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                June 30, 2000
                               ----------------------------------------------

[   ]    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 14,284,970
shares outstanding as of August 10, 2000.


<PAGE>


                         CANADA SOUTHERN PETROLEUM LTD.

                                    FORM 10-Q

                                  JUNE 30, 2000

                                Table of Contents


                         PART I - FINANCIAL INFORMATION


ITEM 1    Financial Statements                                             Page
                                                                           ----
          Consolidated balance sheets at June 30, 2000 and
          December 31, 1999                                                   3

          Consolidated statements of operations and deficit for the
          three and six months ended June 30, 2000 and June 30, 1999          4

          Consolidated statements of cash flows for the six months ended
          June 30, 2000 and June 30, 1999                                     5

          Notes to consolidated financial statements                          6

ITEM 2    Management's Discussion and Analysis of Financial Condition and
          Results of Operations                                               9

ITEM 3    Quantitative and Qualitative Disclosure About Market Risk          17

                           PART II - OTHER INFORMATION

ITEM 4    Submission of Matters to a Vote of Security Holders                18

ITEM 5    Other Information                                                  18

ITEM 6    Exhibits and Reports on Form 8-K                                   19

          Signatures                                                         20


<PAGE>




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

Item 1.  Financial Statements

                           CONSOLIDATED BALANCE SHEETS
                         (Expressed in Canadian dollars)
<TABLE>
                                                                                June 30,             December 31,
                                                                                  2000                   1999
------------------------------------------------------------------------------------------------------------------------------------
                                Assets                                           (Unaudited)                (Note)
                                ------

Current assets:
<S>                                                                             <C>                   <C>
  Cash and cash equivalents                                                     $  2,185,918          $  3,045,530
  Marketable securities                                                              291,342               568,374
  Accounts receivable                                                                346,398               360,752
  Other assets                                                                       289,155               307,519
                                                                              --------------        --------------
Total current assets                                                               3,112,813             4,282,175
                                                                               -------------         -------------

Oil and gas properties and equipment
  (full cost method)                                                               9,363,434            10,207,294
Future tax asset                                                                   1,826,000             1,583,475
                                                                               -------------         -------------
Total assets                                                                     $14,302,247           $16,072,944
                                                                                 ===========           ===========

                 Liabilities and Shareholders' Equity

Current liabilities:
  Accounts payable                                                             $     520,464         $     634,600
  Accrued liabilities                                                                180,600                18,256
                                                                                    --------              --------
Total current liabilities                                                            701,064               652,856
                                                                                     -------               -------

Future site restoration costs                                                        145,934               174,696

Shareholders' Equity
  Limited Voting Shares, par value $1 per share
  Authorized - 100,000,000 shares
  Outstanding -14,284,970 shares                                                  14,284,970            14,284,970
  Contributed surplus                                                             26,502,342            26,502,342
                                                                                ------------          ------------
Total capital                                                                     40,787,312            40,787,312
  Deficit                                                                        (27,332,063)          (25,541,920)
                                                                                -------------         -------------
Total shareholders' equity                                                        13,455,249            15,245,392
                                                                                ------------          ------------
Total liabilities and shareholders' equity                                       $14,302,247           $16,072,944
                                                                                 ===========           ===========

Note: The balance sheet at December 31, 1999 has been derived from the audited
           consolidated financial statements at that date.

                             See accompanying notes.
</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>
                                                                Three months ended                          Six months ended
                                                                     June 30,                                   June 30,
------------------------------------------------------------------------------------------------------------------------------------
                                                       2000                   1999                 2000                 1999
                                                                            (Restated)                                (Restated)
Revenues:
<S>                                               <C>                      <C>                 <C>                  <C>
  Oil sales                                       $      2,042             $    33,581         $      8,154         $     63,675
  Gas sales                                             23,665                   7,784               44,215               28,358
  Proceeds from carried interests                      249,555                 100,639              549,554              127,695
  Interest and other income                             36,976                  61,740               81,539              145,098
                                                        ------               ---------           ----------            ---------
  Total revenues                                       312,238                 203,744              683,462              364,826
                                                       -------            ------------           ----------           ----------

