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Unless the context otherwise requires, the words and phrases used in this annual report identified below shall have the following meanings.

"Acquisition costs" means the costs incurred to obtain rights to production of oil and gas. These costs include the costs of acquiring oil and gas leases and other interests. These costs include lease costs, finder's fees, brokerage fees, title costs, legal costs, recording costs, options to purchase or lease interests and any other costs associated with the acquisitions of an interest in current or possible production.

"Bbl" means one barrel, consisting of 42 U.S. gallons liquid volume, of crude oil inclusive of natural gas liquids.

"Boe" means barrels of oil equivalent.

"Bbls/d" means barrels of oil per day.

"Boe/d" means barrels of oil equivalent per day.

"BLM" means the United States federal Bureau of Land Management.

"Calpine Canada" means Calpine Canada Resources Limited.

"CamWest" means CamWest Exploration LLC.

"Common shareholders" means persons who hold our common stock.

"Common shares" means shares of our common stock, par value $0.001.

"Development costs" means costs incurred to drill, equip, or obtain access to proved reserves, including costs of drilling and equipment necessary to get products to the point of sale and may entail on-site processing.

"Exploration costs" means costs incurred, either before or after the acquisition of a property, to identify areas that may have potential reserves, to examine specific areas considered to have potential reserves, to drill test wells, and drill exploratory wells. Exploratory wells are wells drilled in unproven areas. The identification of properties and examination of specific areas will typically include geological and geophysical costs, also referred to as "G& G", which include topological studies, geographical and geophysical studies, and costs to obtain access to properties under study. Depreciation of support equipment, and the costs of carrying unproved acreage, delay rentals, ad valorem property taxes, title defense costs, and lease or land record maintenance are also classified as exploratory costs.

"Future net revenue, before income taxes" means an estimate of future net revenue from a property, based on the proven reserves of oil and natural gas believed to be recoverable at a specified date, after deducting production and ad valorem taxes, future capital costs and operating expenses, before deducting income taxes. Future net revenue, before income taxes, should not be construed as being the fair market value of the property.

"Gross" oil and natural gas wells or "gross" acres is the total number of wells or acres in which NXT has an interest.

"Mbbls" means one thousand bbls and "Mmbbls" means one million bbls.

"Mboe" means one thousand boe and "Mmboe" means one million boe.

"Mcf" means one thousand cubic feet of natural gas, while "Mmcf" means one million cubic feet of natural gas.

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"Mcf/d" means one thousand cubic feet of natural gas per day, and "Mmcf/d" means one million cubic feet of natural gas per day.

"Mcfe" means one thousand cubic feet of natural gas and natural gas equivalent, determined using the ratio of six thousand cubic feet of natural gas to one barrel of oil, condensate or natural gas liquids, while Mmcfe means one million cubic feet of natural gas and natural gas equivalent,

"Mcfe/d" means one thousand cubic feet of natural gas and natural gas equivalent, determined using the ratio of six thousand cubic feet of natural gas to one barrel of oil, condensate or natural gas liquids, per day, and "Mmcfe/d" means one million cubic feet of natural gas per day.

"Momentum Resources" means Momentum Resources Corporation.

"Net" oil and natural gas wells or "net" acres are det4erimined by multiplying "gross" wells or acres by NXT's working interest in those wells or acres.

"NXT", "we" or our "company" means Energy Exploration Technologies, a Nevada corporation, and our subsidiaries except where otherwise indicated.

"NXT Aero Canada" means NXT Aero Canada Inc., a federal Canadian Corporation.

"NXT Aero USA" means NXT Aero USA Inc., a Nevada corporation.

"NXT Energy USA" means NXT Energy USA Inc., a Nevada corporation.

"NXT Energy Canada" means NXT Energy Canada Inc., a federal Canadian corporation.

"Oil and gas lease" means an agreement between a mineral owner, the lessor, and a lessee which conveys the right to the lessee to explore for and produce oil and gas from the leased lands. Oil and gas leases usually have a primary term during which the lessee must establish production of oil and or gas. If production is established within the primary term, the term of the lease generally continues in effect so long as production occurs on the lease. Leases generally provide for a royalty to be paid to the lessor from the gross proceeds from the sale of production.

"OTC Bulletin Board" means the National Association of Securities Dealers' Over-The-Counter Electronic Bulletin Board.

"Prospect" means a location where both geological and economical conditions favor drilling a well.

"Preferred shareholders" means persons who hold our preferred stock.

