Petro-Canada extends offer for Canada Southern Petroleum

Petro-Canada extended its offer by its wholly owned subsidiary Nosara Holdings Ltd. to acquire all shares of Canada Southern Petroleum Ltd.

June 21, 2006

By OGJ editors
HOUSTON, June 21 -- Petro-Canada extended its offer by its wholly owned subsidiary Nosara Holdings Ltd. to acquire all shares of Canada Southern Petroleum Ltd.

The offer price remained unchanged at $7.50/share, $113 million total, despite a higher offer from Canadian Oil Sands Ltd. (COS), a unit of Canadian Oil Sands Trust. All the companies involved are based in Calgary.

Petro-Canada extended its offer until 7:00 p.m. (MDT) on July 5 even though Canada Southern Petroleum's board already rejected the offer as being too low.

In the competing bid, COS offered $9.75/share (Can.), a total of $165 million, for all outstanding common shares of Canada Southern Petroleum (OGJ Online, June 20, 2006).

COS described the purchase as a long-term hedge against natural gas price increases that could hurt Syncrude oil sands production at Fort McMurray, Alta.

COS manages Canadian Oil Sands Trust, which holds an indirect 35.49% working interest in the Syncrude joint venture.