The accompanying notes to consolidated financial statements
are an integral part of these consolidated balance sheets

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The accompanying notes to consolidated financial statements are
an integral part of these consolidated statements of loss and comprehensive loss.

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     The accompanying notes to consolidated financial statements are an integral part of these consolidated statements of shareholders' equity

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The accompanying notes to consolidated financial statements are an integral  

part of  these consolidated statements of cash flows

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1.

ORGANIZATION AND ABILITY TO CONTINUE OPERATIONS

Energy Exploration Technologies ("we", "our company" or "NXT") was incorporated under the laws of the State of Nevada on September 27, 1994 and continued in the Province of Alberta on October 24, 2003.  We are a technology-based reconnaissance exploration company which utilizes our proprietary stress field detection (SFD) remote-sensing airborne survey technology to quickly and inexpensively identify and high-grade oil and natural gas prospects.  We conduct our reconnaissance exploration activities, as well as land acquisition, drilling, completion and production activities through our wholly-owned subsidiaries-NXT Energy USA Inc. ("NXT Energy USA") and NXT Energy Canada Inc. ("NXT Energy Canada"), in the United States and Canada, respectively. NXT Aero USA Inc. ("NXT Aero USA") and NXT Aero Canada Inc. ("NXT Aero Canada") are the two subsidiaries through which we conduct the aerial surveys.

For the nine month interim period ended September 30, 2003, we incurred a loss of $1,007,273 and our ability to continue as a going concern will be dependent upon successfully identifying hydrocarbon bearing prospects, and financing, developing, extracting and marketing oil and natural gas from these prospects for a profit. We anticipate that we will continue to incur further operating losses until such time as we receive additional revenues from increased production with respect to currently held prospects or through prospects we identify and exploit for our own account.

We can give no assurance that any, or all, pending projects will generate sufficient revenues to cover our operating or other costs.  Should this be the case, we would be forced, unless we can raise sufficient additional working capital, to suspend our operations, and possibly even liquidate our assets and wind-up and dissolve our company.

These consolidated financial statements are prepared using generally accepted accounting principles that are applicable to a going concern, which assumes the realization of assets and the settlement of liabilities in the normal course of operations. Should this assumption not be appropriate, adjustments in the carrying amounts of the assets and liabilities to their realizable amounts and the classification thereof will be required and these adjustments and reclassifications may be material.

2.

SIGNIFICANT ACCOUNTING POLICIES

Basis Of Presentation

We have prepared these consolidated financial statements for our three-month and nine-month interim periods as at and ended September 30, 2003 and 2002 in accordance with accounting principles generally accepted in the United States for interim financial reporting.  While these financial statements for these interim periods reflect all normal recurring adjustments, which, in the opinion of our management, are necessary for fair presentation of the results of the interim period, they do not include all of the information and notes required by accounting principles generally accepted in the United States for complete financial statements.  Refer to our consolidated financial statements included in our annual report on Form 10-K for our fiscal year ended December 31, 2002.

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Consolidation

We have consolidated the accounts of our wholly-owned subsidiaries with those of NXT in the course of preparing these consolidated financial statements.  All significant inter-company balances and transactions amongst NXT and its subsidiaries have been eliminated as a consequence of the consolidation process, and are therefore not reflected in these consolidated financial statements.

Estimates And Assumptions

The preparation of these consolidated financial statements in accordance with generally accepted accounting principles in the United States requires our management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of these consolidated financial statements and the reported amount of revenues and expenses during the reporting periods.  Actual results may differ from those estimates.

Cash And Cash Equivalents

For purposes of preparing the consolidated balance sheets and statements of cash flows contained in these consolidated financial statements, we consider all investments with original maturities of ninety days or less to constitute "cash and cash equivalents".

Debt Issuance Costs

We amortize debt issuance costs on a straight-line basis over the life of the related debt.

Fair Value Of Financial Instruments

Our financial instruments consist of cash and cash equivalents, accounts receivable, note receivable, trade payables, wages and employee benefits payable, and accrued liabilities.  The book values of these financial instruments approximate their fair values due to their short-term to maturity and similarity to current market rates.  It is the opinion of our management that we are not exposed to significant interest, currency or credit risks arising from these financial instruments.

Aircraft And Flight Equipment Held For Sale

Both aircraft were sold in 2002. We carry our flight equipment held for sale at the lower of the carrying amount or the fair value less cost to sell. These assets are not depreciated as long as they are held for sale.  The remaining flight equipment was written off in the third quarter of 2003.

Oil And Natural Gas Properties

We follow the full cost method of accounting for oil and natural gas properties and equipment whereby we capitalize all costs relating to our acquisition of, exploration for and development of oil and natural gas reserves.  These capitalized costs include:

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We only capitalize overhead that is directly identified with acquisition, exploration or development activities. All costs related to production, general corporate overhead and similar activities are expensed as incurred.

