UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                    FORM 10-Q

[X]      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

For the quarterly period ended                  March 31, 2002
                               -------------------------------------------------

[   ]    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

For the transition period from ________________ to ____________________

Commission file number     1-3793
                       --------------

                         CANADA SOUTHERN PETROLEUM LTD.
.................................................................................
             (Exact name of registrant as specified in its charter)

     NOVA SCOTIA, CANADA                                     98-0085412
.................................................................................
   (State or other jurisdiction of                        (I.R.S. Employer
    incorporation or organization)                       Identification No.)

#505, 706 - 7th  Avenue, S.W., Calgary, Alberta, Canada       T2P 0Z1
.................................................................................
(Address of principal executive offices)                     (Zip Code)

                                 (403) 269-7741
.................................................................................
              (Registrant's telephone number, including area code)


.................................................................................
              (Former name, former address and former fiscal year,
                         if changed since last report)

         Indicate by check mark whether the registrant (l) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.                        |X| Yes |_| No

         Indicate the number of shares outstanding of the issuer's classes of
common stock as of the latest practicable date:

         Limited Voting Shares, par value $1.00 (Canadian) per share 14,417,770
shares outstanding as of May 10, 2002.


<PAGE>


                         CANADA SOUTHERN PETROLEUM LTD.

                                    FORM 10-Q

                                 MARCH 31, 2002

                                Table of Contents


                         PART I - FINANCIAL INFORMATION


ITEM 1  Financial Statements                                               Page
                                                                           ----
        Consolidated balance sheets at March 31, 2002
        and December 31, 2001                                                3

        Consolidated  statements  of income and deficit
        for the three  months  ended March 31, 2002 and 2001                 4

        Consolidated  statements  of cash flows for the three
        months ended March 31, 2002 and 2001                                 5

        Notes to consolidated financial statements                           6

        Supplementary Oil and Gas Data                                      10

ITEM 2  Management's  Discussion and Analysis of Financial
        Condition and Results of Operations                                 11

ITEM 3  Quantitative and Qualitative Disclosure About Market Risk           16

                           PART II - OTHER INFORMATION

ITEM 5  Other Information                                                   17

ITEM 6  Exhibits and Reports on Form 8-K                                    17

        Signatures                                                          18



<PAGE>


4

                         CANADA SOUTHERN PETROLEUM LTD.
                                    FORM 10-Q
                         PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

                           CONSOLIDATED BALANCE SHEETS
                         (Expressed in Canadian dollars)
<TABLE>
<CAPTION>

                                                                               March 31,            December 31,
                                                                                 2002                   2001
                                                                              -----------              ------
       Assets                                                                 (unaudited)              (Note)
       ------                                                                 -----------              ------
 Current assets
<S>                                                                            <C>                    <C>
   Cash and cash equivalents                                                   $ 15,299,045           $ 13,104,666
   Accounts receivable                                                            2,345,810              3,008,632
   Other assets                                                                     354,401                322,747
                                                                                 ----------             ----------
 Total current assets                                                            17,999,256             16,436,045
                                                                                 ----------             ----------

 Oil and gas properties and equipment
   (full cost method)                                                             7,604,803              8,151,670

 Future tax asset                                                                    18,000                500,000
                                                                                -----------            -----------
 Total assets                                                                   $25,622,059            $25,087,715
                                                                                ===========            ===========

           Liabilities and Shareholders' Equity

 Current liabilities
   Accounts payable                                                            $    675,146           $    696,576
   Accrued liabilities                                                              949,686                881,948
                                                                                  ---------              ---------
 Total current liabilities                                                        1,624,832              1,578,524
                                                                                  ---------              ---------

 Future site restoration costs                                                      344,467                263,340

 Contingencies (Note 2)                                                                   -                      -

 Shareholders' Equity (Note 3)
   Limited Voting Shares, par value
     $1 per share
   Authorized -100,000,000 shares
   Outstanding -14,417,770 shares                                                14,417,770             14,417,770
   Contributed surplus                                                           27,271,833             27,271,833
                                                                                 ----------             ----------
 Total capital                                                                   41,689,603             41,689,603
 Deficit                                                                        (18,036,843)           (18,443,752)
                                                                                ------------           ------------
 Total shareholders' equity                                                      23,652,760             23,245,851
                                                                                -----------            -----------
 Total liabilities and shareholders' equity                                     $25,622,059            $25,087,715
                                                                                ===========            ===========
</TABLE>

       Note: The balance sheet at December 31, 2001 has been derived from
           the audited consolidated financial statements at that date.