"Proved reserves" are the estimated quantities of crude oil, natural gas and natural gas liquids which geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions, i.e. prices and costs as of the date the estimate is made. Prices include consideration of changes in existing prices provided only by contractual arrangements, but not on escalations based upon future conditions. Reservoirs are considered proved if economic recovery by production is supported by either actual production or conclusive formation test. The area of a reservoir considered proved includes (A) that portion delineated by drilling and defined by gas-oil and/or oil-water contacts, if any, and (B) the immediately adjoining portions not yet drilled, but which can reasonably be judged as economically productive on the basis of available geological and engineering data. In the absence o f information on fluid contacts the lowest known structural occurrence of hydrocarbons controls the lower proved limit of the reservoir.

"Proved developed reserves" are those proved reserves that can be expected to be recovered through existing wells with existing equipment and operating methods. Additional oil and gas reserves expected to be obtained through the application of fluid injection or other improved secondary or tertiary recovery techniques for supplementing the natural forces and mechanisms of primary recovery are included as "proved developed reserves" only after testing by a pilot project or after the

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operation of an installed recovery program has confirmed through production response that increased recovery will be achieved.

"Proved undeveloped reserves" are those proved reserves that are expected to be recovered from new wells on undrilled acreage, or from existing wells where a relatively major expenditure is required. Reserves on undrilled acreage are limited to those drilling units offsetting productive units that are reasonably certain of production when drilled. Proved reserves for other undrilled units are claimed only where it can be demonstrated with reasonable certainty that there is continuity of production from the existing productive formation. Estimates for proved undeveloped reserves attributable to any acreage do not include production for which an application of fluid injection or other improved recovery technique is required or contemplated, unless such techniques have been proved effective by actual tests in the area and in the same reservoir.

"Royalty interest" is a right to oil, natural gas or other minerals that is not burdened by the costs to develop or operation the property.

"SEC" means the United States federal Securities and Exchange Commission.

"Series 'A' preferred shareholders" means persons who hold our series 'A' preferred stock.

"Series 'A' preferred shares" means shares of our series 'A' convertible preferred stock, par value $0.001.

"SFD" means our stress field detector.

"SFD survey system" means the SFD system we use for aerial surveys comprised of our SFD and integrated electronic data acquisition, processing and interpretation subsystems and software.

"Working interest" is an interest in an oil or natural gas property that is burdened with the costs of development and operation of the property.

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We conduct our transactions in the currency of both the United States and Canada, although we consider the United States dollar to be our functional and reporting currency. All references to "dollars" in this annual report refer to United States or U.S. dollars unless specific reference is made to Canadian or CDN dollars. The rate of exchange of Canadian dollars to United States dollars as of December 31, 2001, was CDN $1.5928 to U.S. $1. For information relative to the conversion of our accounts into US dollars, see that section contained in explanatory note 2 to our consolidated financial statements captioned "Foreign Currency Translation".

We use our SFD technology to survey large exploration areas from our survey aircraft at speeds of approximately 200 mph to identify and high-grade leads for further evaluation and potential drilling. Our SFD technology is a recently developed technology which we adapted for airborne survey operations and field tested for independent geologists and joint venture partners during 1996 and 1997. We commenced SFD survey activities on a commercial basis for our joint venture partners in 1998.

As a reconnaissance exploration company, we use our SFD technology as a wide-area prospect finding tool. Our SFD technology affords us the relatively inexpensive ability to obtain near real-time analysis and interpretation of potential hydrocarbon prospects in a matter of days or weeks, as compared to months and, in some situations, years, as in the case of the seismic methods currently employed in wide-area exploration activities by the oil and natural gas exploration industry. These advantages are intended to reduce finding costs for our company and joint venture partners. Finding costs include the cumulative costs of acquiring seismic, purchasing mineral rights, and drilling and completing exploration wells. The ability to reduce finding costs is an extremely important financial benchmark in the oil and natural gas industry, insofar as low finding costs represent a measure of an oil and natural gas company's ability to effectively and efficiently find new reserves and to g enerate cash flow. Once SFD prospects are identified, conventional geological and geophysical methods are employed to valuate the potential commercial viability of the prospect.