Under the full cost method of accounting, capitalized costs are accumulated into cost centers on a country-by-country basis.  These costs, plus a provision for future development costs (including estimated dismantlement, restoration and abandonment costs) of proved undeveloped reserves, are then depleted and depreciated using the unit-of-production method, based on estimated proved oil and gas reserves as determined by independent engineers.  For purposes of the depletion and depreciation calculation, proved oil and gas reserves are converted to a common unit of measure on the basis of their approximate relative energy content. NXT was a development stage enterprise until 2002 and any net revenues received prior to achieving commercial production were accounted for as an adjustment to capitalized costs. NXT achieved commercial operations at the beginning of the second quarter of 2002.

In applying the full cost method of accounting, capital costs in each cost center less accumulated depletion and depreciation and related deferred income taxes are restricted from exceeding an amount equal to the sum of the present value of their related estimated future net revenues discounted at 10% less estimated future expenditures, and the lower of cost or estimated fair value of unproved properties included in the costs being amortized, net of related tax effects.  Should this comparison indicate an excess carrying value, a write-down would be recorded.

The carrying values of unproved oil and natural gas properties, which are excluded from the depletion calculation, are assessed on a quarterly basis to ascertain whether any impairment in value has occurred.  This assessment typically includes a determination of the anticipated future net cash flows based upon reserve potential and independent appraisal where warranted.  Impairment is recorded if this assessment indicates the future potential net cash flows are less than the capitalized costs.

All recoveries of costs through the sale or other disposition of oil and gas properties and equipment are accounted for as adjustments to capitalized costs, with no gain or loss recorded, unless the sale or disposition involves a significant change in the relationship between costs and the value of proved reserves or the underlying value of unproved property, in which case the gain or loss is computed and recognized.

We conduct oil and natural gas exploration, drilling, development and production activities with joint venture partners.  These consolidated financial statements reflect only our proportionate interest in these activities.

Other Property And Equipment

We carry our other capitalized property and equipment at cost, and depreciate or amortize them over their estimated service lives using the declining balance method as follows:

When we retire or otherwise dispose of our other capitalized property and equipment, we remove their cost and related accumulated depreciation or amortization from our accounts, and record any resulting gain or loss in the results of operations for the period.  Our management periodically reviews the carrying value of our property and equipment to ensure that any permanent impairment in value is recognized and reflected in our results of operations.

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Revenue Recognition

Revenue associated with sales of crude oil and natural gas is recorded when title passes to the customer.

Research And Development

We expense all research and development expenditures we incur to develop, improve and test our SFD survey system and related components.

Survey Operations and Support

We expense all survey operations and support expenditures we incur and these consist primarily of the cost to:

Foreign Currency Translation

Our only operations outside of the United States are in Canada.  Foreign currency translation adjustments resulting from the translation of the financial statements of our Canadian subsidiaries, whose functional currency is Canadian dollars, into U.S. dollar equivalents for purposes of consolidating our financial statements, are included in other comprehensive income (loss).  For purposes of consolidation, we use the following methodology to convert Canadian dollar denominated accounts and transactions into U.S. dollars:

We record the cumulative gain or loss arising from the conversion of the Canadian dollar denominated accounts and transactions into U.S. dollars as a foreign currency translation adjustment as a component of accumulated other comprehensive income or loss for that period.  

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Basic And Diluted Loss Per Share

Our basic loss per share is computed in accordance with SFAS No. 128, "Earnings Per Share", by dividing the net loss for the period by the weighted average number of common shares outstanding for the period.  Our diluted loss per share is computed, also in accordance with SFAS No. 128, by including the potential dilution that could occur if holders of our dilutive securities were to exercise or convert these securities into common shares.   

In calculating our basic and diluted loss per share, we take into consideration deemed distributions analogous to the declaration of a dividend attributable to the beneficial conversion features affording a discount or benefit to the holders of our securities.  See note 9.

Stock-Based Compensation For Employees And Directors

In accounting for the grant of our employee and director stock options, we have elected to follow Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees" ("APB 25"), and related interpretations. Under APB 25, companies are not required to record any compensation expense relating to the grant of options to employees or directors where the awards are granted upon fixed terms with an exercise price equal to fair value and the only condition of exercise is continued employment.  For 2003, compensation expense recorded in the books of account relating to the granting of options to employees and directors was $89,100 (Nil – 2002).   See note 11.

Recent Accounting Pronouncements

In August 2001, the US Financial Accounting Standards Board (FASB) issued SFAS No. 143, "Accounting for Asset Retirement Obligations".  SFAS No. 143 requires that the fair value of a liability for an asset retirement obligation be recognized in the period in which it is incurred if a reasonable estimate of fair value can be made.  The associated asset retirement costs are capitalized as part of the carrying amount of the long-lived asset.  We were required to adopt the provisions of SFAS No. 143 on January 1, 2003.  We have sold our U.S. properties, along with the associated abandonment liabilities, and we have no retirement liabilities associated with the Canadian properties.  Therefore, this SFAS has no impact on us at this time.

