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|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                            
|UNITED STATES                                                                                                                                                                                                                                                                                               
|SECURITIES AND EXCHANGE COMMISSION                                                                                                                                                                                                                                                                          
|Washington, D.C. 20549                                                                                                                                                                                                                                                                                      
|                                                                                                                                                                                                                                                                                                            
|FORM 10-QSB                                                                                                                                                                                                                                                                                                 
|                                                                                                                                                                                                                                                                                                            
|[X]                                                                                                                                                                                                                                                                                                         
|                                                                                                                                                                                                                                                                                                            
|[  ]                                                                                                                                                                                                                                                                                                        
|                                                                                                                                                                                                                                                                                                            
|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, 2000, there were 15,491,626 Common shares outstanding.                                                                                                                                                                                                                                     
|______________________________                                                                                                                                                                                                                                                                              
|                                                                                                                                                                                                                                                                                                            
|Transitional Small Business Disclosure Format (check one): Yes [   ] No [X]                                                                                                                                                                                                                                 





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











|Item 1.                 
|------------------------
|                        
|CASTLEGUARD ENERGY, INC.
|                        
|FINANCIAL STATEMENTS    





|REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Board of Directors                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|Castleguard Energy, Inc.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|We have reviewed the accompanying balance sheets of Castleguard Energy, Inc. as of September 30, 2000, and the related statements of income for the three and nine month periods and cash flows and stockholders'
equity 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 generally accepted accounting principles.                                                                                                                                                                                                                                                                                                                                                                               
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Jackson & Rhodes P.C.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Dallas, Texas                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|November 7, 2000                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     





|CASTLEGUARD ENERGY INC.                 
|----------------------------------------
|                                        
|BALANCE SHEETS                          
|                                        
|September 30, 2000 and December 31, 1999
|                                        
|                                        
|Assets                                  
|                                        
|Current assets:                         
|                                        
|                                        
|                                        
|                                        
|Petroleum and natural gas interests, net
|                                        
|Office equipment, net                   
|                                        
|Debt issue costs, net                   
|                                        
|TOTAL ASSETS                            
|                                        
|                                        
|Liabilities & Stockholders' Equity      
|                                        
|Current liabilities:                    
|                                        
|                                        
|                                        
|                                        
|                                        
|Notes Payable, less current maturities  
|                                        
|Subscriptions received                  
|                                        
|Stockholders' equity:                   
|                                        
|                                        
|                                        
|                                        
|                                        
|                                        
|                                        
|                                        
|TOTAL LIABILITIES & STOCKHOLDERS' EQUITY
|                                        



|CASTLEGUARD ENERGY INC.                                          
|-----------------------------------------------------------------
|                                                                 
|STATEMENTS OF OPERATIONS                                         
|(Unaudited)                                                      
|                                                                 
|                                                                 
|                                                                 
|Net Sales:                                                       
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|Expenses:                                                        
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|Income (Loss) before interest income                             
|                                                                 
|Interest income                                                  
|Interest and financing expense                                   
|                                                                 
|                                                                 
|Net income (loss)                                                
|                                                                 
|Net Income (Loss) per weighted average
             share        
|                                                                 
|Weighted average number of common
             shares outstanding





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



|CASTLEGUARD ENERGY, INC.                       
|-----------------------------------------------
|                                               
|STATEMENTS OF STOCKHOLDERS' EQUITY             
|(Unaudited for the year 2000 first nine Months)
|                                               
|                                               
|                                               
|                                               
|                                               
|Balance at December 31, 1998                   
|                                               
|Issuance of common stock for:                  
|Cash proceeds                                  
|Interest in property (Note 4)                  
|                                               
|Net loss:                                      
|January 1, 1999 to                             
|December 31, 1999                              
|                                               
|Balance at December 31, 1999                   
|                                               
|Issuance of common stock for:                  
|Cash proceeds                                  
|                                               
|Reverse property acquisition (Note 4)          
|                                               
|Purchase of treasury stock                     
|                                               
|Net income, nine months ended                  
|September 30, 2000                             
|                                               
|Balance, September 30, 2000                    



|CASTLEGUARD ENERGY, INC                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|NOTES TO FINANCIAL STATEMENTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|Nine months ended September 30, 2000                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|Note 1 - Future Operations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|The Company's financial statements are prepared using generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and
liquidation of liabilities in the normal course of business. The Company's improving operating results produced positive cash flow for the nine months of this year, and reduced the deficit from $398,905 at December 31, 1999, to $282,546 at September 30,
2000. The Company is in the process of growing through the acquisition of oil and gas interests (note 3) and intends to finance this growth through the issuance of common stock and external debt. Future operations are dependent on the Company's ability to
obtain financing from share issuances and external debt to finance acquisitions of property and on its ability to achieve earnings from its acquired operations.
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|Note 2 - Summary of Significant Accounting Policies and Practices                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|(a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|(b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|(c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|(d)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             



