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Canadian Superior and Challenger Announce Business Combination

08:17 EDT Friday, June 19, 2009

CALGARY, ALBERTA--(Marketwire - June 19, 2009) - Canadian Superior Energy Inc. ("Canadian Superior") (TSX:SNG)(NYSE Amex:SNG) and Challenger Energy Corp. ("Challenger") (TSX VENTURE:CHQ) announced today that the companies have entered into an arrangement agreement (the "Arrangement Agreement") providing for the acquisition by Canadian Superior of Challenger. Canadian Superior will acquire all of the outstanding common shares of Challenger (the "Challenger Shares") in exchange for the issuance of 0.51 of a common share of Canadian Superior ("Canadian Superior Shares") for each outstanding Challenger Share.

Based on the 20 day volume weighted average trading price of the Canadian Superior Shares, the exchange ratio equals a price of C$.4345 per Challenger Share and represents a 36% premium to Challenger's closing trading price on June 18, 2009 and a 15% premium to the 20 day volume weighted average trading price of the Challenger Shares. The total transaction value, including the assumption of approximately C$54.4 million in Challenger's net debt, is approximately C$77.8 million.

Characteristics of the Pro Forma Company

- Current Western Canadian production of approximately 3,050 boepd (85% natural gas); with an additional 300 boepd behind pipe and over 146,000 net undeveloped in Alberta and BC;

- A diversified suite of oil and natural gas exploration and development assets located in Canada, Trinidad and Tobago, and North Africa and a liquefied natural gas ("LNG") project located on the east coast of the United States;

- A market capitalization in excess of C$160.6 million (based on the current trading price of the Canadian Superior Shares);

- Approximately 195.8 million shares outstanding.

Canadian Superior has previously announced that, as part of its restructuring pursuant to the Companies' Creditors Arrangement Act ("CCAA"), it has reached an agreement with Centrica plc. ("Centrica"), under which Centrica will acquire from Canadian Superior a 45 per cent interest in Block 5(c), located offshore Trinidad, for US$142.5 million in cash. The Centrica agreement is subject to the satisfaction of certain conditions including pre-emption rights from existing field partners and to the approval by the Court of Queen's Bench of Alberta, and by the Ministry of Energy and Energy Industries of the Government of Trinidad and Tobago.

It is Canadian Superior's objective to exit CCAA with the following assets in place; a twenty five per cent interest in Block 5(c) and its MG exploration block, both in Trinidad, all of its Western Canadian producing properties, its interest in the 7th of November block offshore Libya and Tunisia, its Liberty Natural Gas LNG project in New Jersey, and its offshore Nova Scotia exploration acreage. In addition the Company will reconstitute its Board of Directors, make additions to senior management, and also intends to have in place a new undrawn credit facility, with sufficient funding to execute its anticipated 18-month capital program.

Transaction Terms and Conditions.

The transaction is to be effected by way of an arrangement (the "Arrangement") under the Canada Business Corporations Act. Completion of the Arrangement, which is anticipated to occur in late August, is subject to, among other things, the requisite approval of the holders of Challenger Shares (Challenger Shareholders), the approval of the Court of Queen's Bench of Alberta, the receipt of all necessary regulatory and stock exchange approvals, and certain closing conditions that are customary for a transaction of this nature.

The Board of Directors of Challenger has unanimously determined that the proposed Arrangement is in the best interests of, and fair to, Challenger and its stakeholders, and unanimously recommends that Challenger Shareholders vote in favour of the Arrangement at the upcoming meeting. Each of the directors and officers of Challenger, who collectively hold approximately 2% of the outstanding Challenger Shares, have agreed to enter into support agreements pursuant to which each has agreed to vote in favour of the Arrangement.

The Arrangement Agreement prohibits Challenger from soliciting or initiating any discussion regarding any other business combination or sale of material assets, contains provisions for Canadian Superior to match competing, unsolicited proposals and provides for a mutual C$3 million termination fee payable in certain circumstances.

Complete details of the terms of the Arrangement are set out in the Arrangement Agreement, which will be filed by each of Canadian Superior and Challenger on SEDAR and will be available at www.sedar.com.

Financial Advisors

Jennings Capital Inc. ("Jennings") is acting as financial advisor to the Independent Committee of the Board of Directors of Canadian Superior (the "Independent Committee") with respect to the Arrangement and has advised the Independent Committee and the Board of Directors of Canadian Superior that it is of the opinion that the consideration to be offered by Canadian Superior pursuant to the proposed Arrangement is fair, from a financial point of view, to Canadian Superior and its shareholders.

Peters & Co. Limited ("Peters & Co.") is acting as financial advisor to Challenger in connection with its review of strategic alternatives and the Arrangement and has advised the Board of Directors of Challenger that it is of the opinion, as of the date hereof, that the consideration to be received by the Challenger Shareholders pursuant to the proposed Arrangement is fair, from a financial point of view, to the Challenger Shareholders.

About Canadian Superior and Challenger

Canadian Superior Energy Inc. is a Calgary, Alberta, Canada based diversified global energy company engaged in the exploration and production of oil and natural gas with operations and/or projects located in Canada, Trinidad and Tobago and North Africa. Canadian Superior is also developing a liquefied natural gas ("LNG") project on the East Coast of the United States. See www.cansup.com for further information on Canadian Superior.

Challenger Energy Corp. is a Calgary, Alberta, Canada based oil and gas exploration company which has invested approximately US$80.1 million in exploration expenditures in Block 5(c) offshore Trinidad and Tobago. See www.challenger-energy.com for further information on Challenger.

*****PS. Canadian Superior has relinquished two more of its licences off of Nova Scotia and now only retains Mariner, Marquis and one other licence.

Best Wishes; Scott