Costs and expenses:
  General and administrative                           453,433                 365,498              843,627              725,095
  Legal                                                620,766                 561,749            1,109,488            1,119,213
  Lease operating costs                                 10,383                  37,353               21,331               68,116
  Depletion, depreciation
   and amoritization                                    51,500                  82,300              119,000              188,200
 Foreign exchange loss (gain)                          (31,843)                 55,319              (39,973)              92,245
  Abandonments and write downs                         634,582                       -              634,582                    -
  Rent                                                  13,480                  14,329               28,075               28,751
                                                   -----------           -------------        -------------        -------------
  Total costs and expenses                           1,752,301               1,116,548            2,716,130            2,221,620
                                                     ---------             -----------          -----------          -----------
  Loss before income taxes                          (1,440,063)               (912,804)          (2,032,668)          (1,856,794)
  Income tax recovery                                   53,028                  31,891              242,525               73,196
                                                    ----------           -------------         ------------        -------------
Net loss                                            (1,387,035)               (880,913)          (1,790,143)          (1,783,598)
  Deficit - beginning of period                    (25,945,028)            (23,443,181)         (25,541,920)         (22,540,496)
                                                --------------          --------------       --------------       --------------
  Deficit - end of period                         $(27,332,063)           $(24,324,094)        $(27,332,063)        $(24,324,094)
                                                 =============           =============        =============        =============

Average number of shares outstanding                14,284,970              14,235,990           14,284,970           14,236,740
                                                    ==========              ==========           ==========           ==========
Net loss per share (Basic & Diluted)                     $(.10)                 $(.06)               $(.13)               $(.13)
                                                        ======                 ======               ======               ======
</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)
<TABLE>
                                                                                     Six months ended
                                                                                         June 30,
------------------------------------------------------------------------------------------------------------------------------------
                                                                               2000                   1999
                                                                            (Unaudited)            (Restated)
Cash flows from operating activities:
<S>                                                                         <C>                    <C>
    Net loss                                                                $  (1,790,143)         $  (1,783,598)
    Adjustments to reconcile net loss
    to net cash used in operating activities
      Depreciation, depletion and amortization                                    119,000                188,200
      Future site restoration costs                                               (28,762)                     -
      Future tax recovery                                                        (242,525)               (73,196)
      Abandonments and write downs                                                634,582                      -
    Change in current assets and liabilities:
      Accounts and interest receivable                                             14,354                (26,715)
      Other assets                                                                 18,364                 70,736
      Accounts payable                                                           (114,136)                46,862
      Accrued liabilities                                                         162,344                (45,532)
                                                                             ------------         ---------------
  Net cash used in operations                                                  (1,226,922)            (1,623,243)
                                                                              ------------           ------------

Cash flows from investing activities:
  Additions to oil and gas properties                                            (245,722)              (484,186)
  Proceeds from sale of properties                                                336,000                      -
  Sale of marketable securities                                                   277,032                751,511
                                                                              -----------          -------------
Net cash provided by investing activities                                         367,310                267,325
                                                                              -----------          -------------

Cash flows from financing activities:
  Exercise of stock options                                                             -                 35,000
                                                                       ------------------         --------------

Decrease in cash and cash equivalents                                            (859,612)            (1,320,918)
Cash and cash equivalents at the
  beginning of period                                                           3,045,530              6,208,634
                                                                              -----------            -----------
Cash and cash equivalents at the end of period                                 $2,185,918             $4,887,716
                                                                               ==========             ==========

                             See accompanying notes.
</TABLE>

<PAGE>


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

                                  June 30, 2000
                         (Expressed in Canadian Dollars)


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. and have been prepared in
accordance  with  accounting   principles  generally  accepted  in  Canada.  The
financial statements conform in all material respects with accounting principles
generally  accepted in the United  States  ("U.S.  GAAP") for interim  financial
information and 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 and six month periods ended
June 30, 2000 are not necessarily indicative of the results that may be expected
for the year ending  December 31, 2000.  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, 1999.

