                        
|[  ] | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Transition Period from  to               
|     |                                                                                                                                           



|COMMISSION FILE NUMBER: 0-5525                                                        
|--------------------------------------------------------------------------------------
|                                                                                      
|CASTLEGUARD ENERGY, INC.                                                              
|(Exact name of Registrant as specified in its charter)                                
|                                                                                      
|Florida
(State or other jurisdiction of 
of incorporation or organization)            
|                                                                                      
|4625 Greenville Avenue, Suite 203, Dallas, TX
(Address of principal executive offices)
|                                                                                      
|(214) 361-1755                                                                        
|(Registrant's telephone number, including area code)                                  
|                                                                                      
|Securities registered pursuant to Section 12(b) of the Act: NONE                      
|                                                                                      



|Securities registered pursuant to Section 12(g) of the Act:                                                                                                                                                                                                                                                 
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Common Stock Without Par Value                                                                                                                                                                                                                                                                              
|(Title of Class)                                                                                                                                                                                                                                                                                            
|                                                                                                                                                                                                                                                                                                            
|Check whether the issuer (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
|                                                                                                                                                                                                                                                                                                            
|                                                                                                                                                                                                                                                                                                            
|At September 30, 2002, there were 17,284,626 Common shares outstanding.                                                                                                                                                                                                                                     
|______________________________                                                                                                                                                                                                                                                                              
|                                                                                                                                                                                                                                                                                                            
|Transitional Small Business Disclosure Format (check one):           Yes [   ]      No  [X]                                                                                                                                                                                                                 





|CASTLEGUARD ENERGY, INC.
|------------------------
|                        
|INDEX                   
|                        
|Part 1.                 
|                        
|Item 1.                 
|                        
|                        
|                        
|                        
|                        
|                        
|                        
|                        
|                        
|                        
|                        
|                        
|                        
|Item 2.                 
|                        
|Item 3.                 
|                        
|Part II.                
|                        
|Item 1.                 
|                        
|Item 2.                 
|                        
|Item 3.                 
|                        
|Item 4.                 
|                        
|Item 5.                 
|                        
|Item 6.                 
|                        
|                        
|                        
|                        
|                        
|2                       







|Item 1. FINANCIAL STATEMENTS
|----------------------------
|                            
|                            





|REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|Board of Directors                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|Castleguard Energy, Inc.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|We have reviewed the accompanying balance sheet of Castleguard Energy, Inc. as of September 30, 2002, and the related statements of income for the three and nine months periods and stockholders' equity and cash flows for the nine month period then ended. These financial statements are the responsibility of the Company's management.                                                                                                                                                                                                                                                                
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of analytical procedures applied to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.        
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|Based on our reviews, we are not aware of any material modifications that should be made to the accompanying financial statements in order for them to be in conformity with accounting principles generally accepted in the United States of America.                                                                                                                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|We have previously audited, in accordance with generally accepted auditing standards, the balance sheet of Castleguard Energy, Inc. as of December 31, 2001, and the related statements of earnings and cash flows for the year then ended (not presented separately herein) , and in our report dated March 18, 2002, we expressed an unqualified opinion on those financial statements. In our opinion, the information set for the in the accompanying balance sheet as of December 31, 2001, is fairly stated, in all material respects, in relation to the balance sheet from which it has been derived.
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|Whitley Penn                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|Dallas, Texas                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|November 13, 2002                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|3                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            





|CASTLEGUARD ENERGY INC.
|-----------------------
|                       
|                       
|BALANCE SHEETS         
|                       