In January 2003, the FASB issued Statement No. 148 “Accounting for Stock-Based Compensation – Transition and Disclosure, an Amendment of FASB Statement No. 123” (FAS 148).  FAS 148 amends FAS 123 “Accounting for Stock-Based Compensation”, to provide alternative methods of transition for a voluntary change to the fair-value method of accounting for stock-based compensation.  The impact of this accounting standard is discussed more fully in note 11.

The following standards issued by the FASB do not impact us at this time:

3.

DISCONTINUED OPERATIONS

In January 2003, we adopted a formal plan to divest our U.S. oil and gas properties.  On May 9, 2003 we closed a sale transaction with our U.S. joint venture partner to sell the properties for total consideration of $1,450,000 with proceeds of $720,000 in cash and the redemption of all the outstanding preferred shares.  The effective date of the transaction was March 1, 2003.  For reporting purposes, the results of operations and the

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financial position of the properties have been presented as discontinued operations.  Accordingly, prior period financial statements have been reclassified to reflect this change.

Income (loss) on discontinued operations includes a gain on sale of the properties of $175,685 and net income from the properties for the two month period up to the effective date of March 1, 2003 of $22,915.

4.

NOTE RECEIVABLE FROM OFFICER

In September 1998, we loaned the sum of CDN $54,756 (US $35,760 as of that date) to one of our officers in connection with his relocation to Calgary, Alberta.  Pursuant to the terms of an underlying promissory note, the officer was required to repay the loan on a monthly basis, with a balloon payment due on October 3, 2003. The officer left our company in 2002 and the outstanding balance, plus accrued interest at 5.5% compounded semi-annually, is due on October 3, 2003.

5.

AIRCRAFT AND FLIGHT EQUIPMENT HELD FOR SALE

In December 2001, management decided to place on the market our two aircraft and related flight equipment in order to decrease our operating costs. The  Piaggio Avanti P180 aircraft was sold in the second quarter of 2002 and the remaining aircraft was sold in the fourth quarter of 2002.  The remaining flight equipment was written off in the third quarter of 2003.

Summarized below are our capitalized costs for the aircraft and flight equipment held for sale:

6.

OIL AND NATURAL GAS PROPERTIES

Summarized below are the oil and natural gas property costs we capitalized for the nine months ended September 30, 2003 and 2002 and as of September 30, 2003 and December 31, 2002:

Net oil and natural gas property costs at September 30, 2003 are comprised of  $187,146  ($781,446 at December 31, 2002) of proved property costs and $1,770,649 ($1,982,473 at December 31, 2002) of unproved property costs.

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The impairment of oil and natural gas properties also includes the write-down of the cost of drilling and completing wells which are either non-commercial or which we are unable to complete for technical reasons. While, as noted below, our management believes in the prospective commercial viability and non-impairment of the overall prospects of which each of these wells are a part and is continuing active exploration and development activities with respect to each of these prospects, we have nevertheless written-off these individual well costs as an impairment cost since this determination was made prior to the establishment of proved reserves.  At September 30, 2003 there were no indications of impairment of our Canadian full cost center.

At the end of each quarter, our management performs an overall assessment of each of our unproved oil and natural gas properties to determine if any of these properties has been subject to any impairment in value (see note ).  Based upon these evaluations, our management has determined that each of our oil and natural gas properties continued to have prospective commercial viability as of these dates.    While we are currently conducting exploration and development programs with respect to each of these unproved oil and natural gas properties, we anticipate that all of these properties will be evaluated and the associated costs transferred into the amortization base or be impaired over the next five years.

7.

OTHER PROPERTY AND EQUIPMENT

Summarized below are our capitalized costs for other property and equipment as of September 30, 2003 and December 31, 2002:

8.

LONG-TERM DEBT

On May 1, 2002, we completed the sale of our Piaggio Avanti P180 aircraft to a third party and used the proceeds to settle the principal and interest due on this loan in full.  See note .  We also expensed the remaining unamortized debt issuance costs of $22,805 during 2002.

9.

PREFERRED STOCK

The series 'A' preferred shares are not entitled to payment of any dividends, although they are entitled under certain circumstances to participate in dividends on the same basis as if converted into common shares.  Each series 'A' preferred share carries a $7.50 liquidation preference should our company wind-up and dissolve.  Each series 'A' preferred share is convertible by the holder into common shares based upon a $7.50 per share conversion price, subject to adjustment should NXT sell common shares or common share purchase options or warrants at prices less than $7.50 per share in specified circumstances.