Note 2.  Revenue Recognition

          In  December  1999,  the  Company  filed a motion to have the Court of
Queen's  Bench  direct the operator of the  Kotaneelee  gas field to make timely
payments of all current and future  amounts due from its share of the Kotaneelee
gas field revenues.  The motion was  subsequently  amended to include all of the
defendants.  On April 10, 2000, the trial court  dismissed the Company's  motion
pending  the  Court's  ultimate  determination  of the  issues  surrounding  the
Kotaneelee  field  carried-interest  account.  The Company intends to appeal the
decision to the Alberta Court of Appeal.

          In view of the Court's dismissal of the Company's motion,  the Company
will not accrue any revenues from the Kotaneelee  gas field until  collection of
the amounts due is reasonably assured.

         Since  March  2000,  the  Operator  of the  Kotaneelee  field  has been
reporting the amount of the Company's  share of net revenues being  deposited in
escrow.  The July 2000 report  provided  information  for production  during the
month of April 2000.  Based on the reported data, the Company believes the total
amount due the Company is  $2,702,470  of which  $896,038 has been  deposited in
escrow.



<PAGE>


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

Note 3.  Accounting Policy Changes

         In  1999,  under  new  recommendations  of the  Canadian  Institute  of
Chartered Accountants, the Company retroactively adopted the liability method of
accounting for income taxes.

         Under this method the Company  records  income  taxes to give effect to
temporary  differences  between  the  carrying  amount  and the tax basis of the
Company's  assets  and  liabilities.   Temporary   differences  arise  when  the
realization  of an asset or the  settlement  of a  liability  would give rise to
either an increase or decrease in the  Company's  income  taxes  payable for the
year or later period. Future income taxes are recorded at the enacted income tax
rates that are expected to apply when the future tax liability is settled or the
future tax asset is  realized.  Income tax  expense is the tax  payable  for the
period and the change during the period in future income tax and liabilities.

         Adoption  of the  liability  method  of  accounting  for  income  taxes
resulted in changes to previously  reported net income, net income per share and
the balance sheet accounts, as follows:
<TABLE>
                                                                                         June 30, 1999
                                                                                    Three months Six months
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                 <C>               <C>
Net loss previously reported                                                        $(912,804)        $(1,856,794)
Adjustment for the effect of the change in accounting method                            31,891              73,196
                                                                                  ------------      --------------
           Net loss as restated                                                      $(880,913)        $(1,783,598)
                                                                                     ==========        ============

Net loss per share previously reported                                                  $(.06)              $(.13)
Adjustment for the effect of the change in accounting method                                 -                   -
                                                                                         -----               -----
           Net loss per share as restated                                               $(.06)              $(.13)
                                                                                        ======              ======
</TABLE>
         If the tax  allocation  method of accounting  for income taxes had been
retained,  the Company would have reported a net loss of  $(1,440,063) or $(.10)
per  share  for  the  three  months  ended  June  30,  2000  and a net  loss  of
$(2,032,688) or $(.14) per share for the six months ended June 30, 2000.


<PAGE>


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


Note 4.  Oil and Gas Properties

         During 1999, the Company's  primary Alberta asset and revenue producing
property was its heavy crude oil production and related  facilities at Kitscoty.
The  Company  sold  its 10 %  working  interest  to the  operator  for  $336,000
effective  October 1, 1999. The transaction  was completed  during February 2000
and the  proceeds  of sale were  credited to oil and gas  properties  during the
quarter ended March 31, 2000.


