Canada Southern Advises Shareholders Not to Accept PetroCanada's Offer

Canada Southern Petroleum Ltd. (NasdaqSC: CSPLF; TSX: CSW.TO)is responding to Petro-Canada's announcement that it intends to make an unsolicited offer to purchase all of the outstanding shares of the Company.

The Company has retained CIBC World Markets Inc. as its financial advisor in connection with the proposal and to explore alternatives to maximize shareholder value.

Richard C. McGinity, Chairman of the Board of the Company stated: "The Board of Directors of the Company will carefully consider Petro-Canada's proposed offer and any other offers which the Company may receive and make appropriate recommendations to our shareholders."

"We have been in discussions with Petro-Canada for some time, but unfortunately it was unwilling to pay what we believe is fair value for Canada Southern, including, in particular, our substantial Arctic natural gas resources. Petro-Canada has working interests in most of the Arctic properties in which Canada Southern also has interests. The Company believes that Petro-Canada's proposed offer significantly undervalues our Arctic natural gas resources. Canada Southern's Arctic resources are attractive to any buyer interested in long term North American natural gas supply from a stable political jurisdiction, and particularly those looking for LNG supply."

"While we are disappointed that Petro-Canada felt it necessary to make an unsolicited offer, the management and Board of Canada Southern will fully exercise their fiduciary duties to seek to maximize value for Canada Southern shareholders. While that process is underway, Canada Southern shareholders should await the results of our review and the recommendation of the Canada Southern Board before making any decisions with respect to the Petro-Canada offer."

Canada Southern advises shareholders to not deposit any common shares to the Petro-Canada offer and to not take any other action concerning the offer until shareholders have received further communications from the Board of Directors of Canada Southern. After the commencement of the offer, Canada Southern will issue a Directors' Circular that will contain important information for shareholders, including the Board recommendation regarding the offer.

In connection with the offer, Canada Southern also will be filing certain materials with the United States Securities and Exchange Commission (SEC), including a Solicitation/Recommendation Statement on Schedule 14D-9. Shareholders are urged to read the Solicitation/Recommendation Statement on Schedule 14D-9 and any amendments thereto when they become available because they will contain important information. Investors can obtain a free copy of the Solicitation/Recommendation Statement on Schedule 14D-9 and any amendments thereto when they become available and all other filings made by Canada Southern with the SEC at the SEC's website at In addition, these materials may be obtained free from Canada Southern by directing a request to Canada Southern, #250, 706 - 7th Avenue S.W, Calgary, Alberta, Canada T2P 0Z1, (403) 269-7741, Attention: Corporate Secretary.

Canada Southern Petroleum Ltd. is an independent energy company based in Calgary, Alberta, Canada. The Company is engaged in oil and gas exploration and development, with its primary interests in producing properties in the Yukon Territory and British Columbia, Canada. The Company also owns interests in various Significant Discovery Licenses located in the Arctic Islands in Northern Canada. The Company's common shares are traded on the NASDAQ Capital Market under the symbol "CSPLF," and on the Toronto Stock Exchange under the symbol "CSW". The Company has 14,496,165 shares outstanding.


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