|                                         |                                                                          |                            |          |           |           |                    |           |  |                  
|---------------------------------------- | ------------------------------------------------------------------------ | -------------------------- | -------- | --------- | --------- | ------------------ | --------- |  | -----------------
|                                         |                                                                          |                            |          |           |           | September 30,
2002 |           |  | December 31,
2001
|                                         |                                                                          |                            |          |           |           | (Unaudited)        |           |  | (Audited)        
|ASSETS                                  
|                                         |                                                                          |                            |          |           |           |                    |           |  |                  
|Current assets:                          |                                                                          |                            |          |           |           |                    |          
|                                         | Cash                                                                     | $                          | 71,550   |           | $         | 99,979            
|                                         | Accounts receivable                                                      |                            |          | 158,179   |           |                    | 146,877  
|                                         |                                                                          | Total current assets       |          | 229,729   |           |                    | 246,856  
|                                         |                                                                          |                            |          |           |           |                    |           |  |                  
|Petroleum and natural gas interests, net |                                                                          | 1,414,489                  |          |           | 1,459,384
|                                         |                                                                          |                            |          |           |           |                    |           |  |                  
|Deferred debt issue cost, net            |                                                                          | 21,263                     |          |           | -        
|                                         |                                                                          |                            |          |           |           |                    |           |  |                  
|TOTAL ASSETS                             |                                                                          |                            | $        | 1,665,481 |           | $                  | 1,706,240
|                                         |                                                                          |                            |          |           |           |                    |           |  |                  
|                                         |                                                                          |                            |          |           |           |                    |           |  |                  
|LIABILITIES & STOCKHOLDERS' EQUITY      
|                                         |                                                                          |                            |          |           |           |                    |           |  |                  
|Current liabilities:                     |                                                                          |                            |          |           |           |                    |          
|                                         | Accounts payable and accrued liabilities                                 | $                          | 47,507   |           | $         | 83,880            
|                                         | Current portion of long-term debt                                        |                            | 260,004  |           |           | 238,337           
|                                         |                                                                          | Total current liabilities  |          | 307,511   |           |                    | 322,217  
|                                         |                                                                          |                            |          |           |           |                    |           |  |                  
|Long-term debt, less current portion     |                                                                          | 200,666                    |          |           | 367,078  
|Accrued stock to be issued               |                                                                          | -                          |          |           | 7,315    
|Deferred income taxes                    |                                                                          | 103,834                    |          |           | 61,000   
|                                         |                                                                          |                            |          |           |           |                    |          
|TOTAL LIABILITIES                        |                                                                          | 612,011                    |          |           | 757,610  
|                                         |                                                                          |                            |          |           |           |                   
|Stockholders' equity:                    |                                                                          |                            |          |           |          
|                                         | Common stock, $0.001 par value,                                          |                            |          |           |           |                   
|                                         | 50,000,000 shares authorized; 19,146,626 
  and 19,013,626 shares issued |                            | 19,147   |           |           | 19,014            
|                                         | Paid-in capital                                                          |                            | 965,824  |           |           | 958,643           
|                                         | Retained earnings                                                        |                            | 124,499  |           |           | 26,973            
|                                         | Less: Treasury stock, 1,862,000 shares at cost                           |                            | (56,000) |           |           | (56,000)          
|                                         |                                                                          | Total stockholders' equity |          | 1,053,470 |           |                    | 948,630  
|                                         |                                                                          |                            |          |           |           |                    |           |  |                  
|TOTAL LIABILITIES & STOCKHOLDERS' EQUITY | $                                                                        | 1,665,481                  |          | $         | 1,706,240
|                                         |                                                                          |                            |          |           |           |                    |           |  |                  
|4                                       



|CASTLEGUARD ENERGY INC.                                                  
|-------------------------------------------------------------------------
|                                                                         
|STATEMENTS OF INCOME                                                     
|(Unaudited)                                                              
|                                                                         
|                                                                         
|                                                                         
|Oil and gas Revenues                                                     
|                                                                         
|Expenses:                                                                
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|Income from operations                                                   
|                                                                         
|Interest and financing costs                                             
|                                                                         
|Income before income taxes                                               
|Provision for income taxes                                               
|                                                                         
|Net income                                                               
|                                                                         
|Basic earnings per common share                                          
|                                                                         
|Weighted average number of common
             shares outstanding (000's)
|                                                                         
|5                                                                        