                             See accompanying notes.

<PAGE>



                         CANADA SOUTHERN PETROLEUM LTD.
                                    FORM 10-Q

                         PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

                CONSOLIDATED STATEMENTS OF OPERATIONS AND DEFICIT
                         (Expressed in Canadian dollars)
                                   (unaudited)

<TABLE>
<CAPTION>

                                                                                         Three months ended
                                                                                              March 31,
                                                                                    2002                       2001
                                                                                ------------                 ---------
Revenues:
<S>                                                                               <C>                         <C>
  Proceeds from carried interests                                                 $1,907,830                  $ 344,556
  Gas sales                                                                          378,585                  1,073,319
  Oil and liquids sales                                                               36,794                     13,785
  Interest and other income                                                           69,695                     21,418
                                                                                ------------                  ---------
    Total revenues                                                                 2,392,904                  1,453,078
                                                                                ------------                  ---------

Costs and expenses:
  General and administrative                                                         333,550                    365,056
  Legal                                                                              315,869                    308,047
  Lease operating costs                                                              133,757                     92,070
  Depletion, depreciation and amortization                                           632,000                     68,102
  Site restoration costs                                                              81,000                      2,000
  Foreign exchange gains                                                              (4,181)                   (25,936)
                                                                                   ----------                   --------
    Total costs and expenses                                                       1,491,995                    809,339
                                                                                   ---------                    -------
  Income before income taxes                                                         900,909                    643,739
  Income tax expense (Note 5)                                                        494,000                     57,700
                                                                                   ---------                    -------
Net income                                                                           406,909                    586,039
  Deficit - beginning of year                                                    (18,443,752)               (28,626,253)
                                                                                 ------------               ------------
  Deficit - end of period                                                       $(18,036,843)              $(28,040,214)
                                                                                =============              =============

Net income per share:
  Basic                                                                               $.03                     $.04
                                                                                      ====                     ====
  Diluted                                                                             $.03                     $.04
                                                                                      ====                     ====

Average number of shares outstanding:
  Basic                                                                           14,417,770                 14,309,220
                                                                                  ==========                 ==========
  Diluted                                                                         14,417,770                 14,417,638
                                                                                  ==========                 ==========


                             See accompanying notes.
</TABLE>


<PAGE>


                         CANADA SOUTHERN PETROLEUM LTD.
                                    FORM 10-Q

                         PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                         (Expressed in Canadian dollars)
                                   (unaudited)
<TABLE>
<CAPTION>

                                                                                    Three months ended
                                                                                        March 31,
                                                                                        ---------
                                                                               2002                   2001
                                                                               ----                   ----
Cash flows from operating activities:
<S>                                                                             <C>                    <C>
   Net income                                                                   $406,909               $586,039
    Adjustments to reconcile net income
       to net cash provided by
      operating activities:
    Depletion, depreciation and amortization                                     632,000                 68,120
    Site restoration costs                                                        81,000                  2,000
    Future tax expense                                                           482,000                 57,700
                                                                               ---------                -------
    Funds provided by operations                                               1,601,909                713,841
  Change in current assets and liabilities:
    Accounts receivable                                                          662,822               (478,411)
    Other assets                                                                 (31,654)                13,961
    Accounts payable                                                             (21,430)               252,713
    Accrued liabilities                                                           67,738                113,410
                                                                               ---------               --------
Net cash provided by operations                                                2,279,385                615,514
                                                                               ---------               --------

Cash flows from investing activities:
  Additions to oil and gas properties and
equipment                                                                        (85,133)               (35,249)
  Site restoration expenditures                                                      127                 (7,917)
  Proceeds from the sale of properties                                                 -                801,227
                                                                               ---------                -------
Net cash provided by (used in) investing activities                              (85,006)               758,061
                                                                               ----------               -------

Cash flows from financing activities:
  Exercise of stock options                                                            -                217,000
                                                                               ---------                -------
Net cash from financing activities                                                     -                217,000
                                                                               ---------                -------