Note 5.    General and Administrative Expenses - Compensation

     Effective  January 3, 2000,  Mr. Ben A.  Anderson was employed as Executive
Vice  President  for a two year  period at an annual  salary of $  120,000.  Mr.
Anderson also received  options to purchase  75,000 Limited Voting Shares of the
Company with 1/3 of the total  vesting  immediately,  1/3 vesting after one year
and 1/3  vesting  after two  years.  Mr.  Anderson  will also  receive an annual
vehicle  allowance  payment of $12,000.  Mr.  Anderson  succeeded  Mr. Ashton as
President  and CEO of the  Company  on  April 1,  2000.  Mr.  Anderson  was also
appointed a director of the Company on the same date.

Note 6.    Leases

     At June  30,  2000,  the  future  minimum  rental  payments  and  estimated
operating costs  applicable to the Company's  noncancelable  five year operating
(office) lease which was effective June 1, 2000 are as follows:

                 Fiscal Year                               Amount

                    2000                                    $19,766
                    2001                                     39,534
                    2002                                     40,943
                    2003                                     41,949
                    2004                                     41,949
                    2005                                     17,478
                                                           ---------
                   Total                                   $201,619
                                                           ========


<PAGE>



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 its share of
         revenue from the Kotaneelee gas field.

Liquidity and Capital Resources

         At June 30, 2000,  the Company had  approximately  $2.5 million of cash
and marketable securities available. Of this amount,  approximately $875,000 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.

         Cash flow used in operations  during the six months ended June 30, 2000
decreased  to  $1,227,000  compared to  $1,623,000  during the  comparable  1999
period.  The  difference  between  the  periods  was  caused  primarily  by  the
following:

                  Decrease in loss from operations            $ 360,000
                  Changes in accounts receivable and other      (11,000)
                  Net change in current liabilities              47,000
                                                              ---------
                  Difference in net cash used in operations   $ 396,000
                                                              =========



<PAGE>


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

          In  December  1999,  the  Company  filed a motion to have the Court of
Queen's  Bench  direct the operator of the  Kotaneelee  gas field to make timely
payments of all current and future  amounts due from its share of the Kotaneelee
gas field revenues.  The motion was  subsequently  amended to include all of the
defendants.  On April 10, 2000, the trial court  dismissed the Company's  motion
pending  the  Court's  ultimate  determination  of the  issues  surrounding  the
Kotaneelee  field  carried-interest  account.  The Company intends to appeal the
decision to the Alberta Court of Appeal.

          In view of the Court's dismissal of the Company's motion,  the Company
will not accrue any revenues from the Kotaneelee  gas field until  collection of
the amounts due is reasonably assured.

         Since  March  2000,  the  Operator  of the  Kotaneelee  field  has been
reporting the amount of the Company's  share of net revenues being  deposited in
escrow.  The July 2000 report  provided  information  for production  during the
month of April 2000.  Based on the reported data, the Company believes the total
amount due the Company is  $2,702,470  of which  $896,038 has been  deposited in
escrow.

         The Company's  Annual  Report on Form 10-K for the year ended  December
31, 1999 should be read for a detailed discussion of the Kotaneelee litigation.

         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.  The  Kotaneelee  gas field and  certain
properties  in the Fort Nelson,  British  Columbia area in which the Company has
carried  interests  have  reached pay out status.  Proceeds  from these  carried
interests  plus oil and gas  sales  from  working  interest  properties  are the
Company's major sources of working capital.


<PAGE>


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

         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 2000 will be  approximately  $600,000  ($246,000
spent to date). In addition,  substantial continuing expenses are expected to be
incurred in connection with the Kotaneelee Litigation. During the year 1999, the
Company  expended  approximately  $2.1 million in connection with the Kotaneelee
Litigation  which has been the  principal  cause of the  Company's  losses since
1991.