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All of the outstanding preferred shares were redeemed effective May 9, 2003 as part of the consideration received for the sale of the U.S. properties.

10.

PERFORMANCE WARRANTS

On August 1, 1996, we granted a performance-based contractual right to acquire NXT warrants to the licensor of our SFD technology, Momentum Resources Corporation ("Momentum Resources"), in connection with the amendment of our exclusive SFD technology license with Momentum Resources to use the SFD technology for hydrocarbon exploration.  The primary purpose of the amendment was to indefinitely extend the termination date of the license.  Pursuant to this contractual right, Momentum Resources is entitled to a separate grant of warrants entitling it to purchase 16,000 common shares at the then current trading price for each month after December 31, 2000 in which production from SFD-identified prospects during that month exceeds 20,000 barrels of hydrocarbons.  Momentum Resources has not earned any warrants under the SFD technology license as of September 30, 2003.

11.

EMPLOYEE AND DIRECTOR OPTIONS

We have summarized below all outstanding options under our various stock option plans and arrangements as of September 30, 2003:

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The employee options outstanding as of September 30, 2003 vest over three to five years from the grant date, depending upon the recipient, based upon the continued provision of services as an employee.  The director options vest one-third each on the first through third anniversaries of the grant date, respectively, based upon the continued provision of services as a director.  Both the employee and director options generally lapse, if unexercised, five years from the date of vesting. The independent grant of 300,000 options in June, 2003 to a consultant vested upon grant.

Compensation Expense Associated With Grant of Options

At September 30, 2003, the company has four stock-based employee compensation plans, which are described more fully above.  The company accounts for those plans under the recognition and measurement principles of APB Opinion No. 25 Accounting for Stock Issued to Employees, and related Interpretations.  No stock-based employee compensation cost is reflected in net loss if options granted under those plans had an exercise price equal to the market value of the underlying common stock on the date of grant. For 2003, $89,100 (2002 - $Nil) of compensation cost has been recognized in net loss.  The following table illustrates the effect on net loss and loss per share if the company had applied the fair value recognition provisions of FASB Statement No. 123, Accounting for Stock-Based Compensation, to stock-based employee compensation.

12.

COMMITMENTS

The lease for our company’s principal offices expired on January 31, 2003.  A new sub-lease from another tenant has been negotiated with a term of eighteen months ending July 31, 2004.  The space is approximately 6,600 square feet and the monthly cost is about $11,600 CDN.

13.

INVESTOR RELATIONS OPTIONS

On May 15, 2001, as additional compensation to our investor relations consultant pursuant to an investor and public relations services agreement, we granted that consultant options to purchase 155,000 common shares at $2.50 per share.  The underlying agreement provided that 50,000 options would vest immediately, and an additional 35,000 options would vest upon each of the first, second and third anniversary dates of the

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agreement, respectively.  These options lapse, to the extent vested and unexercised, five years after the date of vesting.  Pursuant to SFAS No. 123, for our nine-month period ended September 30, 2003, we recorded compensation expense, as part of administrative expenses, determined in accordance with the Black-Scholes option pricing model in the amount of $17,048 ($25,688 for our nine month period ended September 30, 2002) in connection with the grant and vesting of these options.  The agreement was terminated on May 15, 2003.

14.

SEGMENT INFORMATION

We currently operate in only one business segment, oil and natural gas exploration.  We intend to develop oil and natural gas exploration prospects identified using our proprietary SFD airborne survey technology either directly or with joint venture partners.  We do not currently sell or market our SFD data as a separate product to third parties.

Prior to the first quarter of 2002, the majority of our revenues were derived from interest earned on cash and cash equivalents.

Summarized below with respect to our three-month and nine-month periods ended September 30, 2003 and 2002 is geographic information relating to:

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Summarized below is geographic information relating to our assets as of September 30, 2003 and December 31, 2002, allocated amongst the geographic areas in which the assets were physically located or principally connected:

In preparing the above tables, we have eliminated all inter-segment revenues, expenses and assets.

15.

SUBSEQUENT EVENT

At a special meeting of the shareholders, held October 24, 2003, the continuance of NXT from Nevada to Alberta, Canada was approved.  The continuance is essential to streamlining our operations as we no longer have ongoing US interests, and is consistent with one of our main objectives of expanding our operations in Canada.  This change will reduce our administrative costs and simplify our processes.  

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ITEM 2 -    MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Special Note Regarding Forward Looking Statements

In this report we have made a number of statements, which we refer to as "forward-looking statements", which generally relate to our present expectations or predictions as to the possible occurrence of future events or the existence of trends and factors that may impact our future plans and operating results.  These forward-looking statements are based upon assumptions and analyses made by us in the context of our current business plan and information currently available to us and in light of our experience and perceptions of historical trends, current conditions and expected future developments and other factors we believe to be appropriate in the circumstances.  

