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                  September 30, 1999
                               -------------------------------------------------

[   ]    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.)

    Suite 1410, One Palliser Square,
         125 Ninth Avenue, S.E.,
        Calgary, Alberta, Canada                                  T2G 0P6
 ................................................................................
(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 14,283,740
shares outstanding as of November 3, 1999.



<PAGE>




                         CANADA SOUTHERN PETROLEUM LTD.

                         PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

                           CONSOLIDATED BALANCE SHEETS
                         (Expressed in Canadian dollars)
                                   (unaudited)

<TABLE>
<CAPTION>
                                                                                 September 30,          December 31,
                                                                                     1999                   1998
                                                                                 -------------          ------------
                                 Assets

Current assets:
<S>                                                                               <C>                   <C>
  Cash and cash equivalents                                                       $ 4,253,357           $ 6,208,634
  Marketable securities                                                                     -               751,511
  Accounts and interest receivable                                                    349,559               266,116
  Other assets                                                                        348,423               319,697
                                                                                  -----------           -----------
Total current assets                                                                4,951,339             7,545,958
                                                                                  -----------           -----------

Oil and gas properties and equipment
  (full cost method)                                                               10,466,739            10,000,010
                                                                                  -----------           -----------
Total assets                                                                      $15,418,078           $17,545,968
                                                                                  ===========           ===========

                  Liabilities and Shareholders' Equity

Current liabilities:
  Accounts payable                                                                $   358,640           $   375,554
  Accrued liabilities                                                                 177,043               294,491
                                                                                  -----------           -----------
Total current liabilities                                                             535,683               670,045
                                                                                  -----------           -----------

Future site restoration costs                                                         200,864               236,045
                                                                                  -----------           -----------

Shareholders' Equity
  Limited Voting Shares, par value $1 per share
  Authorized - 100,000,000 shares
  Outstanding -14,283,740 (1999), 14,234,740 (1998)                                14,283,740            14,234,740
  Contributed surplus                                                              26,491,583            26,254,139
                                                                                  -----------           -----------
Total capital                                                                      40,775,323            40,488,879
  Deficit                                                                         (26,093,792)          (23,849,001)
                                                                                  -----------           -----------
Total shareholders' equity                                                         14,681,531            16,639,878
                                                                                  -----------           -----------
Total liabilities and shareholders' equity                                        $15,418,078           $17,545,968
                                                                                  ===========           ===========
</TABLE>



<PAGE>


                         CANADA SOUTHERN PETROLEUM LTD.

                         PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

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

<TABLE>
<CAPTION>
                                                                Three months ended                         Nine months ended
                                                                   September 30,                             September 30,

                                                            1999                 1998                 1998                 1998
                                                        ------------         ------------         ------------         ------------
Revenues:
<S>                                                     <C>                  <C>                  <C>                  <C>
  Oil sales                                             $     39,461         $    298,819         $    103,136         $    724,196
  Gas sales                                                    1,981              452,472               30,339              729,821
  Proceeds under carried interest agreements                 178,471               95,891              306,166              205,888
  Interest and other income                                   54,123               36,076              199,221              168,175
                                                        ------------         ------------         ------------         ------------
  Total revenues                                             274,036              883,258              638,862            1,828,080
                                                        ------------         ------------         ------------         ------------
Costs and expenses:
  General and administrative                                 204,178              240,557              929,273            1,004,442
  Legal                                                      354,039              602,997            1,473,252            1,659,148
  Lease operating costs                                       50,024              359,878              118,140              942,712
  Depletion, depreciation, and amortization                   91,500              300,900              279,700              702,700
  Foreign exchange loss (gain)                               (50,511)            (116,918)              41,734             (186,695)
  Provision for future site restoration costs                      -               11,000                    -               26,500
  Rent                                                        12,803               19,177               41,554               60,235
                                                        ------------         ------------         ------------         ------------
  Total costs and expenses                                   662,033            1,417,591            2,883,653            4,209,042
                                                        ------------         ------------         ------------         ------------
  Loss before income taxes                                  (387,997)            (534,333)          (2,244,791)          (2,380,962)
  Income taxes                                                     -                    -                    -                    -
                                                        ------------         ------------         ------------         ------------
Net loss                                                    (387,997)            (534,333)          (2,244,791)          (2,380,962)

  Deficit - beginning of period                          (25,705,795)         (22,989,093)         (23,849,001)         (21,142,464)
                                                        ------------         ------------         ------------         ------------
  Deficit - end of period                               $(26,093,792)        $(23,523,426)        $(26,093,792)        $(23,523,426)
                                                        =============        =============        =============        =============

Average number of shares outstanding                      14,255,490           14,234,740           14,243,040           14,234,740
                                                          ==========           ==========           ==========           ==========

Net loss per share (basic & diluted)                        $(.03)               $(.04)               $(.16)               $(.17)
                                                            ======               ======               ======               ======
</TABLE>


<PAGE>


                         CANADA SOUTHERN PETROLEUM LTD.