Results of Operations

         Three month period ended June 30, 2000 vs. June 30, 1999

         The net loss for the quarter ended June 30, 2000 was  $1,387,035  ($.10
per  share)  compared  to a net loss of  $880,913  ($.06 per share) for the 1999
period. A summary of revenue and expenses during the periods is as follows:
<TABLE>
                                           2000                         1999                      Net Change
                                           ----                         ----                      ----------
<S>                                     <C>                          <C>                             <C>
Revenues                                $    312,238                 $    203,744                    $ 108,494
Costs and expenses                        (1,752,301)                  (1,116,548)                    (635,753)
Income tax recovery                           53,028                       31,891                       21,137
                                    ----------------               --------------               --------------
Net loss                               $  (1,387,035)                $   (880,913)                $   (506,122)
                                       ==============                =============                =============
</TABLE>
         Oil sales decreased by 94% in 2000.  Royalty income  increased from nil
in 1999 to  $2,000  in 2000.  The  Company  sold the  majority  of its crude oil
producing properties in 1998 and also sold its remaining heavy oil production in
February  2000.  Since  the  Company  has  disposed  of  most  of its  producing
properties,  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:


<PAGE>


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

<TABLE>
                                                      Three month period ended June 30,
                                             2000                                            1999
                                     Average price                                  Average price
                          bbls          per bbl             Total         bbls         per bbl             Total
                          ----          -------             -----         ----         -------             -----
<S>                       <C>           <C>                 <C>          <C>            <C>                 <C>
Oil sales                                                       -         2,354          $15.97              $38,000
Royalty income                                              2,000                                                  -
Royalties paid                                                  -                                             (4,000)
                                                     ------------                                           ---------
Total                                                     $ 2,000                                            $34,000
                                                          =======                                            =======
</TABLE>

         Gas  sales  increased  204% in 2000.  There was a 40%  increase  in the
number of units sold and a 151% increase in the average price for gas. Gas sales
include  royalty  income which also  increased 67%. 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:
<TABLE>
                                                        Three month period ended June 30,
                                              2000                                             1999
                                      Average price                                    Average price
                          mmcf           per mcf             Total          mmcf          per mcf             Total
                          ----           -------             -----          ----          -------             -----
<S>                        <C>            <C>                <C>            <C>            <C>                <C>
Gas sales                  1.4            $3.16              $  5,000       1.0            $1.26              $  2,000
Royalty income                                                 20,000                                           12,000
Royalties paid                                                 (1,000)                                          (6,000)
                                                            ----------                                         --------
Total                                                         $24,000                                           $8,000
                                                              =======                                           ======
</TABLE>

         Proceeds from carried interests  increased 148% to $250,000 during 2000
compared  to  $101,000  in  1999  because  gas  prices  increased  50%.  Capital
expenditures  decreased  98% in 2000 to $1,000 from $62,000  during  1999.  Unit
sales decreased 8% and partially  offset the above  increases in revenues.  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:

<TABLE>
                           Three months ended June 30,
                                           2000                                            1999
                                      Average price                                   Average price
                          mmcf           per mcf          Total           mmcf           per mcf           Total
                          ----           -------          -----           ----           -------           -----

<S>                        <C>            <C>             <C>              <C>            <C>               <C>
Gas sales                  128            $3.45           $ 442,000        139            $2.30             $320,000
Oil sales                                                     5,000                                           20,000
Royalty paid                                               (102,000)                                         (62,000)
Operating costs                                             (94,000)                                        (116,000)
Capital costs                                                (1,000)                                         (61,000)
                                                        ------------                                        ---------
Total                                                     $ 250,000                                       $  101,000
                                                          =========                                       ==========
</TABLE>

<PAGE>


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

         Interest  and  other  income  was 40%  lower in 2000.  Interest  income
decreased  38% from  $60,000 in 1999 to $37,000 in the 2000 period  because less
funds were available for  investment.  In addition,  the 2000 period includes no
proceeds from the sale of seismic data compared to $2,000 in 1999.

         General and administrative costs increased 24% in 2000 to $453,000 from
$365,000 in 1999.  The Company hired a new executive  vice  president  effective
January  1, 2000  which  increased  salary  expense  approximately  $33,000.  In
addition,  the 2000 period  includes a $38,000  severance  payment to the former
Secretary-Treasurer.  The cost of printing and mailing costs in connection  with
the annual meeting also increased $38,000 during the 2000 period.