|CASTLEGUARD ENERGY INC.                             
|----------------------------------------------------
|                                                    
|STATEMENTS OF CASH FLOWS                            
|(Unaudited)                                         
|                                                    
|                                                    
|                                                    
|                                                    
|Cash Flows from Operating Activities:               
|                                                    
|                                                    
|                                                    
|                                                    
|                                                    
|                                                    
|                                                    
|                                                    
|                                                    
|Net cash provided by operating activities           
|                                                    
|Cash Flows from Investing Activities:               
|                                                    
|                                                    
|Net cash used in investing activities               
|                                                    
|Cash Flows from Financing Activities:               
|                                                    
|                                                    
|Net cash used by financing activities               
|                                                    
|Net increase (decrease) in cash and cash equivalents
|Cash and cash equivalents, beginning of period      
|Cash and cash equivalents, end of period            
|                                                    
|                                                    
|                                                    
|                                                    
|6                                                   





|CASTLEGUARD ENERGY INC.                    
|-------------------------------------------
|                                           
|STATEMENTS OF STOCKHOLDERS' EQUITY         
|(Unaudited for year 2002 first nine months)
|                                           
|                                           
|                                           
|                                           
|                                           
|                                           
|Balance, December 31, 2000                 
|                                           
|Issuance of stock accrued                  
|                                           
|Issuance of stock for services             
|                                           
|Net income                                 
|                                           
|Balance, December 31, 2001                 
|                                           
|Issuance of stock                          
|to settle litigation                       
|                                           
|Net income                                 
|                                           
|Balance, June 30, 2002                     
|                                           
|7                                          





|CASTLEGUARD ENERGY, INC                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|NOTES TO FINANCIAL STATEMENTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|Note 1 - Future Operations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|The Company's financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company is in the process of growing through the acquisition of oil and gas interests. The Company intends to finance this growth through future cash flow, the issuance of common stock and debt. Future growth may be limited by the extent of internally generated cash flow, the Company's ability to obtain financing from share issuances and debt to finance future expansion of working interests.
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|Note 2 - Summary of Significant Accounting Policies and Practices                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|(a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|(b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|(c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|(d)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|8                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         



|CASTLEGUARD ENERGY, INC                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|NOTES TO FINANCIAL STATEMENTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Note 3 - Long-Term Debt                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Long-term debt is a secured note payable to a commercial bank, payable at $21,667 per month plus interest at the Wall Street Journal's prime rate plus 3/4 of one percent. The note is collateralized by the company's interest in oil and gas properties and is also guaranteed by two directors of the Company. Maturities of the debt are as follows:                                                                                                                                                                                                                                                                                               
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Debt covenants restrict other debt, pledge of assets, payments of dividends, mergers and changes in ownership.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Note 4 - Related Party Transactions                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|In January, 2001, the Company's directors entered into an agreement with H & S Production, Inc. (a company wholly owned by the Company's Chairman, Scott Heape) to participate in a farmout agreement covering leasehold interests in the Mings Chapel Field in East Texas whereby the Company has the opportunity to participate in up to three development wells. The first and second wells were drilled, completed, and put on line in 2001. Additional wells are planned, the timing for which is uncertain; additionally, four proven but undeveloped locations have been identified as a result of the first two wells drilled on this prospect.
|In September 2002, the directors approved a farmout agreement with H & S Production, Inc. pursuant to which the Company granted H & S the right to participate in a proposed well in the Minden Louisiana field. The terms provide for H & S to recoup 100% of its costs and for the Company to participate to the extent of 50% of its original interest thereafter. The directors believe the terms are consistent with normal practices in the industry, are the same as could have been secured from an unaffiliated party, and are in the Company's interest in view of its capital constraints.                                                  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|9                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      



