In a statement, Chairman of the Board, Richard McGinity, said, "There is nothing in Petro-Canada's press release that changes our view that Petro-Canada's offer is financially inadequate and fails to recognize the economic and strategic value of Canada Southern's Arctic assets. The Board remains firm in its recommendation that shareholders should reject the Petro-Canada offer."
"We stand by the 927 bcfe estimate we have provided for Canada Southern's Arctic Islands gas resources. In between receiving ultimatums from Petro-Canada we repeatedly sought to understand their methodology for quantifying and valuing our assets. They refused to provide either their own estimate of the potential resource or to discuss the valuation methodology on which they were basing their offer."
"Petro-Canada also continues to talk about the premium they are offering to Canada Southern shareholders, yet as of today's market close Petro-Canada's offer sits at an 18% discount to Canada Southern's stock price. Moreover, the Petro-Canada offer was opportunistically timed to coincide with a short-term drop in the Canadian junior oil and gas sector generally, and Canada Southern's share price, specifically."
"Finally, we think it is premature for Petro-Canada to be pursuing legal action to strike down a shareholder rights plan that is designed solely to provide the Board sufficient time to surface appropriate value for Canada Southern shareholders," said Mr. McGinity. "This is entirely consistent with the coercive nature of Petro-Canada's conduct throughout this process. We are in active discussions with a number of interested parties about potential value-maximizing transactions. We will continue to pursue these discussions in the best interests of our shareholders."
Canada Southern takes issue with some of the specific statements Petro-Canada makes in the press release it issued today, and urges shareholders to read the Directors' Circular, and particularly the Background to the Offer section, for further information about Petro-Canada's offer.
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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