You can generally identify any forward-looking statements contained in this report through words and phrases such as "seek", "anticipate", "believe", "estimate", "expect", "intend", "plan", "budget", "project", "will be", "will continue", "will likely result", and similar expressions.  Forward-looking statements that may be contained in this report would, for example, include statements relating to the timing and likelihood of success of our drilling and production plans.

Whenever you read any forward-looking statements contained in this report you should remain mindful that actual results may vary from the anticipated or predicted results as expressed by the forward-looking statements for a number of reasons or factors including, but not limited to, changes in our business plan and corporate strategies, changes in political climate and fluctuations in forecasted oil and natural gas prices.  Moreover, you must read each forward-looking statement in context with, and an understanding of, the various other disclosures concerning our company and our business made elsewhere in this report.  

Additionally, the various uncertainties and risk factors described in this report are not exhaustive, and new risks and uncertainties may emerge from time to time.  It is not possible for us to predict all risks and uncertainties, nor can we assess the impact of all risks and uncertainties on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statement.  Consequently, we can give you no assurance that the results or developments anticipated or predicted by us will be realized, or even if realized, that they will have the expected consequences or effects on us.  

OVERVIEW

We are a reconnaissance exploration company that utilizes our Stress Field Detector (SFD) technology, which is a remote-sensing airborne survey technology comprised of SFD and integrated electronic data acquisition, processing and interpretation subsystems and software.

We use our SFD to survey large exploration areas from aircraft at speeds of approximately 200 mph to identify and prioritize leads for further evaluation and potential drilling.   SFD has been successfully field tested for independent geologists and joint venture partners.  Our SFD affords us the relatively inexpensive ability to obtain analysis and interpretation of potential hydrocarbon prospects in a matter of days or weeks, as compared to months or years, as in the case of the seismic methods currently employed in wide-area exploration activities.  These advantages can dramatically reduce finding costs as well as the exploration time cycle. Finding costs include seismic acquisition, purchasing mineral rights and drilling and completing exploration wells. Once SFD prospects are identified, highly focused conventional geological and geophysical methods are employed to evaluate the potential commercial viability of the prospects.

We conduct our activities through two wholly-owned operating subsidiaries:  NXT Energy USA, Inc., which focuses on United States-based exploration and NXT Energy Canada, Inc. which focuses on Canadian-based exploration.  All survey flight activities are conducted through our subsidiaries, NXT Aero USA, Inc. and NXT Aero Canada, Inc. NXT concentrates on research and development efforts to improve our SFD survey system, and oversees the operations of and provides management, financial and administrative services to our subsidiaries.

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Our rights to use our SFD technology arises from an SFD technology license which we acquired from the owner and licensor of that technology, Momentum Resources, pursuant to which we received the exclusive world-wide right to use the SFD technology for hydrocarbon exploration purposes.  We are obligated under the terms of that license to pay Momentum Resources a fee equal to 1% of any Prospect Profits (as that term is defined in the license), which we may receive.

For additional and more detailed background information relating to our company and our business, refer to our annual report on Form 10-K for our fiscal year ended December 31, 2002.

Unless otherwise stated, all dollar references in this report are in U.S. dollars.

RESULTS OF OPERATIONS

Operating revenues

On May 9, 2003, we closed the sale of all of our U.S. properties. The sale price was $1,450,000 and the proceeds were $720,000 in cash with the balance made up by the redemption of all of the outstanding preferred shares. These shares had been issued in 1998 for $6,000,000. We pursued this sale as it provided us with the opportunity to raise cash and to remove the burdensome preferential rights associated with the preferred shares. Also, as long as the preferred shares were outstanding, there was the potential for a large dilution of the common shares which would increase if we raised any additional capital in the equity markets. These anti-dilution rights associated with the preferred shares were an obstacle to raising new capital. With this out of the way, we believe we are now in an improved position for raising capital and pursuing business opportunities.

Operating loss from continuing operations

We incurred an operating loss of $485,469 for our three-month interim period ended September 30, 2003, as compared to $412,979 for the corresponding interim period in 2002, representing a $72,490 (18%) overall increase.  The increase in our operating loss for our three-month interim period ended September 30, 2003 over the corresponding interim period in 2002 was primarily attributable to the following changes:  

We incurred an operating loss of $1,242,871 for our nine-month interim period ended September 30, 2003, as compared to $1,555,921 for the corresponding interim period in 2002, representing a $313,050 (20 %) overall decrease.  The decrease in our operating loss for our nine-month interim period ended September 30, 2003 over the corresponding interim period in 2002 was primarily attributable to the following changes:  

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Other income (expense)

Other income (expense) has decreased in the three month interim period ended September 30, 2003 from an income of  $44,892 in 2002 to income of $3,750 for the same period in 2003.

