|-----------------------                                                                                                                                                                                                                                                                                     
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                            
|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, 2001, there were 17,151,626 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. 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, 2001, and the related statements of income, stockholders' equity and cash flows for the nine month period then ended. These financial statements are the responsibility of the Company's management.                                                                                                                                                                                                                                                                                                
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of analytical procedures applied to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Based on our reviews, we are not aware of any material modifications that should be made to the accompanying financial statements in order for them to be in conformity with generally accepted accounting principles.                                                                                                                                                                                                                                                                                                                                                                               
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Jackson & Rhodes P.C.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Dallas, Texas                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|November 8, 2001                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     





|CASTLEGUARD ENERGY INC.                 
|----------------------------------------
|                                        
|BALANCE SHEETS                          
|                                        
|                                        
|                                        
|                                        
|Assets                                  
|                                        
|Current assets:                         
|                                        
|                                        
|                                        
|                                        
|Petroleum and natural gas interests, net
|                                        
|Debt issue costs, net                   
|                                        
|TOTAL ASSETS                            
|                                        
|                                        
|Liabilities & Stockholders' Equity      
|                                        
|Current liabilities:                    
|                                        
|                                        
|                                        
|                                        
|Notes Payable, less current maturities  
|Deferred income taxes payable           
|Accrued stock to be issued              
|                                        
|Stockholders' equity:                   
|                                        
|                                        
|                                        
|                                        
|                                        
|                                        
|TOTAL LIABILITIES & STOCKHOLDERS' EQUITY
|                                        



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







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





|CASTLEGUARD ENERGY INC.           
|----------------------------------
|                                  
|statements of stockholders' equity
|(Unaudited for year 2001)         
|                                  
|                                  
|                                  
|                                  
|                                  
|                                  
|Balance, December 31, 1999        
|                                  
|Issuance of stock for cash        
|                                  
|Reverse property acquisition      
|                                  
|Purchase of treasury stock        
|                                  
|Net income                        
|                                  
|Balance, December 31, 2000        
|                                  
|Issuance of stock for             
|compensation and                  
|services payable                  
|                                  
|Net income for the nine months    
|                                  
|Balance, September 30, 2001       



|CASTLEGUARD ENERGY, INC                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|NOTES TO FINANCIAL STATEMENTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|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 is in the process of growing through the acquisition of oil and gas interests. The Company intends to finance this growth through future cash flow, the issuance of common stock and debt. Future growth may be limited by the extent of internally generated cash flow, the Company's ability to obtain financing from share issuances and debt to finance future expansion of working interests.
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|Note 2 - Summary of Significant Accounting Policies and Practices                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|(a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|(b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|(c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|(d)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          



|CASTLEGUARD ENERGY, INC                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|NOTES TO FINANCIAL STATEMENTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Note 3 - Long-Term Debt                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Long-term debt is a secured note payable to a commercial bank, payable at $30,000 per month plus interest at the bank's prime rate plus one percent. The note is collateralized by the company's interest in the Minden, Louisiana, field and is also guaranteed by two directors of the Company. Maturities of the debt are as follows:                                                                                                                                                                                                                                                               
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Note 4 - Related Party Transactions                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|In January, 2001, the Company's directors entered into an agreement with H & S Production, Inc. (a company wholly-owned by the Company's Chairman, Scott Heape) to participate in a farmout agreement covering leasehold interests in the Mings Chapel Field in East Texas whereby the Company has the opportunity to participate in up to three development wells. The first of these wells was drilled in the first quarter of 2001 and commenced production in April 2001, the second was drilled in the third quarter of 2001 and is expected to commence production in the fourth quarter of 2001.
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       





|Item 2.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|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, 2000, 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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Three Months September 2001 vs. 2000                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|This year's third quarter declined from last year's third quarter as the result of lower commodity prices with slightly improved sales volumes, combined with higher operating costs, depreciation, depletion and amortization, general and administrative expense and interest.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Gas prices this year were 30% lower that those of the same quarter last year and overwhelmed an 11 1/2% increase in volume resulting in revenues that were also 24% lower than last year. Operating, depreciation, depletion and amortization, and general and administrative costs were higher, reflecting increased levels of activity by the Company in 2001 compared to 2000. Additionally, this year's third quarter had a full quarter's interest charge for the debt incurred in last year's third quarter to increase the Company's interest in the Minden dome area of Louisiana.                                                                                                                                                                                                                                                                                  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Nine Months September 2001 vs. 2000                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Nine months net income this year improved 203% over last year as the result of higher volumes (up 152% for gas and 27.7% for oil) and higher prices (55.9% for gas and 4.3% for oil) compared with last year. The higher commodity volumes and prices drove a 244% increase in revenue for the nine months this year compared with last year. Operating expenses and general and administrative expenses increased to reflect the higher activity level and depreciation, depletion and amortization increased 360% reflecting higher production and greater investment in producing properties. An income tax provision this year is required because the Company's tax loss carry forward was exhausted during the earlier part of the year.                                                                                                                              
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|*          *          *                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Comparisons of operating results for the three and nine months 2000 with corresponding periods of 1999 are not meaningful.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|CAPITAL PROJECTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Production volume is a big factor to operating results as are commodity prices. The Company cannot influence price levels for its hydrocarbon production, but it can influence its production level.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Natural gas production peaked in the first quarter of this year when the Company's Minden interest experienced maximum production from two new wells drilled in the last half of last year. While the Company has more than recovered its costs of drilling and a share of the property acquisition cost, production has declined rapidly from highest levels which is characteristic of Minden dome gas wells. Several potential producing intervals were identified during the original drilling but the wells were completed in only one interval originally. The wells' operator commenced new completion efforts in the fourth quarter to complete both wells in new intervals while continuing production from the existing intervals. The operator expects completion in the fourth quarter with full effect of additional volumes in the first quarter of next year.
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|In addition to the recompletions, review of additional potential drilling locations at Minden continues, and the Company is participating in a unit adjacent to its primary Minden interest where a new gas well has recently been drilled and is in process of being completed by another operator.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|The operator of the Company's interest in Texas Mings Chapel field has recently drilled a second well which the operator believes will commence production in December 2001.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Capital expenditures during the third quarter were principally in Minden and Mings Chapel.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|LIQUIDITY AND CAPITAL RESOURCES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Cash flow in the nine months ended September 30, 2001 was substantially improved over the same period last year, as well as, improved compared to the last half of last year. Although slowing in the third quarter from the first half of the year, cash flow has been adequate to fund operating costs, debt service and new projects. Additional funding will be required to fully exploit all the opportunities available to the Company and must be arranged in the future. Inability to secure additional funding will limit the Company's deal flow in the future.                                                                                                                                                                                                                                                                                                   



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



|(a) | Exhibits -                                                                                                            
|--- | ----------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                       
|(b) | Reports on Form 8-K - 	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.            
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|                  |                                     
|                  |                                     
|November 12, 2001 |                                     
|                  | BY: Bob G. Honea, Director/President