Drilling and testing of the Company’s third exploration well in Trinidad has been completed and the drilling rig has been released. To date the Company has funded $80.1 million U.S. towards its share of costs on the Block 5(c) program and has further estimated obligations of $32.9 million U.S. to fully payfor its obligations relating to the initial exploration phase of Block 5(c). In addition, the Company has $14 million CDN, plus accrued interest after January 31, 2009, payable on the bridge facility, the Company does not currently have the funds or the financing available to meet these remaining obligations. The Company’s Board of Directors has created a Special Committee of board members to evaluate strategic alternatives, including the sale of the Company or its assets.

In addition, the Company has obtained creditor protection under CCAA provisions. This allows the Company to proceed with its evaluation of strategic alternatives in an orderly manner. Challenger is dependent on this CCAA order to allow it to remain in possession and control of its property to continue with its process to evaluate the various strategic alternatives available, including a sale of Challenger or its assets. Should the court not continue to grant creditor protection, the Company may need to liquidate or may forfeit its 25% working interest in Block 5(c)."

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Best Wishes; Scott