|Item 2.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
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|CASTLEGUARD ENERGY, INC.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|CONDITION AND RESULTS OF OPERATIONS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|This Quarterly Report on Form 10-QSB includes "forward-looking" statements within the meaning of Section 27a of the Securities Act of 1933, as amended (the "Securities Act"), and section 21e of the Securities Exchange Act of 1934, as amended (the "exchange act"). Specifically, all statements other than statements of historical facts included in this report regarding the Company's financial position, business strategy and plans and objectives of management of the Company for future operations are forward- looking statements. These forward-looking statements are based on the beliefs of the Company's management as well as assumptions made by and information currently available to the Company's management. When used in this report, the words "anticipate," "believe," "estimate," "expect" and "intend" and words or phrases of similar import, as they relate to the Company or Company management, are intended to identify forward-looking statements. Such statements reflect the current view of the Company with respect to future events and are subject to certain risks, uncertainties and assumptions related to certain factors including, without limitation, price levels for oil and natural gas, concentration of oil and natural gas reserves and production, drilling risks, uncertainty of oil and gas reserves, risks associated with the development of additional revenues and with the acquisition of oil and gas properties and other energy assets, operating hazards and uninsured risks, general economic conditions, governmental regulation, changes in industry practices, marketing risks, one time events and other factors described herein ("cautionary statements"). Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. Based upon changing conditions, should any one or more of these risks or uncertainties materialize, or should any underlying assumptions prove incorrect, actual results may vary materially from those described herein as anticipated, believed, estimated, expected or intended. The Company does not intend to update these forward- looking statements. All subsequent written and oral forward- looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by the applicable cautionary statements. Reference is made to disclosure regarding "Forward-Looking Statements and Cautionary Statements" included in the Company's Annual Report on Form 10-KSB for the year ended December 31, 2001, which is incorporated herein by reference.
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|The Company is an independent oil and gas exploration company whose strategic focus is the application of advanced seismic imaging and computer-aided exploration technologies in the systematic search for commercial hydrocarbon reserves, primarily in the states of Texas and Louisiana. The Company attempts to leverage its technical experience and expertise with seismic to identify exploration and exploitation projects with significant potential economic return. The company intends to participate in selected exploration projects as a non-operating, working interest owner, sharing both risk and rewards with its partners. The Company has and will continue to pursue exploration opportunities in regions where the Company believes significant opportunity for discovery of oil and gas exists. By reducing drilling risk through seismic technology, the Company seeks to improve the expected return on investment in its oil and gas exploration projects. The Company attempts to limit capital requirements by forming industry alliances and exchanges a portion of its interest for cash and/or a carried interest in its exploration projects.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|10                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      





|RESULTS OF OPERATIONS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|Three Months September 30, 2002 vs. 2001                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|Net income for the year's third quarter improved substantially over the same quarter last year. Primary contributors were revenue growth of 86% this year, slightly lower general and administrative expense and lower financing cost. Revenue was driven by gas volumes of 77% more than last year, oil volumes of 241% over last year, slightly lower gas prices (10.9% less than last year) and oil prices which improved 7.2%.                                                                                                                                                                                                                                                                                                                                                         
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|Oil volumes increased from 625 barrels in the third quarter last year to 2,130 barrels this year. Gas volumes were up from 28,639 MCF last year to 50,754 MCF this year as the result of higher deliveries from the Company's Minden Louisiana properties. Mechanical difficulties with one Minden well in August and September reduced deliveries from earlier levels. Those difficulties are being addressed in October and November with the expectation of normal operations by December.                                                                                                                                                                                                                                                                                              
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|Prices for natural gas averaged $2.64 per MCF in the nine months this year versus $5.69 per MCF last year; oil prices this year were $24.54 versus $26.07 last year.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|Lease operating expense, severance taxes, depreciation depletion and amortization all trended higher with higher volumes in the quarter, but general and administrative trended lower from this years' second quarter. It was also slightly less than the third quarter last year as a result of cost control efforts by Company management.                                                                                                                                                                                                                                                                                                                                                                                                                                               
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|Interest expense was lower by 60% from the third quarter last year as the result of lower rates and lower borrowing levels.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|Nine Months September 30, 2002 vs. 2001                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|Nine months net income this year was down 72% from nine months last year principally as a result of a 54% decline in gas prices, offset by higher volumes of both oil and gas this year versus last year and by lower general and administrative expenses and lower financing costs.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|Gas sales volumes increased in the nine months from 147,094 MCF to 180,855 MCF; oil volumes increased from 2,206 barrels to 3,322 barrels this year, principally from the recompletion of an existing oil well in Minden.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|As in the third quarter, expenses increased with volumes except for general and administrative, which was held to 44% less than last year. Similarly, lower debt levels, as the bank borrowing used to acquire the additional interest in Minden during 2000 continues to be repaid, coupled with lower interest cost held financing costs to 68% less than last year.                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|LIQUIDITY AND CAPITAL RESOURCES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|Cash flow for the nine months ended September 30, 2002 was adequate to meet operating requirements and debt service plus $135,000 for capital additions. However, cash flow in the next six months is estimated to be less than adequate to fund capital requirements for a new well in Minden which was proposed by the operator. After exploring various financing options, the Company decided to enter a farmout agreement with a company owned by Castleguard's Chairman as a way of financing the Company's continued participation in new development opportunities in Minden. The farmout provides for the company to participate in future revenue streams, if any, to the extent of 50% of its original interest, after all costs have been recovered by the farmout participant.
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|Even after the foregoing arrangement, new investment opportunities exceed the Company's estimate of cash available in the future so that additional financing will be required to fully exploit the opportunities. No arrangements for such financing have been made and the lack of funding may limit the Company's deal flow in the future.                                                                                                                                                                                                                                                                                                                                                                                                                                              
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|11                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         



