Canada Southern Petroleum to Participate in Kotaneelee Well

Canada Southern Petroleum will participate in the proposed drilling of a development well in the Kotaneelee producing gas field and undeveloped acreage at Kotaneelee in the Yukon Territory to the extent of its 30.67% working interest.

The operator of the field has proposed to drill a development well in the third quarter of this year and has estimated that the gross costs to drill, complete and equip the proposed well will be approximately $20 million (Cdn.) and that the well's drilling and completion will take approximately 6 months. Canada Southern has been advised that if the proposed well is successful, production would not likely start until the end of the first quarter of next year.

No assurances can be given that the operator of the field will proceed with the proposed development well as originally proposed. Investors are also cautioned that there can be no assurances that the development well will, if and when drilled, access additional reserves of gas in commercially recoverable quantities. For a discussion of the various risk factors related to future development of the Kotaneelee field, please see the disclosures under the heading "Future Development of Kotaneelee" in Item 1 of the Company's Form 10-K for the fiscal year ended December 31, 2003.

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