Petro-Canada to make offer for Canada Southern

By OGJ editors
HOUSTON, May 12 -- Petro-Canada said it plans to offer $113 million or $7.50/share for Canada Southern Petroleum Ltd., Calgary independent producer.

Petro-Canada said May 11 that it expected to make the offer within a few days, adding that it had been in discussions with Canada Southern for more than a month without reaching an agreement.

Canada Southern said it believes the proposed offer significantly undervalues its Arctic natural gas resources and urged its shareholders to take no action until the board makes a recommendation. It retained a financial advisor to explore alternatives to maximize shareholder value.

Canada Southern has producing conventional assets at Kotaneelee field in the Yukon Territory, Northeast BC, and southern Alberta. It also has land holdings and interests in the Hecla, Drake Point, Bent Horn, Whitefish, and Kristoffer significant discovery license areas in the Canadian Arctic Islands.

Nosara Holdings Ltd., a wholly-owned subsidiary of Petro-Canada, will make the offer, which will be conditional on acquiring at least 66 2/3% of all common shares of Canada Southern outstanding on a fully diluted basis.