We conduct our SFD reconnaissance exploration activities, as well as land acquisition, seismic, drilling, completion and production activities to exploit prospects identified using our SFD technology, through two wholly-owned operating subsidiaries: NXT Energy USA which focuses on United States-based exploration principally on behalf of our United States-based joint ventures and our own account, and NXT Energy Canada which focuses on Canadian-based exploration on behalf of our Canadian-based joint ventures and for our own account. All reconnaissance exploration activities are conducted by NXT Energy USA and NXT Energy Canada using NXT-owned aircraft operated by our two wholly-owned aviation operation subsidiaries, NXT Aero USA and NXT Aero Canada USA. NXT concentrates on research and development efforts 

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to improve the efficacy of our SFD survey system, and oversees the operations of and provides management, financial and administrative services to our subsidiaries.

At December 31, 2001, we owned interests in approximately 20 gross wells (2.82 wells net to our interest) in the Green River basin in Wyoming, the Williston basin in North Dakota, and southern Alberta, and a total of 95,629 and 18,152 gross and net acres, respectively, of developed and undeveloped exploration lands. None of these wells were producing as of December 31, 2001, principally due to delays in connecting the wells to pipeline. Since that date, however, two wells have been connected to pipeline and are producing, and an additional four wells may be connected to pipeline and producing within a month of this annual report. At December 31, 2001, based upon our reserve report, we had net proved undeveloped oil and gas reserves of 2,845 Mmcfe of natural gas and condensate for eleven different wells with a total net present value discounted at 10% of $2,378,000, consisting of 2,593 Mmcf of natural gas reserves and 42 Mboe of oil and condensate reserves.

In the United States through CamWest, our U.S. joint venture partner, we have participated in drilling exploratory wells to date in four exploration blocks: the Ice Caves prospect located in the Williston basin of North Dakota; and three exploration blocks located in the Green River basin of Wyoming-the Poblano/Juel Spring block, the Gold Coast prospect and the Leucite Hills South prospect. We also hold rights to or interests in up to six other prospective exploration blocks in the Green River basin through our joint venture with CamWest. The Green River basin is currently the most active natural gas exploration play in the United States, and NXT holds, through CamWest, working interests in approximately 65,280 gross acres in that basin, plus the right to acquire working interests in an additional 23,360 gross acres based upon developments.

• At the Ice Caves prospect in the Williston basin, we participated in drilling two exploratory wells in the last six months of 2001 targeting the Red River formation, the first of which was non-commercial and abandoned, and the second of which, the Beta Race 22-6, proved a commercial natural gas discovery in January 2002. This prospect was initially identified by NXT in 1998 using our SFD technology, and subsequently developed by CamWest based upon a 3D seismic program it conducted in late 2000. Initial flow rates for the Beta Race 22-6 well, under which we hold a 22.5% working interest, yielded natural gas at 4.1 Mmcf/d and condensate of approximately 100 Bbls/d at the maximum capacity of the surface test equipment. CamWest is in the process of connecting this well to pipeline, and we anticipate production will commence by the end of April 2002. Due to the limited diameter and operating pressures of the local gas gathering system, we anticipate that production will be constrained at approximately 3 Mmcfe/d.

• From October 1999 to May 2000, we participated in drilling four deep natural gas exploratory wells at the Poblano/Juel Spring block in the Green River basin, and in March 2002 the first of these wells, the Poblano 1-28, under which we hold a 22.5% working interest, was being completed and tied into pipeline. Poblano and Juel Spring are two contiguous ten square mile prospects which we initially targeted based on our identification through SFD surveys of what we believed to be stratigraphically-trapped over-pressured gas accumulations. All drilling decisions by CamWest were made without the benefit of seismic. The Poblano 1-28 well is currently testing segregated zones in the Mesa Verde. All four wells were shut-in for over 18 months pending the completion of a 144 square mile 3D seismic program completed by CamWest in early 2001 for the purpose of evaluating development decisions, and the decision to complete the three wells (other than the Poblano 1-28) and connect them to pipeline will be made following an evaluation of sustained production from the Poblano 1-28 and other factors, including natural gas prices and developments relating to our pending Antelope Tail prospect described below.

• We participated in drilling two deep natural gas exploratory wells to date at the 44,800 acre Gold Coast prospect in the Green River basin in summer of 2000, the first of which sustained a 25-foot gas flare at surface during drilling operations but was junked and abandoned after the later collapse of the intermediate casing, and the second of which was non-commercial and suspended. NXT continues to believe that this prospect holds great promise, and consideration of a 3D seismic program is currently underway.

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• We also participated in an exploratory well which was spudded in fall 1999 at the Leucite Hills South prospect in the Green River basin that was cased as a natural gas well. Development decisions on this prospect are pending based upon environmental consideration.

