Canadian Superior Advances New Offer for Canada Southern

Calgary-based Canadian Superior Energy Inc. announced late Wednesday that its offer by its wholly-owned subsidiary for the common shares of Canada Southern Petroleum Ltd. has been extended to 3 p.m. (Mountain Daylight Time) on September 6, 2006, unless further extended or withdrawn, and will be amended.

Canadian Superior said that it will amend its consideration under its previous offer for the shares of Canada Southern and will be extending its bid for the shares of Canada Southern. Under Canadian Superiorís revised offer, Canadian Superior will be making a bid for Canada Southern that is estimated to be worth approximately CDN$17.10 per Canada Southern share. The revised offer will be comprised of 2.0 Canadian Superior shares, CDN$2.50 cash, and a 25% net profit interest in Canada Southernís approximate 927 bcfe of natural gas being the estimated net amount of natural gas Canada Southern attributes to its interest in the Canadian Arctic Islands.

Canadian Superior estimates the value of the net profit interest to be approximately CDN$10 per Canada Southern share based on a value of approximately CDN$0.65 per MCF of natural gas in place compared to the Western Canada sedimentary basin where natural gas is being sold for more than CDN$2 per MCF of natural gas in place.

Accordingly, Canadian Superior estimates that the value of this alternate bid, which includes the 25% net profit interest and 2.0 Canadian Superior common shares and CDN$2.50 cash, equates to approximately CDN$17.10 per Canada Southern share (US$14.97).

Pursuant to Canadian Superiorís amended offering, Canada Southern shareholders will alternatively have the right to elect to receive the above-mentioned offer estimated to be worth CDN$17.10 per Canada Southern share (US$14.97), if Canadian Superior is successful in acquiring at least 66 2/3% of the shares of Canada Southern, being 2.0 shares of Canadian Superior, CDN$2.50 cash and a proportionate share of a 25% net profit interest in approximately 927 bcfe of natural gas, being the estimated net amount of natural gas Canada Southern attributes to its interest in the Canadian Arctic Islands, or alternatively Canada Southern shareholders will have the right to receive CDN$2.50 cash and 2.75 common shares of Canadian Superior for each Canada Southern share, being the consideration offered under Canadian Superiorís original offer for Canada Southern.

To date 116,922 shares have been tendered to the original offer, although no shares have been taken up under the original offer pending satisfaction of conditions. All shareholders will be entitled to elect to receive either form of consideration.

Canadian Superior expects to mail a Notice of Variation and Extension for the amended offer to Canada Southern shareholders as soon as reasonably practicable.

Canadian Superior has operations in Western Canada, offshore Trinidad and Tobago, and offshore Nova Scotia.


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