Increase in cash and cash equivalents                                          2,194,379              1,590,575
Cash and cash equivalents at the beginning of period                          13,104,666              1,160,031
                                                                              ----------              ---------
Cash and cash equivalents at the end of period                               $15,299,045             $2,750,606
                                                                             -----------             ----------

                             See accompanying notes.
</TABLE>


<PAGE>


                         CANADA SOUTHERN PETROLEUM LTD.
                                    FORM 10-Q
                          PART 1 FINANCIAL INFORMATION

                                 March 31, 2002
                         (Expressed in Canadian Dollars)
                                   (unaudited)

Item 1.  Financial Statements - Notes

Note 1.  Basis of Presentation

         The accompanying unaudited condensed consolidated financial statements
include the accounts of Canada Southern Petroleum Ltd. and its wholly-owned
subsidiaries, Canpet Inc. and C.S. Petroleum Limited. have been prepared in
accordance with Canadian generally accepted accounting principles. The effect of
differences between these principles and accounting principles generally
accepted in the United States (U.S. GAAP) is discussed in Note 7. These
financial statements conform in all material respects with the instructions to
Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all
of the information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of management, all
adjustments considered necessary for a fair presentation have been included. All
such adjustments are of a normal recurring nature. Operating results for the
three month period ended March 31, 2002 are not necessarily indicative of the
results that may be expected for the year ending December 31, 2002. For further
information, refer to the consolidated financial statements and footnotes
thereto included in the Company's Annual Report on Form 10-K for the year ended
December 31, 2001.

Note 2.  Revenue Recognition

         Canada Southern recognizes revenue on its working and royalty interest
properties from the production of oil and gas in the period the oil and gas
units are sold.

         Revenue under carried interest agreements is recorded in the period
when the net proceeds become receivable, measurable and collection is reasonably
assured. Under the carried interest agreements Canada Southern receives oil and
gas revenues net of operating and capital costs incurred by the working interest
participants. The time the net revenues become receivable and collection is
reasonably assured depends on the terms and conditions of the relevant
agreements and the practices followed by the operator. As a result, net revenues
may lag the production month by one or more months.

         On September 14, 2001, the trial court in Calgary issued its written
reasons for its decision in the Kotaneelee litigation and on November 1, 2001
the Court finalized its judgment. The judgment affirms that, although the
defendants have a continuing contractual obligation (but not a fiduciary
obligation) to develop the Kotaneelee gas field


<PAGE>



Item 1.  Financial Statements - Notes (Cont'd)

and market the field's gas at the earliest feasible date, they did not breach
their contractual obligation to market the gas. The Court also ordered that the
field's carried interest account be reduced by $5,297,000 and declared that gas
produced at the field is not subject to processing fees. Although the Court did
not quantify the amount payable to Canada Southern as a result of the processing
fee declaration and the adjustment of the carried interest account, Canada
Southern has calculated that amount to be approximately $25 million before any
applicable taxes. The trial court determined that the issue of whether interest
accrued on the carried interest account had been abandoned. The trial court
retained jurisdiction on the issue of taxable costs, but the Court has expressed
a desire to defer its consideration of costs until the Court of Appeal rules on
appeals taken by the parties. Canada Southern has not recorded the above
estimated $25 million amount due because the decision has been appealed and
collection of the amount is not assured.

Note 3.       Limited Voting Shares and Stock Options

         During January 2002, options to purchase 100,000 Limited Voting Shares
at $7.53 per share were granted for a period of five years. During April 2002, a
director of the Company was granted a five year option to purchase 50,000 shares
at $6.81 per share. The options were immediately vested and exercisable.

Summary of Options Outstanding at March 31, 2002
<TABLE>
<CAPTION>
                                                                                                      Option Prices
Years granted                           Expiration Dates            Total         Exercisable              ($)
-------------                           ----------------        ------------      -----------          -------
<C>                                              <C>                    <C>        <C>                     <C>
1999                                        Jan. 2004                   322,700     322,700                7.00
2000                                        Jun. 2002                    75,000      75,000                8.36
2001                                        Nov. 2006                    45,000        -                   6.81
2002                                        Jan. 2007                   100,000     100,000                7.53
                                                                        -------     -------
Total - March 31, 2002                                                  542,700     497,700
                                                                        =======     =======

Options Reserved for Future Grants                                      355,134
----------------------------------                                      =======
</TABLE>

Note 4        Earnings per share

         In 2001, Canada Southern, in accordance with the standards issued by
the Canadian Institute of Chartered Accountants, retroactively adopted the
treasury method of earnings per share (EPS). The new methodology establishes
dilution assuming proceeds from the exercise of dilutive options are used to
purchase shares at the average market price. The previous methodology assumed
proceeds were used to repay debt. There is no change in prior period's EPS, as
the effect of the exercise of stock options would have been anti-dilutive.