Other income (expense) has decreased in the nine month interim period ended September 30, 2003 from an income of  $130,401 in 2002 to income of $5,629 for the same period in 2003.  The 2002 income reflects the gain on sale of the Canadian property.

Income (loss) from discontinued operations

The loss from discontinued operations for the three-month interim period ended September 30, 2003 was $26,660 compared to $71,119 for the same period in 2002.  The loss for the third quarter of 2003 is attributable to the write off of the remaining aircraft equipment held for sale.  The loss in 2002 was attributable to our write down of our US oil and gas properties and aircraft and flight equipment held for sale.

The income from discontinued operations for the nine-month interim period ended September 30, 2003 was $166,322, which includes the gain on the sale of the properties of $175,685 and income from oil and gas operations of $22,915.  The loss in 2002 of $596,937 was attributable to our US oil and gas and survey flight operations.

Other comprehensive income

The foreign currency exchange loss for the three-month period ended September 30, 2003 was a decrease of $80,014 (86%) compared to the same period in 2002.  The gain for the nine-month period ended September 30, 2003 was an increase of $291,534 (1,569%) compared to the same period in 2002.  Comprehensive gains or losses arise in consolidating our accounting records for financial reporting purposes as a result of the fluctuation in United States – Canadian currency rates during the period.

Relationships And Transactions On Terms That Would Not Be Available From Clearly Independent Third Parties

We have not entered into any transactions during our nine-month interim period ended September 30, 2003 with any parties that are not clearly independent on terms that might not be available from other clearly independent third parties.

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LIQUIDITY AND CAPITAL RESOURCES

Sources Of Cash

The major sources of cash flow from September 2001 to September 30, 2003 were a private placement that closed in September 2001 of 3,803,684 common shares for total gross proceeds of $4,374,237 and a private placement that closed in September 2003 of 1,875,000 common shares for total gross proceeds of $750,000.

Current Cash Position And Historical Changes In Cash Position

Our cash position as of September 30, 2003 was $1,009,289 as compared to $585,070 as of December 31, 2002.   Our cash position as of September 30, 2002 was $566,805 as compared to $2,994,608 as of December 31, 2001.We now maintain the bulk of our cash in Canadian dollar accounts, consistent with our strategy of focusing our efforts on our Canadian properties.

Cash used in operating activities decreased by $612,108 (58%) to $449,940 for the three-month period ended September 30, 2003 as compared to the same period in 2002 primarily due to cash decreases in working capital changes.

Cash generated by financing activities increased $740,815 for the three-month period ended September 30, 2003 as a result of a private placement of 1,875,000 common shares.

Investing activities used cash of $225,754 in the three-month period ended September 30,2003 compared to $496,444 of cash generated in the same period in 2002. The main reasons for the decrease of $722,198 was the $333,687 decrease in accrued oil and gas property costs and trade payables and the $199,476 decrease in the proceeds on the sale of oil and natural gas properties.

Cash used in discontinued operations decreased by $623,084 (99%) to $5,591 for the three-month period ended September 30, 2003 as compared to the same period in 2002.

Other comprehensive income, specifically loss on foreign currency exchange, was  $13,128 in the three month period ended September 30,2003 compared to $93,142 for the same period in 2002.

Cash used in operating activities decreased by $1,241,440 (61%) to $790,977 for the nine-month period ended September 30, 2003 as compared to the same period in 2002 primarily due to the net loss for the 2003 period which decreased by $188,278 in 2003 from 2002, net of cash decreases on other items, primarily working capital changes.

Cash generated by financing activities increased $740,815 for the nine-month period ended September 30, 2003 as a result of a private placement of common shares.

Investing activities used cash of $566,625 in the nine-month period ended September 30,2003 compared to $221,975 of cash used in the same period in 2002. The main reason for the increase of $344,650 was the $193,206 increase in funds invested in oil and natural gas properties.

Cash generated by discontinued operations increased by $922,883 to $730,888 for the nine-month period ended September 30, 2003 as compared to the same period in 2002.

Other comprehensive income, specifically gains on foreign currency exchange, was  $310,118 in the nine-month period ended September 30, 2003 compared to $18,584 for the same period in 2002.

Plan Of Operation And Prospective Capital Requirements

We have approximately $ 783,000 cash on hand as of November 12, 2003 to fund our plans and to contribute toward our administration, operational and research and development requirements for the next twelve months.  

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We are expanding our activities in Canada and are also investigating international opportunities.  We have initiated discussions for a series of private placement offerings from which we expect to receive net proceeds of US $10,000,000.  The funds will be used in the execution of the corporate strategy for asset diversification in Canada and internationally.  The first phase of the fund raising was completed in the latter part of the third quarter for net proceeds of US $740,815.

