UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM 40-F
(Check One)
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REGISTRATION STATEMENT PURSUANT TO
SECTION 12 OF THE SECURITIES EXCHANGE ACT OF 1934
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ANNUAL
REPORT PURSUANT TO SECTION 13(a) OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
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For the fiscal year ended
December 31, 2007
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Commission
File Number: 001-31395
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CANADIAN
SUPERIOR ENERGY INC.
(Exact name of Registrant as specified in its
charter)
Alberta
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1311
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Not
Applicable
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(Province or other jurisdiction of
incorporation or organization)
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(Primary Standard Industrial
Classification Code (if applicable))
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(I.R.S. Employer Identification Number (if
applicable))
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Suite 2700,
605 5th Avenue SW
Calgary,
Alberta, Canada T2P 3H5
(403)
294-1411
(Address and telephone number of Registrants
principal executive offices)
PTSGE
Corp.
Attn: Gary Kocher
925
Fourth Avenue, Suite 2900
Seattle,
Washington 98104
(206)
623-7580
(Name, address (including
zip code) and telephone number
(including area code) of
agent for service in the United States)
Securities registered or to be registered pursuant to Section 12(b) of
the Act.
Title
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Name
of Each Exchange on Which Quoted
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Common Shares
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American Stock
Exchange
Toronto Stock Exchange
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Securities registered or to be registered pursuant to Section 12(g) of
the Act.
None.
Securities for which there is a reporting obligation
pursuant to Section 15(d) of the Act.
None.
For annual reports, indicate by check mark the
information filed with this Form:
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x
Annual
information form
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x
Audited
annual financial statements
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Indicate number of
outstanding shares of each of the issuers classes of capital or common stock
as of the close of the period covered by the annual report.
The Registrant had
140,312,273 common shares outstanding as of December 31, 2007
Indicate by check
mark whether the Registrant by filing the information contained in this form is
also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under
the Securities Exchange Act of 1934 (the Exchange Act). If Yes is marked, indicate the file number
assigned to the Registrant in connection with such Rule.
Yes
o
No
x
Indicate by check
mark whether the Registrant (1) has filed all reports required to be filed
by Section 13 or 15(d) of the Exchange Act during the preceding 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.
Yes
x
No
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Except
where otherwise indicated, all dollar amounts stated in this Annual Report on Form 40-F
are Canadian dollars.
Principal
Documents
The following
documents have been filed as part of this Annual Report on Form 40-F:
A.
Annual Information Form
For our Annual
Information Form for the twelve-month period ended December 31, 2007,
see Exhibit 99.1 to this Annual Report on Form 40-F.
B.
Audited Annual Financial
Statements
For our
Consolidated Audited Financial Statements for the twelve-month period ended December 31,
2007, including the report of independent registered public accounting firm
with respect thereto, see Exhibit 99.2 to this Annual Report on Form 40-F. For a reconciliation of important differences
between Canadian and United States generally accepted accounting principles,
see Note 19 of the Notes to the Consolidated Financial Statements.
C.
Managements Discussion and
Analysis
For Managements
Discussion and Analysis for the twelve-month period ended December 31,
2007, see Exhibit 99.3 to this Annual Report on Form 40-F.
Disclosure Controls and Procedures
In accordance with the Rules 13a-15
and 15d-15 of the Securities Exchange Act of 1934, as amended (the Exchange
Act), under the supervision and with the participation of the Chief Executive
Officer and the Chief Financial Officer, we have carried out an evaluation of
the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) of
the Exchange Act) as of December 31, 2007. Based on that evaluation, the
Chief Executive Officer and the Chief Financial Officer concluded that, because
of material weaknesses described below in Internal Control over Financial
Reporting, our disclosure and procedures were not effective as of December 31,
2007.
Internal Control over Financial Reporting
Our management is
responsible for establishing and maintaining adequate internal control over
financial reporting and designing such internal control over financial reporting
to provide reasonable assurance regarding the reliability of financial
reporting and the preparation and fair presentation of financial statements for
external purposes in accordance with Canadian generally accepted accounting
principles (GAAP), including a reconciliation to U.S. GAAP. Our management,
including the Chief Executive Officer and Chief Financial Officer, conducted an
evaluation of the effectiveness of our internal control over financial
reporting based on the framework in Internal Control Integrated Framework
issued by the Committee of Sponsoring Organizations of the Treadway Commission
(COSO). Based on this evaluation, our management concluded that our internal
control over financial reporting was not effective as December 31, 2007
due to the material weaknesses described below. A material weakness is a
deficiency, or a combination of deficiencies, in internal control over
financial reporting, such that there is a reasonable possibility that a
material misstatement of the annual or interim financial statements will not be
prevented or detected on a timely basis.