Note 5.       Income Taxes

     At March 31, 2002, the Company had unused Canadian tax pools  deductible in
future  periods of  approximately  $7,650,000  and a future tax asset of $18,000
representing the tax effect of the excess of these pools over the carrying value
of the related  properties and equipment.  To the extent that these tax benefits
are utilized in excess of depletion, depreciation and amortization for financial
statement purposes, a future deferred income tax liability will be recorded. The
components  of income tax for the three month  periods  ended March 31, 2002 and
2001 are as follows:
                                            2002             2001
                                          --------          -------
                 Current income tax         12,000                -
                 Future income tax        $482,000          $57,700
                                          --------          -------
                                          $494,000          $57,700
                                          ========          =======

     Future  income taxes for the three months ended March 31, 2001 were reduced
by the utilization of net operating losses of prior years for which the benefits
had not previously been recognized.

Note 6.       Litigation

         On September 14, 2001, the trial court in Calgary issued its written
reasons for its decision in the Kotaneelee litigation and on November 1, 2001
the Court finalized its judgment. The judgment affirms that, although the
defendants have a continuing contractual obligation (but not a fiduciary
obligation) to develop the Kotaneelee gas field and market the field's gas at
the earliest feasible date, they did not breach their contractual obligation to
market the gas. The Court also ordered that the field's carried interest account
be reduced by $5,297,000 and declared that gas produced at the field is not
subject to processing fees. Although the Court did not quantify the amount
payable to Canada Southern as a result of the processing fee declaration and the
adjustment of the carried interest account, Canada Southern has calculated that
amount to be approximately $25 million before any applicable taxes. The trial
court determined that the issue of whether interest accrued on the carried
interest account had been abandoned. The trial court retained jurisdiction on
the issue of taxable costs, but the Court has expressed a desire to defer its
consideration of costs until the Court of Appeal rules on appeals taken by the
parties. Canada Southern has not recorded the above estimated $25 million amount
due because the decision has been appealed and collection of the amount is not
assured.

Note 7.       U. S. GAAP - Other Comprehensive Income
              ---------------------------------------

         Classifications within other comprehensive income include foreign
  currency items, minimum pension liability adjustments and unrealized gains and
  losses on certain investments in debt and equity securities. During 1998, the
  Company wrote down the value of its interest in the Tapia Canyon, California
  heavy oil project to a nominal value. During August 1999, the project was sold
  and the Company received shares of stock in the purchaser. The purchaser has

   Item 1.    Financial Statements - Notes (Cont'd)

  become a public company (Sefton Resources, Inc), which is listed on the London
  Stock Exchange (trading symbol SER). At March 31, 2002, the Company owned
  approximately 4% of Sefton Resources, Inc. with a fair market value of
  $263,000 (December 31, 2001 - $427,000) and a carrying value of $1.00. The
  shares of Sefton Resources, Inc. were restricted and could not be sold before
  December 2001.

         Under U.S. GAAP, the Sefton Resources shares would be classified as
available-for-sale securities and recorded at fair value at March 31, 2002. This
would result in other comprehensive loss of $164,100 for the three month period
ended March 31, 2002 (2001 - gain of $163,000).  In addition,  the balance sheet
would  reflect   Marketable   Securities  in  the  amount  of  $263,000  with  a
corresponding  credit to Shareholders'  Equity - Accumulated other comprehensive
income in the same amount.

  Note 8.U.S. Accounting Developments

         In June 2001, the FASB issued Statement No. 143 "Accounting for Asset
  Retirement Obligations". This statement requires the fair value of a liability
  for an asset retirement obligation be recognized in the period in which it is
  incurred if a reasonable estimate of the fair value of a liability can be
  made. The associated asset retirement costs are capitalized as part of the
  carrying amount of the long-lived asset. The requirements are effective for
  fiscal years beginning on or after June 15, 2002. The effect of this
  pronouncement on the financial position of Canada Southern and the resulting
  Canadian and U.S. GAAP differences, if any, are yet to be determined.