We believe we currently have sufficient cash on hand to maintain a minimal level of operations for approximately one year.  

We can give no assurance that any projects in our pending programs will be commercial, or if commercial will generate sufficient revenues in time to cover our operating or other costs. Should this be the case, we would be forced, unless we can raise sufficient additional working capital, to suspend our operations, and possibly even liquidate our assets and wind-up and dissolve our company.  

OTHER MATTERS

Foreign Exchange

We recorded a $310,118 foreign currency translation gain for the nine months ended September 30, 2003 ($13,128 foreign currency translation loss for the three-month period ended September 30, 2003) compared to a gain of $18,584 ($93,142 foreign currency translation loss) for the same period in 2002 as a comprehensive income (loss) item on our statements of loss and comprehensive loss and shareholders' equity (deficit) in consolidating our accounting records for financial reporting purposes as a result of the fluctuation in United States-Canadian currency exchange rates during that period.  We cannot give you any assurance that our future operating results will not be adversely affected by currency exchange rate fluctuations.  

Effect Of Inflation

We do not believe that our operating results were unduly affected during the first nine months of fiscal 2003 or fiscal 2002 by inflation or changing prices.

Critical Accounting Policies

We follow the full cost method of accounting for oil and natural gas properties and equipment whereby we capitalize all costs relating to our acquisition of, exploration for and development of oil and natural gas reserves.  Our consolidated financial condition and results of operations are sensitive to, and may be adversely affected by, a number of subjective or complex judgments relating to methods, assumptions or estimates required under the full cost method of accounting concerning the effect of matters that are inherently uncertain.  For example:

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Recent Accounting Pronouncements

In August 2001, the US Financial Accounting Standards Board (FASB) issued SFAS No. 143, "Accounting for Asset Retirement Obligations".  SFAS No. 143 requires that the fair value of a liability for an asset retirement obligation be recognized in the period in which it is incurred if a reasonable estimate of fair value can be made.  The associated asset retirement costs are capitalized as part of the carrying amount of the long-lived asset.  We were required to adopt the provisions of SFAS No. 143 on January 1, 2003.  We have sold our U.S. properties, along with the associated abandonment liabilities, and we have no retirement liabilities associated with the Canadian properties.  Therefore, this SFAS has no impact on us at this time.

In January 2003, the FASB issued Statement No. 148 “Accounting for Stock-Based Compensation – Transition and Disclosure, an Amendment of FASB Statement No. 123” (FAS 148).  FAS 148 amends FAS 123 “Accounting for Stock-Based Compensation”, to provide alternative methods of transition for a voluntary change to the fair-value method of accounting for stock-based compensation.  The impact of this accounting standard is discussed more fully in note 11 to the consolidated financial statements.

The following standards issued by the FASB do not impact us at this time:

Management

Our success is dependent upon the continuing efforts of Mr. George Liszicasz, the inventor of the SFD technology and our Chief Executive Officer, who is responsible for the SFD technology and SFD interpretation activities.  The loss of Mr. Liszicasz would likely have a material adverse effect on our business, consolidated financial condition and results of operations.  While we have entered into an employment and non-competition agreement with Mr. Liszicasz, he nevertheless cannot be prevented from leaving NXT so long as he does not employ SFD technology for oil and natural gas exploration purposes.  We also do not carry key person life insurance policies on Mr. Liszicasz.

In addition, our President, Chief Financial Officer, and Vice President of Exploration (U.S.) left our company in 2002 leaving these positions vacant.  Our success will depend to a significant extent on our ability to engage one or more qualified oil and gas professionals to replace these executives.  Although we are currently engaged in discussions with qualified candidates to fill these executive positions, we can give you no assurance that these positions will be satisfactorily filled.  Our inability to fill these positions could have a material adverse effect on our business, consolidated financial condition and results of operations.

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ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

Not Applicable.

ITEM 4.  CONTROLS AND PROCEDURES

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and interim Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.   

Within 90 days prior to the date of this report, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and interim Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Exchange Act Rule 13a-14.  Based upon the foregoing, our Chief Executive Officer and our interim Chief Financial Officer concluded that our disclosure controls and procedures are effective in connection with the filing of this Quarterly Report on Form 10-Q for the quarter ended September 30, 2003.   

There were no significant changes in our internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation, including any significant deficiencies or material weaknesses of internal controls that would require corrective action.

PART II

ITEM 1 -    LEGAL PROCEEDINGS

In our quarterly report on Form 10-Q for the period ended June 30, 2003, we reported the current status of all material legal proceedings involving the Company and refer the reader to such report.