During the fourth quarter
of 2007 a new CEO was hired along with a new CFO and finance and accounting
team in the first quarter of 2008. Although material deficiencies existed at
December 31, 2007, the Corporation has taken significant steps in Q1 2008 to
alleviate in the near term some of the noted material weaknesses, such as
segregation of duties and financial preparation and review procedures and has
implemented an aggressive plan that by the end of 2008 all noted material
weaknesses at December 31 will be substantially eliminated.
Managements assessment
identified the following material weaknesses in internal control over financial
reporting as of December 31, 2007:
·
There
are no effective controls or procedures related to significant accounts or
processes to provide reasonable assurance that transactions are recorded
accurately, are recorded timely and are complete;
1
·
The
Corporation was not adequately staffed with accounting personnel possessing an
adequate level of technical expertise and did not maintain effective
segregation of duties over automated and manual transactions leading to
ineffective monitoring, supervision and reviews.
·
The
Corporation did not maintain effective controls over the safeguarding of
monetary assets. The material weakness affects cash and short-term investments.
Meyers Norris Penny LLP,
the independent registered public accounting firm that audited our consolidated
financial statements has issued an attestation report on our internal control
over the financial reporting. For Meyers Norris Penny LLPs report, see Exhibit 99.5
to this Annual Report on Form 40-F.
Remediation Effort
Our management completed
its assessment of the effectiveness of our internal control over financial
reporting as of December 31, 2007, and in performing its assessment,
identified the material weaknesses described above. These material weaknesses
have been discussed with the Audit Committee. The Audit Committee has taken an
active role in overseeing managements implementation of the remedial measures
described below. By implementing these remedial measures, management intends to
improve our internal control over financial reporting and to avoid material
misstatements in consolidated financial statements prepared for external
purposes, in the future. Our management is working under the supervision of the
Audit Committee to identify and implement additional corrective actions, where
required, to improve the effectiveness of our internal control over financial
reporting, including the enhancement of systems and procedures.
We have implemented or are implementing the following measures, which
will improve significantly our internal control over financial reporting:
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The hiring
of a new CFO and Corporate Controller and key additional operational accounting
and financial reporting staff of which a number are Chartered Accountants with
Canadian and US financial and regulatory reporting experience;
·
The
implementation of regular management meetings to provide operational,
financial, and accounting updates of the Corporation;
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A budgeting
process which will compare actual results to budgeted results for management to
review and query on a monthly basis;
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The
implementation of controls to safeguard monetary assets; and
·
The
initiation of an ongoing and comprehensive review of financial controls and
procedures to address the issues identified above and to bring into compliance
with the requirements of the Sarbanes-Oxley Act with respect to internal
controls and procedures.
Management believes
that, through implementation of the measures noted above, we will begin to
address the conditions identified above as material weaknesses. We will monitor
the effectiveness of these measures, and our internal control over financial
reporting on an ongoing basis. We will continue to asses our remediation plans
and will take further action, as appropriate, to strengthen our internal control
over financial reporting.
Audit Committee Financial Expert
Our Board of Directors
has determined that Mr. Squires is an audit committee financial expert
serving on our audit committee (as defined in paragraph 8(b) of
General Instruction B to Form 40-F).
Our Board of Directors has determined that Mr. Squires is
independent pursuant to the standards of the American Stock Exchange. For a description Mr. Squires relevant
experience in financial matters, see his employment history in the section Directors
and Officers in our Annual Information Form for the year ended December 31,
2007, which is filed as Exhibit 99.1 to this Annual Report on Form 40-F.
2
Code of Ethics
Our code of ethics
applicable to our principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing similar
functions is disclosed in our Code of Business Conduct and Ethics, which is
applicable to all of our directors, officers and employees. Our Code of
Business Conduct and Ethics is filed as Exhibit 99.4 to this Annual Report
on Form 40-F. In the event that we:
(i)
amend any provision of our
Code of Business Conduct and Ethics that applies to our principal executive
officer, principal financial officer, principal accounting officer or
controller or persons performing similar functions that relates to any element
of the code of ethics definition enumerated in paragraph (9)(b) of
General Instruction B to Form 40-F, or
(ii)
grant a waiver, including an
implicit waiver, from a provision of our Code of Business Conduct and Ethics to
any of our principal executive officer, principal financial officer, principal
accounting officer or controller or persons performing similar functions that
relates to any element of the code of ethics definition as enumerated in
paragraph (9)(b) of General Instruction B to Form 40-F,
then we will disclose in a Form 6-K any such
amendment or waiver. Such disclosure will specifically describe the nature of
the amendment or waiver, and will, in the case of a waiver, name the person to
whom the waiver was granted.