         In August 2001, the FASB issued  Statement No. 144  "Accounting for the
Impairment  or  Disposal  of  Long-Lived  Assets",   which  addresses  financial
accounting and reporting for the impairment of long-lived assets.  Statement No.
144 is effective for the 2002 fiscal year and is not expected to have a material
impact on the Canada Southern's financial position.

Note 9.       Comparative Amounts

         Certain amounts for the 2001 period Consolidated Statements of
Operations and Deficit have been reclassified to conform to the classifications
in the 2002 period.





<PAGE>

<TABLE>
<CAPTION>

Supplementary Oil and Gas Data
                                                        For the three month periods ended March 31,
                                                        --------------------------------------------------

Total Sales Volumes (before royalties)                2002            2001          Change         % Change
--------------------------------------                ----            ----          ------         --------
<S>                                                  <C>             <C>          <C>                <C>
Carried interests (mcf)                              879,410         33,406       846,004            2,532
Carried interests (bbls)                                  43            189          (146)             (77)

Gas (mcf)                                            163,468        125,599        37,869               30
Oil and liquids (bbls)                                 1,957            749         1,208              161

boe's (6 mcf = 1boe)                                 175,813         27,439       148,374              541
boe's per day                                          1,953            305         1,649              541

mcfe's (1 bbl = 6 mcfe)                            1,054,878        164,633       890,246              541
mcfe's per day                                        11,721          1,829         9,892              541

           The corporate sales mix between oil and gas is as follows:

Sales Mix Percent
Gas (mcf)                                                 99             97             2                2
Oil and liquids (bbls)                                     1              3            (2)             (67)
</TABLE>

    The corporate netback analysis for carried interest sales is as follows:
<TABLE>
<CAPTION>

Netback Analysis
----------------
Carried interests (per mcfe)
<S>                                     <C>           <C>           <C>                 <C>
  Sales                                 3.20          15.50         (12.30)             (79)
  Royalties                             (.37)         (4.91)           4.54             (92)
                                        -----         ------        -------
                                        2.83          10.59          (7.76)             (73)
  Lease operating expenses              (.60)          (.73)           .13              (18)
  Carried interest capital              (.06)              -          (.06)                -
                                         ---         -------         ------
Field netback                           2.17           9.86          (7.69)             (78)
                                        ====           ====           =====

    The corporate netback analysis for working interest sales is as follows:

Working interests (per mcfe)
  Sales                                 3.06          12.10          (9.04)           (75)
  Royalties                             (.66)         (3.75)          3.09            (82)
                                        -----         ------          ----
                                        2.40           8.35          (5.95)           (71)
  Lease operating expenses             (1.07)          (.71)          (.36)            51
                                       ------          -----          -----
Field netback                           1.33           7.64          (6.31)           (83)
                                        ====           ====           =====
</TABLE>

                               Definition of Terms
                        ---------------------------------
                         boe = barrels of oil equivalent
                       mcfe = thousand cubic feet equivalent
                             mcf = thousand cubic feet
                               bbl = barrel of oil





Item 2.           Management's Discussion and Analysis of Financial
                  Condition and Results of Operations

         Statements included in Management's Discussion and Analysis of
Financial Condition and Results of Operations which are not historical in nature
are intended to be, and are hereby identified as, "forward looking statements"
for purposes of the "Safe Harbor" Statement under the Private Securities
Litigation Reform Act of 1995. The Company cautions readers that forward looking
statements are subject to certain risks and uncertainties that could cause
actual results to differ materially from those indicated in the forward looking
statements Among these risks and uncertainties are uncertainties as to the
costs, length and outcome of the Kotaneelee litigation, pricing and production
levels from the properties in which Canada Southern has interests, and the
extent of the recoverable reserves at those properties.

Liquidity and Capital Resources

         At March 31, 2002, Canada Southern had approximately $15.3 million of
cash and cash equivalents. These funds are expected to be used for general
corporate purposes, including the continuation of the Kotaneelee field
litigation and for limited exploration and development until the completion of
the litigation.

         Net cash flow provided from operations during 2002 was $2,279,000
compared to the funds provided by operations of $616,000 during 2001.