|CASTLEGUARD ENERGY, INC                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|NOTES TO FINANCIAL STATEMENTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|Nine months ended September 30, 2000                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|Note 3 - Acquisition of Oil & Gas Interests                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|During the third quarter, the Company acquired additional working interests in the Minden Field in Louisiana for $1,300,000, raising its interest from 31/2 to 5% to about 121/2 to
15%. The acquisition included interests in producing and non-producing properties and increased the Company's share of oil and gas sales. An additional well is in the process of being drilled with the Company's share of costs estimated to be $160,000
which the Company expects to pay from existing resources and future cash flows.
|The acquisition was funded by a loan from a commercial bank of $1,040,000 which bears interest at 1% over Chase Manhattan prime and is repayable at $30,000 per month plus interest. The loan is secured by the Company's total
Minden Field interest and is guaranteed by the Company's Chairman and a private company he controls, as well as, by the Company's President.                                                                                                                                                  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|Note 4 - Related Party Transactions                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|The Company, in 1999, received oil and gas revenue and incurred lease operating expenses from properties owned by H & S Production, a company owned by the Chairman of the
Board, totaling $17,155 and $30,824, respectively. At December 31, 1999, the Company owed H & S Production $14,387, relating to operating activities.                                                                                                                                                                                              
|The loans payable of $56,000 at December 31, 1999, were $28,000 due to H & S Production and $28,000 due to the president of the Company. The loans were interest free and were repaid prior to March 31, 2000.                                                                                                                                                                                                                                                                                                                
|In February 1999, the Company acquired an 8% working interest in oil and gas leases covering approximately 10,000 acres in Navarro County, Texas as well as 40 sq. miles of 3D seismic on this property from H & S Production
in exchange for 1,500,000 shares of common stock at a fair value of $750,000 and $50,000, respectively, for a total cost of $800,000.                                                                                                                                                           
|During the year 2000 third quarter, the Company's Board of Directors, after considering costs of development and prospects therefrom, voted unanimously to sell the oil and gas
leases and seismic data back to H & S Production for the consideration originally paid (1,500,000 of the Company's common shares and $50,000 in cash). No income (expense) effect resulted from the transactions.                                                                                                                             





|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 "Management's
Discussion and Analysis of Financial Condition and Results of Operations - Forward-Looking Information - Cautionary Statements" included in the Company's Annual Report on Form 10-KSB for the year ended December 31, 1999, 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          



|Results of Operations - Comparison of Three Month and Nine Month Periods Ended September 30, 2000 and 1999                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|Results of operations improved significantly in the third quarter of 2000 compared to the second quarter and the third quarter of 1999. Similarly, results for the nine months
improved significantly from last year. Improvements were driven by higher commodity prices in this quarter and this year compared to the same periods last year and the prior quarter of this year and by higher production volumes in this quarter as well.
Production volumes increased principally due to the acquisition in the third quarter of a larger working interest ( increasing from 31/2-5% to 121/2-15%) in the Minden Field in Louisiana. Increased oil and gas revenues were substantially in excess of
operating costs; depreciation, amortization, and depletion; plus interest attributable to financing the acquisition. As a consequence, the Company reported net income for the three and nine months of this year compared to losses last year, and net income
improved from the second quarter of this year by 233%. Reported oil volumes for the quarter were 579 barrels compared to 100 barrels last year at prices of $29.98 per barrel and $20.00 per barrel, respectively. Similarly, gas sales for the quarter
aggregated 25,676 MCF compared to 1,381 MCF last year at $4.69 per MCF versus $3.53 per MCF, respectively. Operating results in 1999 were adversely affected by one-time costs of reorganizing and altering the Company's business to place it on its present
course.
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|Liquidity and Capital Resources                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|Cash flow, before working capital changes, improved significantly in the third quarter and the Company successfully completed the acquisition and financing of a substantially
larger working interest in its Minden Louisiana Field play. The increased participation should produce incremental cash flow in excess of debt service casts which will provide funding for the Company's share of additional development costs.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|Executing the Company's business plan in the future will require success in obtaining additional cash resources from additional debt financings, sales of existing properties, or other sources. Another avenue potentially
available is through industry alliances to limit funding requirements for future projects. Management believes future cash flows from existing properties will be adequate to fund current operating requirements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|Inflation and Changing Prices                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|The impact of inflation, as always, is difficult to assess. During 1997 and 1998, the oil and gas industry remained depressed; however as of December 31, 1999, commodity prices had made a
rebound and were consistently improving. This improvement has continued to increase in the third quarter of 2000. The general softening of the market prior to and into 1999 had reduced the cost of labor, materials, contract services, and other operating
costs; therefore, the increase in commodity prices could cause an increase in operating costs. The Company cannot anticipate where cost and revenue trends will head; however, a sudden increase in inflation and/or an increase in operating costs coupled
with a cessation of the current improved trend of oil prices could have an adverse effect on the operations of the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|Part II. Other Information                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
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|Item 1. Legal Proceedings                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|Not Applicable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
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|Item 2. Changes in Securities and Use of Proceeds                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|Not Applicable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
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|Item 3. Defaults Upon Senior Securities                    
|-----------------------------------------------------------
|Not Applicable                                             
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|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 - No Reports on Form 8-K were filed during the last quarter of the period covered by this report.





|SIGNATURES                                                                                                                                                                              
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
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|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 10, 2000 | /s/ Bob G. Honea                    
|                  | BY: Bob G. Honea, Director/President