EnerNorth Industries Inc. (EPS) (AMEX: EGY) (Frankfurt Stock Exchange: EPW) (www.epsx.com) is an integrated energy source and service company that is presently entering a dynamic stage of corporate growth and expansion. The company is comprised of two distinct operating divisions, which together form a powerful platform for high and sustainable growth.

EPS operates through the co-ordination of its subsidiaries into an ‘Oil & Gas Division’ and an ‘Engineering & Offshore Division’. The companies are related and complimentary, but each subsidiary has a different emphasis. Incorporated to operate as stand alone profit centers; they combine to form a proven business model to build shareholder value.

INDUSTRIAL & OFFSHORE DIVISION

The Company’s Industrial & Offshore Division consists of M&M Engineering, and M& M Offshore Limited.

M&M ENGINEERING LIMITED, established in 1968, has one principal wholly owned subsidiary, M&M Offshore Limited ("M&M Offshore"). M&M Engineering is an industrial, mechanical and electrical contractor. M&M Offshore (i) produces steel components for structures and heavy industry; (ii) manufactures pressurized vessels and tanks; and (iii) provides in-plant fabrication, welding and assembly services for the offshore oil industry at its 40,000 square foot and 15 acre production yard in St. John’s, Newfoundland.

Recently, Maersk Contractors Newfoundland Limited invited proposals from Canadian and Newfoundland Engineering Consultants, Suppliers and Fabricators for subcontracts of skidded and packaged system assemblies optimizing a Floating Production Storage and Offloading (FPSO) unit to develop the Husky Oil White Oil & Gas field off the coast of Newfoundland. The estimated cost of this production facility is $1.8 billion.

M&M has proven expertise in certain facets of this work and M&M has the facilities required for large scale module fabrication and assembly. In addition to M&M’s St. John’s production yard, M&M also has available a 147,000 square feet of fully enclosed fabrication facility on 40 acres of land adjacent to a deep sea quay at Port aux Basques, Newfoundland, along one of the major sea lanes of the world. The complex is ideal for both off-shore and onshore projects. Through this facility M&M can offer large off-shore infrastructure projects a variety of multi-metal fabrication, marine refurbishment and outfitting capabilities with a combined 187,000 square feet of preparation, storage, fabrication and assembly space which is extensive enough to enable large projects to be undertaken, year round.

MARKET GROWTH

The emergence of Canada’s east coast offshore oil & gas development is creating tremendous demand for east coast engineering and construction companies like M&M. For example, the Husky Oil White Rose Oil Field Floating Production, Storage and Offloading Platform is expected to cost approximately $1.8 billion to initially build. Ongoing service and maintenance work for such a large infrastructure should create a continuing revenue stream for local contractors like M&M.

Inco’s decision to buy out the minority partners in the vast Voisey’s Bay, Newfoundland nickel deposit could be an indication that the construction of the required infrastructure will soon follow. The province of Newfoundland has made clear their expectation for much of the related infrastructure to occur in Newfoundland. Depending on the scope of work infrastructure development could amount up to $2.0 billion and thus create more demand for M&M and other engineering and construction companies in Newfoundland.

The need for such rapid infrastructure expansion in Newfoundland in off-shore oil & gas field development, power generation and mineral resource development creates enormous opportunities for engineering and construction companies, especially those with the required facilities in Newfoundland. M&M has both the facilities and the 33-year history of experience to take advantage of this growth.

OIL & GAS DIVISION

PRINCE EDWARD ISLAND PROPERTY The Company has recently acquired a 25% interest in a property consisting of over 500,000 acres under permit for both coalbed methane and conventional gas. The property is located within central Prince Edward Island, Canada and is underlain by Carboniferous and Permian sedimentary strata of the Maritimes Basin. Detailed stratigraphic correlation of drill well data has confirmed the presence of 20 coal seams of 2-3 meters in thickness and total accumulations of up to 40 meters underlie the property. Studies have shown that the coal rank is sufficient to produce high gas values. Source rock studies indicate that the early Carboniferous rocks are oil prone and the upper Carboniferous rocks are gas prone. In addition excess coal gas expelled during coalification may have charged nearby reservoirs. The conventional hydrocarbon potential of the Maritimes Masin is exemplified by the Stoney Creek oil and gas field and the East Point E-49 gas discovery and the recent discoveries onshore New Brunswick. The Stoney Creek field produced over its lifetime 800,000 barrels of oil and 28 MMcf of natural gas. The East Point E-49 well, located just off-shore the north east point of Prince Edward Island, produced 5.3 MMcf/day from a 12 meter sandstone interval during drill stem tests with an estimated 77.3 Bcf in place. The onshore New Brunswick discoveries have indicated a potential of 300 Bcf of natural gas. These examples demonstrate that the Carboniferous rocks of eastern Canada are capable of generating and retaining hydrocarbons. EPS believes that the Prince Edward Island property offers excellent potential for both coalbed methane and conventional gas resources and plans an exploration program consisting of a detailed assessment of existing seismic data and available drill well logs as well as acquiring new data in prospective areas to indicate drill targets. ONTARIO PROPERTIES EPS holds interests ranging from 22.5%-6.25% in the Dover, Gosfield and Aldborough Townships of Ontario. These properties encompass approximately 2,250 acres of which 326 acres are held by the production two oil wells and one gas well. EPS plans a summer seismic program to delineate further drill targets and plans to participate in drilling a horizontal well in the summer.