Increase in income from operations                         $    888,000
Net changes in accounts receivable and other                  1,096,000
Net changes in current liabilities                             (320,000)
                                                            ------------
Increase in net cash provided by operations                 $ 1,664,000
                                                           ==============


         The majority of the carried interest properties in British Columbia
were converted to working interests in 2001. At this time, Canada Southern has
not budgeted any significant capital expenditures for the year 2002.

         Canada Southern's Kotaneelee carried interest account reached
undisputed pay out status on January 19, 2001. Canada Southern received its
first payment of net production proceeds from the Kotaneelee gas field during
May 2001.


<PAGE>


Item 2.           Management's Discussion and Analysis of Financial
                  Condition and Results of Operations (Cont'd)

         On September 14, 2001, the trial court in Calgary issued its written
reasons for its decision in the Kotaneelee litigation and on November 1, 2001
the Court finalized its judgment. The judgment affirms that, although the
defendants have a continuing contractual obligation (but not a fiduciary
obligation) to develop the Kotaneelee gas field and market the field's gas at
the earliest feasible date, they did not breach their contractual obligation to
market the gas. The Court also ordered that the field's carried interest account
be reduced by $5,297,000 and declared that gas produced at the field is not
subject to processing fees. Although the Court did not quantify the amount
payable to Canada Southern as a result of the processing fee declaration and the
adjustment of the carried interest account, Canada Southern has calculated that
amount to be approximately $25 million before any applicable taxes. The trial
court determined that the issue of whether interest accrued on the carried
interest account had been abandoned. The trial court retained jurisdiction on
the issue of taxable costs, but the Court has expressed a desire to defer its
consideration of costs until the Court of Appeal rules on appeals taken by the
parties. Canada Southern has not recorded the above estimated $25 million amount
due because the decision has been appealed and collection of the amount is not
assured.

         The trial was lengthy, complicated and costly to all parties and Canada
Southern expects that the parties who ultimately prevail in the litigation will
argue for a substantial assessment of costs against the non-prevailing party or
parties. The Court has very broad discretion as to whether to award costs and
disbursements and as to the calculation of any amounts to be awarded.
Accordingly, Canada Southern is unable to determine whether, in the event that
Canada Southern does not ultimately prevail on its claims in the litigation,
costs will be assessed against Canada Southern or in what amounts. However,
since the costs incurred by the defendants have been substantial, and since the
Court has broad discretion in the awarding of costs, an award of costs to the
defendants potentially could be material. As of March 31, 2002, Canada Southern
had expended in excess of $14.8 million on the litigation and believes the
defendants have expended substantially more than that amount. A cost award
against Canada Southern could be of sufficient magnitude to necessitate a sale
of Canada Southern's assets or a debt or equity financing to fund such an award.
There are no assurances that any such sale or financing would be consummated.

         Canada Southern has established a provision for its potential share of
future site restoration costs. The estimated amount of these costs, which totals
approximately $1,373,000, is being provided for on a unit of production basis in
accordance with existing legislation and industry practice. At March 31, 2002,
Canada Southern had accrued $344,000 of these costs with $1,029,000 remaining to
be accrued in the future. The estimated costs of abandoning carried interest
wells are not included in future site restoration costs. The Company
expects that these costs would be paid by the working interest partners and
charged to the carried interest account.

Results of Operations

         Three month period ended March 31, 2002 vs. March 31, 2001

         A comparison of the results of 2002 and 2001 is as follows:

<TABLE>
<CAPTION>

                                        2002                   2001                Net Change
                                        ----                   ----                ----------
<S>                                <C>                    <C>                       <C>
Revenues                           $  2,392,904           $  1,453,078              $ 939,826
Costs and expenses                   (1,491,995)              (809,339)              (682,656)
Income tax provision                   (494,000)               (57,700)              (436,300)
                                      ----------            -----------              ---------
Net income                         $    406,909           $    586,039           $   (179,130)
                                      =========              =========             ===========

Net income per share (basic and
diluted)                                 $.03                   $.04                  $(.01)
                                         ====                   ====                  ======

Net cash flow from operations per
share (basic and diluted)                $.16                   $.04                   $.12
                                         ====                   ====                   ----
</TABLE>