                         PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                         (Expressed in Canadian dollars)
                                   (unaudited)

<TABLE>
<CAPTION>
                                                                                      Nine months ended
                                                                                         September 30,
                                                                                  1999                   1998
                                                                              -----------            -----------
Cash flows from operating activities:
<S>                                                                           <C>                    <C>
    Net loss                                                                  $(2,244,791)           $(2,380,962)
    Adjustments to reconcile net loss
    to net cash used in operating activity:
      Depreciation, depletion and amortization                                    279,700                702,700
      Future site restoration costs                                               (35,181)                24,812
    Change in current assets and liabilities:
      Accounts and interest receivable                                            (83,443)               438,423
      Other assets                                                                (28,726)              (116,969)
      Accounts payable                                                            (16,915)              (183,259)
      Accrued liabilities                                                        (117,448)               102,724
                                                                              -----------            -----------
  Net cash used in operations                                                  (2,246,804)            (1,412,531)
                                                                              -----------            -----------

Cash flows from investing activities:
  Additions to oil and gas properties (net)                                      (746,428)            (1,866,888)
  Sale (purchase) of marketable securities                                        751,511              3,373,334
                                                                              -----------            -----------
Net cash provided by investing activities                                           5,083              1,506,446
                                                                              -----------            -----------

Cash flows from financing activities:
  Exercise of stock options                                                       286,444                      -
                                                                              -----------            -----------
  Net cash from financing activities                                              286,444                      -
                                                                              -----------            -----------

Increase (decrease) in cash and cash equivalents                               (1,955,277)                93,915
Cash and cash equivalents at the
  beginning of period                                                           6,208,634              2,129,156
                                                                              -----------            -----------
Cash and cash equivalents at the
  end of period                                                               $ 4,253,357            $ 2,223,071
                                                                              ===========            ===========
</TABLE>



<PAGE>



                         CANADA SOUTHERN PETROLEUM LTD.

                         PART I - FINANCIAL INFORMATION

                               September 30, 1999
                         (Expressed in Canadian Dollars)

Item 1.  Financial Statements - Notes

         The  information  for the three and nine month periods ended  September
30, 1999 and 1998 is unaudited  but includes all  adjustments  which the Company
considers  necessary for a fair statement of the results for those periods.  All
adjustments are of a normal recurring nature.

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:

         o   uncertainties as to the costs, length and outcome of the Kotaneelee
             litigation;

         o   uncertainty as to when or if the Company  will  receive any revenue
             from the Kotaneelee gas field.

Liquidity and Capital Resources

         At September 30, 1999,  the Company had  approximately  $4.3 million of
cash and securities  available.  Of this amount,  approximately $1.2 million are
held in U.S. marketable  securities which are subject to exchange  fluctuations.
These funds are expected to be used for general  corporate  purposes,  including
exploration and to continue the Kotaneelee field litigation.



<PAGE>


                         PART I - FINANCIAL INFORMATION

                         CANADA SOUTHERN PETROLEUM LTD.

                               September 30, 1999
                         (Expressed in Canadian Dollars)

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

         Cash flow used in operations  during the six months ended September 30,
1999 increased to $2,247,000  compared to $1,413,000  during the comparable 1998
period.  The  difference  between  the  periods  was  caused  primarily  by  the
following:

                  Increase in loss from operations            $(347,000)
                  Changes in accounts receivable and other     (433,000)
                  Net change in current liabilities             (54,000)
                                                              ----------
                  Increase in net cash used in operations     $(834,000)
                                                              ==========

         A  significant  proportion  of the  Company's  property  interests  are
covered by carried interest agreements,  which provide that expenditures made by
the operator are recouped solely out of revenues from production.  Major capital
expenditures  made by the operators  have an impact on the  Company's  cash flow
from  operations as no revenues are reported or received until the capital costs
have been  recovered by the  operator.  Certain  properties  in the Fort Nelson,
British  Columbia area in which the Company has carried  interests  have reached
payout status. Proceeds from these carried interests plus oil and gas sales from
working interest  properties and interest income are the Company's major sources
of working capital.

         Anderson Oil & Gas, Inc.  ("Anderson"),  the operator of the Kotaneelee
gas  field,  has  reported  to  the  Company  that  development  costs  totaling
approximately $6,921,000, of which the Company's share is $2,076,000,  remain to
be recovered at July 31, 1999. The amount of remaining  recoverable costs is one
of the issues being contested in the Kotaneelee litigation.  The Company claims,
and the defendants  deny, that the defendants have made improper  charges to the
carried  interest account and one defendant (Amoco Canada Oil and Gas) maintains
that the carried interest account should be charged  additional  amounts for gas
processing fees.  Amoco claims that the remaining costs to be recovered at March
31, 1999 were $77,445,000.