We are currently preparing through CamWest to drill a natural gas exploratory well on a fourth exploration block in the Green River basin, the 3,360 acre Antelope Tail prospect. This well, Habanero Federal 14-21, is scheduled to be spudded by CamWest in June 2002. The Antelope Tail feature is a complex anticlinal culmination that involves the entire Lance and Mesa Verde formations. The feature has been imaged with proprietary 3D seismic that was acquired and processed in early 2001. Detailed seismic analysis indicates that the Lance and Mesa Verde reservoir rocks are extensively fractured and hence has potentially excellent permeability and therefore, deliverability. In anticipation of obtaining commercial production from the proposed Habanero Federal 14-21 well, Mountain Gas Resources has obtained BLM permission and has surveyed a pipeline right of way to the wellsite. We anticipate that the Habanero Federal 14-21 well will be completed by the end of August 2002.

In Canada through Calpine Canada, our Canadian joint venture partner, we have participated in drilling eleven exploratory wells to date in southwestern Alberta on five separate prospect areas-Beiseker, the Dalroy/Irricana block, Monarch, Carbon and Parflesh. Monarch is located near Lethbridge, while Beiseker, the Dalroy/Irricana block, Carbon and Parflesh are all located in the same general area east of Calgary, Alberta, on lands held by a common mineral owner. We have also acquired drilling rights in several other prospective areas in Canada upon which we have acquired 2D seismic data. At this time NXT's Canadian production is obtained from two wells drilled at the Beiseker block, in which we hold a 5.625% working interest. These wells were tested at a combined 7.1 Mcf/d in February 2000 and have been recently connected to pipeline.

We were initially incorporated in Nevada on September 27, 1994 under the name "Auric Mining Corporation". In January 1996, we acquired all of the common stock of NXT Energy USA (then known as Pinnacle Oil Inc.) from its stockholders in exchange for our common stock. As a consequence of this reverse acquisition, NXT Energy USA became our wholly-owned subsidiary and its stockholders acquired a 92% controlling interest in our common stock. Prior to this transaction, we were a corporate shell conducting no active business, and NXT Energy USA was a development stage research and development enterprise holding world-wide rights to use what is now our SFD technology for hydrocarbon exploration purposes. Immediately after this transaction, we changed our name to "Pinnacle Oil International, Inc", and subsequent to that, on June 13, 2000, changed our name to "Energy Exploration Technologies".

Our corporate objective is to become an industry leader in technology-driven oil and natural gas exploration. We believe our SFD technology has the potential to provide significant competitive advantages to our joint venture partners.

Our primary objective at this stage of our development is to:

• become profitable and self-sustaining through the development of our current inventory of exploration properties; and

• to continue to statistically demonstrate and prove-out the efficacy of our SFD technology through the drill-bit on an appropriate number of representative prospects.

We believe that only by proving our SFD technology to oil and natural gas industry explorationists will we be able to achieve the industry market acceptance, and resultant access to the additional capital to fund the exploration, land acquisition and drilling efforts that will be necessary to fully exploit the commercial potential of our SFD technology.

CamWest is in the process of connecting this well to pipeline, and we anticipate production will commence by the end of April 2002. Due to the limited diameter and operating pressures of the local gas gathering system, we anticipate that production will be constrained at approximately 3 Mmcfe/d. We are currently reviewing 3-D mapping utilizing new downhole data to determine whether follow-up wells can be drilled on the Ice Caves feature.

In the United States through CamWest, our U.S. joint venture partner, we have participated in drilling exploratory wells in three exploration blocks in the Green River basin to date, the Poblano/Juel Spring block, the Gold Coast prospect and the Leucite Hills South prospect, and intend to drill an exploratory well in a fourth exploration block, Antelope Tail, in June 2002. We also hold rights to or interests in several other exploration blocks in the Green River basin through our joint venture with CamWest. The Green River basin is currently the most active natural gas exploration area in the United States and NXT holds, through CamWest, working interests in approximately 65,280 gross acres in that basin, plus the right to acquire working interests in an additional 23,360 gross acres. We have invested approximately $4,120,538 to date in acquiring drilling rights and seismic, and participating in exploratory drilling activities, in this basin, including $975,000 we have set aside for the proposed Antelope Tail well.

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Since the drilling of the first test well, the operator has attempted to obtain a permit to drill a vertical test well on our recommended SFD prospect. However, the BLM has declined to grant the permit due to rugged surface geography. The operator continues to negotiate with the BLM with respect to this matter. If the BLM does not ultimately approve a vertical well, the operator would most likely have to drill a more expensive directional well to access the area.