ITEM 2 -    CHANGES IN SECURITIES AND USE OF PROCEEDS

On September 11, 2003, the Company issued 1,875,000 shares of its common stock at $0.40 per share for total gross proceeds of $750,000. The shares were issued under the Company’s Confidential Offering Memorandum dated July 22, 2003, which was fully subscribed for.  The sale of theses shares of common stock was exempt from registration due to the exemptions found in Regulation D (“Reg. D”) and Regulation S (“Reg. S”), each promulgated by the Securities and Exchange Commission under the Securities Act of 1933. The Company paid no commissions or finders fees in connection with this offering.  The shares were sold to the followinf persons:   Bamako Investment Management Ltd, M.J. Buamaim, Jokada Inc., Bibi S. Daprile, Joseph John Hanson, Salem Al Zubaidi, Stahis I. Stathis, McLeod Hygiene Services Corp. Bonnie Maksymowich, Randy Maksymowich, LOM Securities (Bermuda) Limited, Trutta Resources Inc., Sandra Sims, Shewan Energy Corporation, Joanne Louise Scott, Douglas J. Rowe, Douglas Renwicke, Steve Rainbow, Peter A. Proly, Douglas G. McIntyre, Louis Miceli, Marcie A. Newman, Brent Marzolf, D. Alec McDougall, Lanny King McDonald, Brian A. Jones, Brian Paul Kohlhammer, Gary Layden, Thomas P. Barry, Saad Ibrahim, Annette Hutchinson, Global S.C. Communications Inc., William Daniel Gantous, Donald E. Foulkes, Mary Helen Carwardine, Labeed A. Ghaleb, Michael D. Fitzgerald, Igor Dmitriev, 796047 Alberta Ltd., Delores L. Bradley, Chris Bradley, Lloyd R. Lipsett, Neil Orr, 424360 Alberta Ltd., Gordon Ratcliffe, Ilona Meszaros, John & Vera Cryan, Joan McCarthy, Tibor Szenasi, Jim Currie, David J.W. Mitchell, Wayne Foster, Rodolfo Rivas, Thomas F. Riggs, Steve Barritt, Richard Blair, Colm McLoughlin, Dipak Suru, Michael Gerbich, Dariush Rakhshani, Majed O. Khalifa Alshuwaihi.

The sale of the common stock was exempt from registration pursuant to Rule 506 of Reg. D. Neither the Company nor any person acting on its behalf offered or sold these securities by any form of general solicitation or general

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advertising. The shares sold are restricted securities and the certificates representing these shares have been affixed with a standard restrictive legend, which states that the securities cannot be sold without registration under the Securities Act of 1933 or an exemption therefrom. Each purchaser represented to the Company that he was purchasing the securities for his own account and not for the account of any other persons. Each purchaser was provided with written disclosure that the securities have not been registered under the Securities Act of 1933 and therefore cannot be sold without registration under the Securities Act of 1933 or an exemption therefrom. Following is a list of the people that subscribed to this offering under Regulation D.

 Of the total 1,875,000 shares issued under this offering, 525,000 shares were issued in offshore transactions since the offerees were not in the United States and the purchasers were outside the United States at the time of the purchase. Moreover, there were no directed selling efforts of any kind made in the United States. All documents used in connection with the offers and sales of the securities offshore included statements to the effect that the securities have not been registered under the Securities Act of 1933 and may not be offered or sold in the United States or to U.S. persons unless the securities are registered under the Act or an exemption therefrom is available and that no hedging transactions involving those securities may not be conducted unless in compliance with the Act. Each offshore subscriber certified that he or it is not a U.S. person and is not acquiring the securities for the account or benefit of any U.S. person and agreed to resell such securities only in accordance with the provisions of Regulation S, pursuant to registration under the Act or pursuant to an available exemption from registration. The shares sold are restricted securities and the certificates representing these shares have been affixed with a standard restrictive legend, which states that the securities cannot be sold without registration under the Securities Act of 1933 or an exemption therefrom and the Company is required to refuse to register any transfer that does not comply with such requirements.

ITEM 3 -    DEFAULTS UPON SENIOR SECURITIES

Not Applicable.

ITEM 4 -    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

A Special Meeting of Shareholders of NXT was held on October 24, 2003, at which the re-incorporation of NXT from the State of Nevada into the Province of Alberta and the change of the name to Energy Exploration Technologies Inc. were voted upon. Such action was approved and voted on as follows:

As a result of the continuance of NXT into the Province of Alberta, as of November 6, 2003, NXT’s ticker symbol on the Over-the-Counter/Bulletin Board was changed to from “ENXT” to “ENXTF”.

ITEM 5 -    OTHER INFORMATION

Not Applicable.

ITEM 6 -    EXHIBITS AND REPORTS ON FORM 8-K

a)  Exhibits

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b)  Reports on Form 8-K

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SIGNATURE

Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this quarterly report on form 10-Q to be signed on its behalf by the undersigned, thereunto duly authorized.

Dated at Calgary, Alberta, this 13 day of November 2003.