Principal
Accountant Fees and Services
The following
table provides information about the fees billed to us for professional
services rendered by Meyers Norris Penny LLP, our principal accountant during
fiscal years 2007 and 2006:
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2007
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2006
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Audit fees
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$
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201,798
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$
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141,820
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Audit-related
fees
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52,115
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35,490
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Tax fees
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7,420
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6,400
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All other fees
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50,032
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44,245
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Total fees
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$
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311,365
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$
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227,955
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Audit Fees.
Audit fees consist of fees for the audit of our annual financial statements or services that are normally provided in connection with statutory and regulatory filings or engagements.
Audit-Related Fees.
Audit-related fees included fees relating to the review of our quarterly financial statements.
Tax Fees.
Tax fees included tax compliance, tax planning, tax advice and various taxation matters.
All Other Fees.
All other fees consists of services provided by our principal accountant other than audit, audit-related and tax services, including prospectus and other offering related work.
Pre-Approval
Policies
All audit and
non-audit services performed by our auditors for the 2007 and 2006 fiscal years
were pre-approved by our audit committee.
It is our policy that all audit and non-audit services performed by our
auditors will continue to be pre-approved by our audit committee.
Off-Balance
Sheet Arrangements
We have no
off-balance sheet arrangements to report.
3
Disclosure of Contractual Obligations
In the normal
course of business we are obligated to make future payments. These obligations represent contracts and
other commitments that are known and committed.
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Payment Due by Period
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Total
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Less than
1 year
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1 3 years
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3 5 years
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More than
5 years
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Long-term debt
obligations
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Capital
(finance) lease obligations
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Operating lease
obligations
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$
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1,122,543
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$
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471,166
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$
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651,377
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Purchase
obligations
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Other long-term
liabilities reflected on the Companys balance sheet under the GAAP of the
primary financial statements
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Total
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$
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1,122,543
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$
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471,166
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$
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651,377
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Audit
Committee
We have
established an audit committee in accordance with section 15 U.S.C.
78c(a)(58)(A). Each of the following directors serves on the audit committee:
Mssrs. Squires, Watkins and Dallas. See
the section entitled Audit Committee in our Annual Information Form for
the year ended December 31, 2007, which is filed as Exhibit 99.1 to
this Annual Report on Form 40-F.
Undertaking
We undertake to
make available, in person or by telephone, representatives to respond to
inquiries made by the Commission staff, and to furnish promptly, when required
to do so by the Commission staff, information relating to: the securities
registered pursuant to Form 40-F; the securities in relation to which the
obligation to file an Annual Report on Form 40-F arises; or transactions
in said securities.
Consent
to Service of Process
We have previously
filed a Form F-X in connection with the class of securities in relation to
which the obligation to file this Annual Report on Form 40-F arises. Any change to the name and address of the
agent for service for service of process shall be communicated promptly to the
Securities and Exchange Commission by an amendment to the Form F-X.
4
SIGNATURES
Pursuant to the
requirements of the Exchange Act, the Registrant certifies that it meets all of
the requirements for filing on Form 40-F and has duly caused this Annual
Report to be signed on its behalf by the undersigned, thereto duly authorized.
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CANADIAN SUPERIOR ENERGY INC.
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By:
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/s/ CRAIG MCKENZIE
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Name:
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Craig McKenzie
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Title:
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Chief Executive Officer
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Date:
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March 30, 2008
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5
EXHIBITS
Exhibit
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Description
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99.1
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Annual Information Form of the Registrant for
the twelve-month period ended December 31, 2007.
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99.2
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Consolidated Audited Financial Statements of the
Registrant for the twelve-month period ended December 31, 2007, including
Auditors Report to the Shareholders.
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99.3
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Managements Discussion and Analysis of the
Registrant for the twelve-month period ended December 31, 2007.
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99.4
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Code of Ethics.
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99.5
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Report of Meyers Norris Penny LLP on Internal
Control over Financial Reporting.
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99.6
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Consent of Meyers Norris Penny LLP.
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99.7
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Consent of GLJ Petroleum Consultants Ltd.
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99.8
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Certifications of Chief Executive Officer pursuant
to Rule 13a-14(a).
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99.9
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Certifications of Chief Financial Officer pursuant
to Rule 13a-14(a).
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99.10
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Certifications of Chief Executive Officer pursuant
to Rule 13a-14(b) and Section 1350 of Chapter 63 of Title 18
of the United States Code (18 U.S.C. 1350).
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99.11
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Certifications of Chief Financial Officer pursuant
to Rule 13a-14(b) and Section 1350 of Chapter 63 of Title 18
of the United States Code (18 U.S.C. 1350).
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6
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