|-----------------------                                                                                                                                                                                                                                                                                     
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                            
|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 March 31, 2001, there were 16,891,626 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.                 
|                        
|                        
|                        
|                        









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





|REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Board of Directors                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|Castleguard Energy, Inc.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|We have reviewed the accompanying balance sheet of Castleguard Energy, Inc. as of March 31, 2001, and the related statements of income, stockholders' equity and cash flows for the three 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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|May 9, 2001                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          





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



|CASTLEGUARD ENERGY INC.          
|---------------------------------
|                                 
|                                 
|STATEMENTS OF OPERATIONS         
|(Unaudited)                      
|                                 
|                                 
|                                 
|                                 
|                                 
|Oil and gas revenues             
|                                 
|Expenses:                        
|                                 
|                                 
|                                 
|                                 
|Income (loss) from operations    
|                                 
|Interest and financing costs     
|                                 
|Income (loss) before income taxes
|                                 
|Income taxes                     
|                                 
|Net income (loss)                
|                                 
|                                 
|Basic earnings (loss) per common 
|                                 
|                                 
|Weighted average number of common
|                                 
|                                 





|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 first quarter)
|                                       
|                                       
|                                       
|                                       
|                                       
|                                       
|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                             
|                                       
|Balance, March 31, 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)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|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.                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          





|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 Month Periods Ended March 31, 2001 vs. 2000                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|Year 2001 (this year) first quarter results were dramatically improved over 2000 (last year) first quarter, as total hydrocarbon sales volumes and prices for natural gas rose
significantly. The volume growth was largely attributable to increased gas sales from the Company's working interests in the Minden Dome area of Louisiana. Sales increased 1562% in 2001 from the year 2000 as a result of two new wells on production in the
first quarter this year which were not producing last year. Natural gas sales volumes this year were 70,336 MCF vs. 13,433 MCF last year, an increase of 424%. Sales prices rose to $7.29 per MCF in 2001 compared to $2.19 per MCF in 2000.
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|Operating expenses rose this year compared to last year but not at the same rate as revenues resulting in income from operations of $366,046 compared to an operating loss of
($8,339) last year. Net income rose to $312,089 compared to a net loss last year, as earnings improvement more than offset the financing cost of borrowed funds to purchase additional interests in Minden in August, 2000.                                                                                                                                                                                                                                                                                 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|Comparisons of operating results for the three months 2000 and the three months 1999 are not meaningful.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|LIQUIDITY AND CAPITAL RESOURCES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|Cash flow in the quarter ended March 31, 2001 was more than adequate to provide operating capital, meet obligations to fund interest and debt payments with an increase in cash
at quarter end of $113,034 from December 31, 2000.                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|The Company has participated in drilling a well in the Mings Chapel field of Texas which commenced production in the second quarter of 2001. The Company has a 4 1/2% working
interest. Cash flow from all of the Company's working interests is expected to adequately fund current operating needs, provide cash for debt repayment and partially fund additional new projects or additional wells in existing producing fields. However,
the Company expects to require additional financing to fully exploit all its opportunities and such financing must be arranged in the coming months. The lack of 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                                                                                                                                                                              
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                        
|                                                                                                                                                                                        
|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.            
|------------ | ------------------------------------
|             |                                     
|             |                                     
|May 14, 2001 | /s/  Bob G. Honea                   
|             | BY: Bob G. Honea, Director/President