|Item 3.   CONTROLS AND PROCEDURES
|---------------------------------
|                                 

|(a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | Evaluation of disclosure controls and procedures.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                  
|The President/Secretary/Treasurer/Director of the Company has conducted an evaluation of the effectiveness of the Company's disclosure controls and procedures pursuant to Rule 13a-14 under the Securities Exchange Act of 1934 as of a date (the "Evaluation Date") within 90 days prior to the filing date of this report. Based upon that evaluation, the President/Secretary/Treasurer/Director concluded that, as of the Evaluation Date, the Company's disclosure controls and procedures were effective in ensuring that all material information relating to the Company required to be filed in this quarterly report has been made known to them in a timely manner.
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                  
|(b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | Changes in internal controls.                    
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                  
|There have been no significant changes made in the Company's internal controls or in other factors that could significantly affect internal controls subsequent to the Evaluation Date.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        



|Part II. Other Information                                 
|-----------------------------------------------------------
|                                                           
|Item 1. Legal Proceedings                                  
|Not Applicable                                             
|                                                           
|Item 2. Changes in Securities and Use of Proceeds          
|Not Applicable                                             
|                                                           
|Item 3. Defaults Upon Senior Securities                    
|Not Applicable                                             
|                                                           
|Item 4. Submission of Matters to a Vote of Security Holders
|Not Applicable                                             
|                                                           
|Item 5. Other Information                                  
|Not Applicable                                             
|                                                           
|Item 6. Exhibits and Reports on Form 8-K                   



|(a) | Exhibits -                                                                                                                                                                       
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                  
|(b) | Reports on Form 8-K - 	One Report on Form 8-K were filed during the last quarter of the period covered by this report.                                                           
|    |                                                                                                                                                                                  
|    | On September 26, 2002, the Company filed a Report on Form 8K relating to the farmout of interest in the West 28-1 well in the Minden Field of Louisiana to H & S Production, Inc.
|    |                                                                                                                                                                                  
|12 





|SIGNATURES                                                                                                                                                                              
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                        
|                                                                                                                                                                                        
|Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.





|                  | CASTLEGUARD ENERGY, INC.                                            
|----------------- | --------------------------------------------------------------------
|                  |                                                                     
|                  |                                                                     
|November 14, 2002 | /s/ Bob G. Honea                                                    
|                  | By:   Bob G. Honea, Director/President
         Treasurer/ Secretary
|                  |                                                                     
|13               



|CERTIFICATION
|-------------
|             



|I, Bob G. Honea, certify that:
|------------------------------
|                              

|1. | I have reviewed this quarterly report on Form 10-QSB of Castleguard Energy, Inc.;                                                                                                                                                                                                                                             
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                               
|2. | Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
|   |                                                                                                                                                                                                                                                                                                                               
|3. | Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;                             
|   |                                                                                                                                                                                                                                                                                                                               
|4. | I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                               

|a) | designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                
|b) | evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and                                                                                                  
|   |                                                                                                                                                                                                                                                                                                
|c) | presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                

|5. | I have disclosed, based on my most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                

|a) | all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                               
|b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                               

|6. | I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                           



|November 14, 2002 | /s/ Bob G. Honea                                                      
|----------------- | ----------------------------------------------------------------------
|                  | By:    Bob G. Honea, Director/President
          Treasurer/ Secretary
|                  |                                                                       
|14