         Proceeds from carried interests increased 453% to $1,908,000 during
2002 from $345,000 in 2001 mainly due to the net cash flow associated with the
Kotaneelee field. Canada Southern's carried interest account reached undisputed
pay out status on January 19, 2001. Canada Southern received its first payment
of net production proceeds from the Kotaneelee gas field during May 2001.
Effective for the production period beginning September 2001, the defendants are
no longer deducting a processing fee on the monthly payments of carried interest
revenues. The following is a comparison of the proceeds from carried interests
for the years indicated:
                                        Three months ended March 31,
                                        ----------------------------
                                          2002                  2001
                                       ----------             --------
             Kotaneelee gas field      $1,907,000             $      -
             Other properties               1,000              345,000
                                       ----------             --------
             Total                     $1,908,000             $345,000
                                       ==========             ========

         Sales gas from the Kotaneelee field is approximately 80% of total
monthly production. Because of the uncertainties as to production rates, natural
gas prices and future capital expenditures, Canada Southern is unable to
accurately predict the amount of future net


<PAGE>


Item 2.           Management's Discussion and Analysis of Financial
                  Condition and Results of Operations (Cont'd))

production proceeds that it may receive from the field. In addition, water
production increased during 2001 and 2002 and the producing field may require
the drilling of another water disposal well. If water production were to
continue to increase, future gas production from the field could be adversely
impacted.

         Production from the Kotaneelee field during 2002 compared to 2001 was
as follows:
               2002                                       2001
-------------------------------------      ------------------------------------
       Month             Mmcf/d                Month            Mmcf/d
    -----------          ------             -----------         ------
      January             41.9                January            52.9
      February            40.5                February           54.6
       March              39.0                 March             50.5

         During the period 2001 proceeds from carried interests included
$315,000 of carried interest revenues relating to production periods prior to
January 1, 2001 from the Buick Creek, Wargen and Clarke Lake properties, which
were converted to working interests effective January 1, 2001.

         The volumes in thousand cubic feet (mcf) and the average price of gas
per mcf sold during the periods indicated were as follows:
<TABLE>
<CAPTION>
                                                              Three months ended March 31,
                                                          -----------------------------------
                                            2002                                            2001
                                            ----                                            ----
                                      Average price                                   Average price
                        mcf/bbls       per mcf/bbl           Total       mcf/bbls      per mcf/bbl          Total
                        --------       -----------    ------------------ --------      -----------     ----------
<S>                      <C>             <C>               <C>            <C>             <C>               <C>
Gas sales (mcf)          879,410         $ 3.20            $2,814,000     33,406          $15.76            $526,000
Liquids (bbls)             43            $29.47                 1,000       189           $52.28              10,000
Royalty                                                      (321,000)                                      (166,000)
Operating costs                                              (187,000)                                       (25,000)
Transportation                                               (345,000)                                             -
Capital costs                                                 (54,000)                                             -
                                                          -----------                                      ---------
Total                                                     $ 1,908,000                                      $ 345,000
                                                          ===========                                      =========
</TABLE>

         Gas sales decreased 65% to $379,000 in 2002 from $1,073,000 in the 2001
period. There was a 30% increase in the number of units sold and a 76% decrease
in the average price for gas. The volumes in million cubic feet ("mmcf") and the
average price of gas per thousand cubic feet ("mcf") sold during the periods
indicated were as follows:


<PAGE>


Item 2.           Management's Discussion and Analysis of Financial
                  Condition and Results of Operations (Cont'd))



<PAGE>

<TABLE>
<CAPTION>

                                                          Three months ended March 31,
                                                          ----------------------------
                                                2002                                          2001
                                                ----                                          ----
                                        Average price                                 Average price
                             mmcf          per mcf             Total         mmcf        per mcf           Total
                             ----          -------             -----         ----        -------           -----
<S>                         <C>             <C>               <C>           <C>           <C>          <C>
Gas sales                   163.5           $2.95             $ 482,000     125.6         $12.41       $ 1,559,000
Royalties deducted                                             (103,000)                                  (486,000)
                                                               ---------                                 ---------
Total                                                         $ 379,000                                 $1,073,000
                                                              =========                                 ==========
</TABLE>

          Oil and liquid sales increased by 164% in 2002 to $37,000 compared to
$14,002 in 2001. Since Canada Southern sold most of its producing oil properties
in 2000, future oil sales are expected to be minimal unless additional producing
properties are drilled or purchased. Crude oil unit sales in barrels (bbls)
(before deducting royalties) and the average price per barrel sold during the
periods indicated were as follows:

<TABLE>
<CAPTION>
                                                           Three months ended March 31,
                                                          ----------------------------
                                             2002                                            2001
                                             ----                                            ----
                                       Average price                                 Average price
                             bbls         per bbl          Total          bbls          per bbl             Total
                             ----         -------          -----          ----          -------             -----
<S>                         <C>           <C>               <C>            <C>          <C>               <C>
Crude oil sales             1,957         $25.11            $ 49,000       749          $20.15            $ 15,000
Royalties deducted                                           (12,000)                                       (1,000)
                                                           ----------                                       -------
Total                                                       $ 37,000                                      $ 14,000
                                                            ========                                      ========
</TABLE>

         Interest and other income increased 233% in 2002 from $21,000 in 2001
to $70,000 in the 2002 period because more funds were available for investment
as a result of the payments received from the Kotaneelee gas field.

         General and administrative costs decreased 8% in 2002 to $334,000 from
$365,000 in 2001 primarily due to a decrease in salaries and benefits.

         Legal expenses increased 3% during 2002 to $316,000 from $308,000
during 2001. These expenses are related primarily to the cost of the Kotaneelee
litigation. The costs during the current period related primarily to the appeal
of the September 2001 trial court decision.

         Lease operating costs increased 46% from $92,000 in 2001 to $134,000 in
the 2002 period because of the increase in production volumes.

         Depletion, depreciation and amortization expense increased 803% in 2002
to $632,000 from $70,000 in 2001. The increase was due to the production
associated with the Kotaneelee field.


         Site restoration costs increased by 3,950% to $81,000 in 2002 as
compared with $2,000 in 2001. The increase was due to the increase in
production volumes.

         A foreign exchange gain of $4,000 was recorded in 2002, compared to a
gain of $26,000 in 2001 on the Company's U.S. investments. The value of the
Canadian dollar was U.S.$.6282 at December 31, 2001 compared to U.S.$.6267 at
March 31, 2002.

         An income tax provision of $494,000 was recorded in 2002 compared to an
income tax provision of $58,000 in 2001. During the 2002 period, the Company
exhausted its tax loss carry forwards not previously recorded which resulted in
an effective tax rate of 55%. During the 2001 period, the $58,000 of income
taxes resulted in a 9% effective tax rate because of the utilization of tax loss
carry forwards not previously recorded.


Item 3.           Quantitative and Qualitative Disclosure About Market Risk

         The Company does not have any significant exposure to market risk as
the only market risk sensitive instruments are its investments in marketable
securities which are classified as cash and cash equivalents. Since the Company
expects to hold the investments to maturity, the maturity value should be
realized. At March 31, 2002, the carrying value of its investments in United
States dollar accounts was approximately $1.4 million, which was approximately
equal to fair value and face value of the investments.



<PAGE>



                         CANADA SOUTHERN PETROLEUM LTD.

                                    FORM 10-Q

                           PART II - OTHER INFORMATION

                                 March 31, 2002

Item 5.           Other Information

         On April 30, 2002, the Company reported that Mr. Myron Kanik, former
Deputy Minister of the Alberta Department of Energy, has been elected a director
of the Company to fill a vacancy created by the resignation of Ben A. Anderson
in January 2002. The Company also announced that its Annual General Meeting of
Shareholders would be held on Tuesday, June 11, 2002.


Item 6.           Exhibits and Reports on Form 8-K

(a)      Exhibits

                  None

          (b)     Reports on Form 8-K

                  On January 8, 2002, the Company filed a Current Report on Form
                  8-K to report the following: (a) Mr. Ben Anderson has resigned
                  as President and as a Director of the Company; (b) Mr. Randy
                  Denecky, the Company's Chief Financial Officer, has been
                  elected to serve as acting President; and (c) Mr. Richard
                  McGinity has been elected a director of the Company.




<PAGE>




                         CANADA SOUTHERN PETROLEUM LTD.

                                    FORM 10-Q

                                 MARCH 31, 2002



                                   SIGNATURES




         Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.



                         CANADA SOUTHERN PETROLEUM LTD.
                                   Registrant




Date:  May 10, 2002                By  /s/ Randy Denecky
                                       -----------------------------------------
                                        Randy Denecky
                                        President, Treasurer and Chief
                                        Financial and Accounting Officer