         Anderson has notified the Company that it will not make any payments to
the carried  interest  owners,  including  the  Company,  until the issue of the
amount of recoverable costs under the carried interest account has been resolved
by the Court.  Anderson has stated that it will deposit the  Company's  share of
net production proceeds in an interest bearing account with an escrow agent. The
Company  believes that such action by Anderson  would be unlawful and intends to
vigorously challenge Anderson's position in Court.


<PAGE>


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

         Previous  projections  by  the  operator  indicated  that  the  carried
interest  account might reach payout  status prior to the end of 1999.  However,
there can be no  assurances  that  payout  status  will be reached  within  that
timeframe,  inasmuch as there are  uncertainties  as to production  levels,  gas
pricing,  field  operating  expenses and additional  capital  expenditures.  The
timing of actual  payout  will be  materially  impacted  by the  outcome  of the
Kotaneelee litigation on this issue.

         The  Company's  Annual  Report on Form 10-K for the year ended December
31, 1998 should be read for a detailed discussion of the Kotaneelee litigation.

         The Company is currently evaluating and expects to continue to evaluate
oil and gas properties and may make  investments  in such  properties  utilizing
cash on hand. The Company  anticipates  that its capital  expenditures  for land
acquisitions  and  drilling  for  1999  will  be  approximately  $1,000,000.  In
addition,  substantial  continuing  expenses  are  expected  to be  incurred  in
connection  with  the  Kotaneelee  Litigation.  The  expense  of the  Kotaneelee
Litigation has been the principal cause of the Company's losses since 1991.

Results of Operations

         Three month period ended September 30, 1999 vs. September 30, 1998

         The net loss for the  quarter  ended  September  30,  1999 was $388,000
($.03 per share)  compared to a net loss of  $534,000  ($(.04 per share) for the
1998 period. A summary of revenue and expenses during the periods is as follows:

                             1999                 1998               Net Change
                             ----                 ----               ----------
Revenues                  $ 274,036           $   883,258            $(609,222)
Costs and expenses         (662,033)           (1,417,591)             755,558
                          ----------          ------------           ---------
Net loss                  $(387,997)          $  (534,333)           $ 146,336
                          ==========          ============           =========

         Oil sales  decreased 87% in the 1999 period to $39,000 from $299,000 in
the 1998 period.  The Company sold the majority of its oil producing  properties
effective July 1 and September 1, 1998. Oil unit sales in barrels  ("bbls") were
2,301 bbls in the 1999 period compared to 21,304 bbls in the 1998 period.



<PAGE>


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

         Gas sales  decreased  99% in the 1999 period to $2,000 from $452,000 in
the 1998  period.  The Company  sold the  majority of its working  interest  gas
properties  effective  July 1, 1998.  The volumes in million cubic feet ("mmcf")
were 9 mmcf in the 1999 period compared to 224 mmcf in the 1998 period.

         Proceeds under carried  interest  agreements  increased 86% to $178,000
during 1999 from $96,000 in 1998.  During 1998, there were capital  expenditures
made by the operators of certain of the carried interest  properties (other than
Kotaneelee);  therefore, revenues from these properties, which had been lower in
the first quarter of 1999, began to increase in the second quarter of 1999.

         Interest  and other  income  was 50%  higher in 1999.  Interest  income
increased  66% from  $31,000 in 1998 to  $52,000  in the 1999  period due to the
increase in funds  available for  investment  during 1999 because of the sale of
oil and gas properties in 1998. In addition,  the 1999 period includes  proceeds
from the sale of  seismic  data in the  amount of $2,000  compared  to $5,000 in
1998.

         General  and  administrative  costs  decreased  15% in 1999 to $204,000
from $241,000 in 1998. The primary  reason for the decrease is lower  consulting
costs and business taxes.

         Legal  expenses  decreased  41% during 1999 to $354,000  from  $603,000
during 1998. These expenses are related  primarily to the cost of the Kotaneelee
litigation.  During 1999, the Company continued the cross-examination of defense
witnesses,  whereas, during the 1998 period, the Company had been in the process
of completing the presentation of its evidence.

         Lease  operating  costs  decreased 86% from $360,000 in 1998 to $50,000
in the 1999 period.  The Company sold the majority of its oil and gas  producing
properties during the second half of 1998.

         Depletion,  depreciation and amortization expense decreased 70% in 1999
to $92,000 from  $301,000 in 1998.  The Company sold the majority of its oil and
gas producing properties during the second half of 1998.