We also hold prospective rights to acquire working interests in a number of other tendered prospect in the Green River basin in which CamWest has acquired land positions, including Alkali Creek South and Stage Coach Draw North.

Set forth below is a map showing the location of our Poblano (including Juel Spring directly to the south), Antelope Tail, Gold Coast and Leucite Hills prospects in the Green River basin:

[MAP]

We also hold working interest land positions in the following prospects in southern Alberta, pursuant to which we would like to pursue further development activities at some point in the future:

[MAP]

In the United States, we anticipate that our future activities with CamWest under that joint venture will, due to the large number of actual or prospective prospects involved under our joint venture agreement and the matter of the large capital expenditures required to develop these prospects, be focused on the development of these prospects or disposition of those interests as opposed to conducting exploratory activities in entirely new areas. In potential order of priority, we would expect the joint venture to focus on:

• drilling two exploratory wells on the Antelope Tail prospect and, if warranted by drilling results, conducting follow-up development drilling activities on this prospect;

• drilling additional development wells on the Poblano/Juel Spring block to the extent warranted by production results and natural gas prices, and

• conducting 3-D seismic programs and follow-up exploratory drilling and development activities on our Gold Coast and Alkali Creek South prospects.

It should be noted that each of the projects described above will potentially require substantial capital outlays in the tens of millions of dollars by the joint venture, and that a significant portion of our management's time will be devoted to ensuring our 

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continued ability to participate in these projects, including funding our working interest obligations. By way of example, if the initial Antelope Tail test wells are commercial, CamWest and NXT could potentially drill up to fourteen additional wells on this prospect based upon spacing consideration. The anticipated overall cost to drill and complete the first nine wells alone, (which would be the initial project), would be approximately $37.8 million, while NXT's anticipated net cost to participate is approximately $6.38 million. Exploration and development projects at Poblano/Juel Spring, Gold Coast and Alkali Creek South would be of equal or greater size.

Our exploration efforts in Canada have also been recently reduced as the result of a corporate reorganization that Calpine Canada initiated in late 2001 under the auspices of its U.S. parent corporation. Specifically, during 2001 we had conducted a number of promising investigatory SFD surveys in the Ladyfern and South Adset areas of northeastern British Columbia with Calpine Canada, and had reached tentative agreement with Calpine Canada's senior exploration management team to engage in a broad-based exploration program in these areas in fiscal 2002. In view of this plan we entered into an agreement with a Canadian investment banker in late 2001 to procure project financing on a flow-through share basis. Unfortunately, Calpine Canada's U.S. parent corporation initiated a corporate reorganization and re-evaluation of Calpine Canada's business plan immediately prior to final approval of the transaction. During that process Calpine Canada's senior exploration management team wi th whom we worked left the company, and we believe it is likely that Calpine Canada will no longer engage in exploration activities with NXT other than the development or disposition of existing prospects.

Based upon the above developments with both CamWest and Calpine Canada as well as our current financial condition and obligations, our exploratory efforts will be significantly reduced in the short-term while we focus on completing and financing continued drilling and development activities in the Green River basin. While we plan to conduct further SFD survey and exploration activities in both the United States and Canada, and have entered into discussions with several prospective partners regarding prospective activities, we are currently limited by fiscal constraints from immediately proceeding with these activities and intend to defer these decisions until the end of fiscal 2002 pending increased revenues from the Antelope Tail project or other sources of revenue or capital. Ultimately our ability to finance continued exploration as well as to develop current projects will be subject to our ability to raise sufficient capital to cover our project expenses and ongoing operati ng costs through a combination of financing, joint venture participation and revenues. For further information regarding these capital constraints see that section of this annual report captioned "Management's Discussion And Analysis Of Financial Condition And Results Of Operations-Capital Requirements Going Forward".

The results of our drilling efforts to date have been mixed. These limited results appear to validate the effectiveness of our SFD technology insofar as most of the wells drilled have encountered hydrocarbon bearing formations, although the utility of these results in empirically validating the SFD are complicated by a number of factors. The following factors have impacted our drilling results:

• a number of drilled and cased wells have not yet been tied into gas pipelines;

• a number of drilled wells were not completed, due to cost and distance factors;

• a number of prospects in this locale have not been developed due to environmental considerations;

• a number of our drilling efforts have encountered zones in shallower horizons which NXT was excluded from participation