BIGSTONE AREA, ALBERTA EPS holds an average 20% working interest in three sections of land with three producing gas wells in the Bigstone Area (Twp 61-W5) of Alberta. Two of the gas wells are operated by BP Amoco and one gas well is operated by Talisman Energy.
CHERHILL, ALBERTA EPS holds a 30% interest in the Cherhill property. The Cherhill prospect indicates a 2.5 metre (approximately 8 feet) natural gas pay zone in the lower Belly River formation.
FARROW, ALBERTA The Company earned a 31.5% interest in a half section of land (320 acres) by paying 75% of the costs of 4 square miles of 3D seismic data. The well was drilled out then cased as an oil well and stimulated with a 40 tonne frac which resulted in a productive response from the Glauconite formation. The pump jack and battery facilities are in place and the well is currently production testing and producing oil. Reservoir pressure was measured at 1100 psig and 95 barrels of oil was recovered in 20 hours. Stabilized rates and reserve size are yet to be determined although a neighbouring well, producing from the same Glauconite formation, has reported 55,000 barrels of oil production in the past six years. Further development drilling could allow up to an additional 7 wells on this half section of land.
SIBBALD PROPERTY ALBERTA The Sibbald property is located in Townships 28 and 29, Range 02 W4M, approximately 160 miles east of Calgary, Alberta. EPS holds an average 50% working interests in approximately 5,760 gross acres of land. Three wells are currently producing gas from the Bakken Formation of the Mississippian Period. EPS and its joint venture partners are currently reviewing data for a work over and tie in of an additional well in this area and assessing opportunities for further exploration and production recovery.
OLDS-INNISFAIL PROSPECT ALBERTA The Olds-Innisfail prospect encompasses 6 sections of land (3840 gross acres). The initial exploration consisted of 3 prospective drilling locations of 2 sections (1280 gross acres) each- a test well and an earned section. The Company has a 25% before pay out and 12.5% after pay out in each of the test wells and earns a 12.5% interest in an additional section (640 acres) by drilling each test well. To date the Company has participated in the drilling of 3 test wells and earned a 12.5% working interest in 3 additional sections. One test well is a suspended Basal Quartz gas well pending completion. One test well is a shut in Viking Gas well that flow tested at a stabilized rate of 500,000 cubic feet/day and one test well was dry and abandoned.	Olds-Innisfail Prospect

MARKET GROWTH

According to a report by Banc Boston Robertson Stephens presently 10% of electricity production in North America is fueled by natural gas. Natural gas consumption by the utility industry is expected to grow significantly, increasing 142% by 2010. Utilities will then represent 25% of natural gas consumption in the U.S., versus about 14% today. The Department of Energy forecasts a quadrupling of gas-fired generating capacity during this period. By the year 2010 it is anticipated that 40% of electricity production in North America will be generated by natural gas. The demand/supply effect of increasingly more power plants consuming natural gas could bode well for natural gas producers with long term supply contracts and price increases.

A recent announcement by OPEC to reduce supply of oil exports in an attempt to hold oil prices at US 25.00 per barrel suggests continuing high yields for oil and also gas producers.

PEI has one of the highest costs of energy in Canada and island electricity and heating requirements represent a ready market for lower cost natural gas and coal-bed methane. However the most promising market of all, the northeastern United States, is as close as the Sable Pipe line. The proposed pipeline is within 41 miles of the PEI coastline and the existing Confederation bridge is designed to hang a gas pipeline.

CORPORATE STRATEGY:

The strong potential of EPS is underscored by major market driven opportunities. At present there is an acute shortage of power generation in developing countries. In North America there is an over reliance on imported oil and expanding demand for natural gas. The burgeoning development of Canada’s east coast off-shore oil & gas fields is creating opportunities for large scale infrastructure projects for M&M. EPS intends to explore and develop oil and gas properties for commodity based cash flow and income and continue to expand the manufacturing business of its Engineering & Contracting Division. EPS plans to develop its divisions into new geographic areas and complimentary lines of business.

The Company also may from time to time acquire, or enter into strategic alliances with, complementary businesses to achieve these objectives.

Selected Financial Data

				Fiscal Year Ended	Fiscal Year Ended	Third Quarter	Third Quarter
				30-Jun-00	30-Jun-01	31-Mar-02	31-Mar-01
				Audited	Audited	Unaudited	Unaudited
Revenues				$18,924,369	$19,153,058	$16,669,646	$15,205,027
Gross Margin				$3,796,830	$2,512,646	$2,233,998	$1,544,960
EBITDA				($263,638)	$210,980	$723,546	($ 52,762)
Earnings (loss) from continuing operations(1)				($1,436,907)	$525,594(1)	($92,556)	$ 687,294
Assets				$23,511,208	$19,050,175	$26,070,546	$20,257,112
Equity				$12,107,357	$11,357,441	$20,793,567	$13,578,430
(1) Earnings from continuing operations before one time non-cash charge of $1.5 million-June 2001

Certain statements contained herein may constitute ``forward-looking statements'' within the meaning of Section 21E(i)(1) of the United States Securities Exchange Act of 1934. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause EnerNorth Industries Inc.'s actual results to be materially different from any future results expressed or implied by these statements. Such factors include the following: general economic and business conditions, changes in demand for EnerNorth Industries Inc. 's services, changes in competition, the ability of EnerNorth Industries Inc. to integrate acquisitions or complete future acquisitions, interest rate fluctuations, currency exchange rate fluctuations, dependence upon and availability of qualified personnel and changes in government regulation. In light of these and other uncertainties, the forward-looking statements included in this release should not be regarded as a representation by EnerNorth Industries Inc. that EnerNorth Industries Inc. 's plans and objectives will be achieved.

MILESTONES & DEVELOPMENTS