<PAGE>


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

         A foreign exchange gain of $51,000 was recorded in 1999,  compared to a
gain of $117,000 in 1998 on the  Company's  U.S.  investments.  The value of the
Canadian  dollar was U.S.  $.6789 at June 30, 1999  compared  to U.S.  $.6812 at
September 30, 1999.

         Income taxes. No provision for income taxes is required for the current
period.

         Nine month period ended September 30, 1999 vs. September 30, 1998

         The net loss for the nine month  period  ended  September  30, 1999 was
$2,245,000  ($.16 per  share)  compared  to a net loss of  $2,381,000  ($.17 per
share) for the 1998 period. A summary of revenue and expenses during the periods
is as follows:

                              1999                1998             Net Change
                              ----                ----             ----------
Revenues                  $   638,862         $ 1,828,080          $(1,189,218)
Costs and expenses         (2,883,653)         (4,209,042)           1,325,389
                          ------------        ------------         -----------
Net loss                  $(2,244,791)        $(2,380,962)         $   136,171
                          ============        ============         ===========

         Oil sales  decreased  86% in 1999 to  $103,000  compared to $724,000 in
1998.  The Company sold the majority of its oil producing  properties  effective
July 1 and September 1, 1998. Oil unit sales in barrels ("bbls") were 7,327 bbls
in 1999 compared to 60,723 bbls in 1998.

         Gas sales  decreased  96% in 1999 to $30,000  compared  to  $730,000 in
1998.  The Company  sold the  majority of its working  interest  gas  properties
effective  July 1, 1998. The volumes in million cubic feet ("mmcf") were 14 mmcf
in 1999 compared to 332 mmcf in 1998.

         Proceeds under carried  interest  agreements  increased 49% to $306,000
during  1999  compared  to $206,000 in 1998.  During  1998,  there were  capital
expenditures made by the operators of certain of the carried interest properties
(other than Kotaneelee);  therefore,  revenues from these properties,  which had
been lower in the first quarter of 1999, began to increase in the second quarter
of 1999.



<PAGE>


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

         Interest  and other  income  was 18%  higher in 1999.  Interest  income
increased  29% from  $142,000  in 1998 to $183,000 in the 1999 period due to the
increase in funds  available for  investment  during 1999 because of the sale of
oil and gas properties in 1998. In addition,  the 1999 period includes  proceeds
from the sale of  seismic  data in the amount of $8,000  compared  to $26,000 in
1998.

         General and  administrative  expenses  decreased 7% to $929,000 in 1999
from $1,004,000 in 1998.

         Legal  expenses  decreased  11% during 1999 to  $1,473,000  compared to
$1,659,000  during 1998. These expenses are related primarily to the cost of the
Kotaneelee  litigation.  During 1998, the Company  completed the presentation of
its case against the working  interest  partners.  The 1998 costs represent both
legal fees and the cost of various  Company  experts who testified or were being
prepared for testimony. During 1999, the Company continued its cross-examination
of defense witnesses.

         Lease  operating  costs decreased 87% from $943,000 in 1998 to $118,000
in the 1999 period.  The Company sold the majority of its oil and gas  producing
properties during the second half of 1998.

         Depletion,  depreciation and amortization expense decreased 60% in 1999
to $280,000 from $703,000 in 1998.  The Company sold the majority of its oil and
gas producing properties during the second half of 1998.

         A foreign exchange loss of $42,000 was recorded in 1999,  compared with
a gain of $187,000 on the Company's  U.S.  investments in 1998. The value of the
Canadian dollar was U.S. $.6812 at September 30, 1999 compared to U.S. $.6535 at
December 31, 1998.

         Income taxes. No provision for income taxes is required for the current
period.



<PAGE>


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.  At September 30, 1999, the carrying value of such  investments  was
approximately  $3,554,000 which was  approximately  equal to fair value and face
value of the  investments.  Since the Company expects to hold the investments to
maturity,  the maturity  value should be realized.  In addition,  the  Company's
investments in marketable  securities  included  investments  held in the United
States which are subject to foreign  exchange  fluctuations.  At  September  30,
1999, the investments in the United States totaled $1,446,000.



<PAGE>



                         CANADA SOUTHERN PETROLEUM LTD.

                           PART II - OTHER INFORMATION

                               September 30, 1999

Item 6.  Exhibits and Reports on Form 8-K

          (a)     Exhibits

                  None.

          (b)     Reports on Form 8-K

                  On September 22, 1999,  the Company filed a Current  Report on
Form  8-K to  report  the  amount  of the  remaining  recoverable  costs  at the
Kotaneelee gas field to be recovered at May 31, 1999 as reported by the operator
of the field.


<PAGE>


                                   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:  November 10, 1999                    By /s/ Kelly B. Johnson
                                               Treasurer and Chief Financial and
                                               Accounting Officer