         Legal  expenses  increased  11% during 2000 to $621,000  from  $562,000
during 1999. These expenses are related  primarily to the cost of the Kotaneelee
litigation.  During the 2000 period,  the Company prepared and filed its written
closing arguments.

         Lease  operating costs decreased 72% from $37,000 in 1999 to $10,000 in
the 2000 period. The Company sold its remaining heavy oil production  properties
during February 2000.

         Depletion,  depreciation and amortization expense decreased 37% in 2000
to $52,000 from $82,000 in 1999.  The  depletion  rate in 2000  decreased by 32%
from the 1999 rate. Also, the capital asset base in 2000 decreased 6% from 1999.

          A foreign exchange gain of $32,000 was recorded in 2000, compared to a
loss of $55,000 in 1999 on the Company's U.S. investments. The value of the
Canadian  dollar was U.S.  $.6899 at March 31, 2000 compared to U.S. $.6759
at June 30, 2000.

         Abandonments  and write downs  increased  to  $635,000  during the 2000
period.  The  Company's  investment  in the Texas  project was written down to a
nominal  value  during the second  quarter  because the project was deemed to be
uneconomic.

     Income tax recovery increased by 66% to $53,000 in 2000 compared to $32,000
in 1999.  The  increased  recovery  reflects  an  increase  in the excess of tax
deductible resource expenditures relative to the carrying value of the Company's
oil and gas properties.


<PAGE>


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


Six month period ended June 30, 2000 vs. June 30, 1999

         The net  loss  for  the six  month  period  ended  June  30,  2000  was
$1,790,143  ($.13 per  share)  compared  to a net loss of  $1,783,598  ($.13 per
share) for the 1999 period. A summary of revenue and expenses during the periods
is as follows:
<TABLE>
                                           2000                         1999                      Net Change
                                           ----                         ----                      ----------
<S>                                     <C>                          <C>                             <C>
Revenues                                $    683,462                 $    364,826                    $ 318,636
Costs and expenses                        (2,716,130)                  (2,221,620)                    (494,510)
Income tax recovery                          242,525                       73,196                      169,329
                                      --------------             ----------------                  -----------
Net loss                               $  (1,790,143)              $   (1,783,598)                $     (6,545)
                                       ==============              ===============                =============
</TABLE>
         Oil sales  decreased  by 87% due  primarily  to a 97%  decrease  in the
number of units  sold  which was  partially  offset  by a 156%  increase  in the
average  prices of crude oil sold.  There was also a  corresponding  decrease in
royalties paid by the Company. In 2000 royalty income increased from nil in 1999
to $2,000.  The Company sold the majority of its crude oil producing  properties
in 1998 and also sold its remaining heavy oil production in February 2000. Since
the Company has disposed of most of its producing  properties,  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>
                                                     Six month period ended June 30,
                                             2000                                            1999
                                     Average price                                  Average price
                          bbls          per bbl             Total         Bbls         per bbl             Total
                          ----          -------             -----         ----         -------             -----
<S>                        <C>          <C>                   <C>        <C>            <C>                 <C>
Oil sales                  178          $34.34                $6,000     5,093          $13.44              $68,000
Royalty income                                                 2,000
Royalties paid                                                     -                                         (4,000)
                                                        ------------                                       ---------
Total                                                        $ 8,000                                        $64,000
                                                             =======                                        =======
</TABLE>




<PAGE>


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

         Gas  sales  increased  56% in 2000.  There  was a 13%  increase  in the
average price for gas. Gas sales include  royalty income which  increased 30% in
2000.  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:

<TABLE>
                                                        Six month period ended June 30,
                                              2000                                             1999
                                      Average price                                    Average price
                          mmcf           per mcf             Total          mmcf          per mcf             Total
                          ----           -------             -----          ----          -------             -----
<S>                        <C>            <C>                <C>            <C>            <C>                 <C>
Gas sales                  5.0            $2.32              $ 11,000       5.0            $2.06               $ 9,000
Royalty income                                                 35,000                                           27,000
Royalties paid                                                 (2,000)                                          (8,000)
                                                            ----------                                       ----------
Total                                                         $44,000                                          $28,000
                                                              =======                                          =======
</TABLE>

         Proceeds from carried interests  increased 330% to $550,000 during 2000
compared  to  $128,000  in  1999  because  gas  prices  increased  38%.  Capital
expenditures  decreased 94% in 2000 to $14,000 from $222,000  during 1999.  Unit
sales  decreased 46% and partially  offset the increase in revenues  above.  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:
<TABLE>
                                                        Six month period ended June 30,
                                           2000                                            1999
                                      Average price                                   Average price
                          mmcf           per mcf          Total           mmcf           per mcf           Total
                          ----           -------          -----           ----           -------           -----

<S>                        <C>            <C>             <C>              <C>            <C>               <C>
Gas sales                 281            $3.51           $ 979,000        285            $2.55             $708,000
Oil Sales                                                     5,000                                           20,000
Royalty paid                                               (218,000)                                        (155,000)
Operating costs                                            (201,000)                                        (223,000)
Capital costs                                               (15,000                                         (222,000)
                                                            -------                                         ---------
Total                                                     $ 550,000                                         $128,000
                                                          =========                                         ========
</TABLE>


<PAGE>


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

         Interest  and  other  income  was 44%  lower in 2000.  Interest  income
decreased 46% from  $132,000 in 1999 to $76,000 in the 2000 period  because less
funds were  available  for  investment.  In addition,  the 2000 period  includes
proceeds  from the sale of  seismic  data in the  amount of $6,000  compared  to
$6,000 in 1999.

         General and administrative costs increased 16% in 2000 to $844,000 from
$725,000 in 1999.  The Company hired a new executive  vice  president  effective
January  1, 2000  which  increased  salary  expense  approximately  $66,000.  In
addition  the 2000  period  includes a $38,000  severance  payment to the former
Secretary-Treasurer.  The costs of printing and mailing costs in connection with
the annual meeting also increased $45,000 during the 2000 period.

         Legal expenses  decreased 1% during 2000 to $1,109,000  from $1,119,000
during 1999. These expenses are related  primarily to the cost of the Kotaneelee
litigation.  During the 2000 period, the Company presented its rebuttal evidence
and completed and filed its written closing argument.

         Lease  operating costs decreased 69% from $68,000 in 1999 to $21,000 in
the 2000 period. The Company sold its remaining heavy oil production  properties
during February 2000.

         Depletion,  depreciation and amortization expense decreased 37% in 2000
to $119,000 from $188,000 in 1999.  The depletion  rate in 2000 decreased by 32%
from the 1999 rate. Also, the capital asset base in 2000 decreased 6% from 1999.

        A foreign  exchange gain of $40,000 was recorded in 2000,  compared to a
loss of  $92,000 in 1999 on the  Company's  U.S.  investments.  The value of the
Canadian  dollar was U.S. $.6924 at December 31, 1999 compared to U.S. $.6759 at
June 30, 2000.

    Abandonments  and write downs  increased  to  $635,000  during the 2000
period.  The  Company's  investment  in the Texas  project was written down to a
nominal  value  during the second  quarter  because the project was deemed to be
uneconomic.

         Income tax recovery  increased by 231% to $ 243,000 in 2000 compared to
$73,000 in 1999. The largest component of the increased income tax recovery is
 due to adjustments in finalizing the 1999 income tax return.



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 June 30, 2000, the carrying value of such investments (including
those classified as cash and cash  equivalents) was  approximately  $2.5 million
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 June 30, 2000, the investments  held in the
United States totaled $874,000.



<PAGE>



                         CANADA SOUTHERN PETROLEUM LTD.

                                    FORM 10-Q

                           PART II - OTHER INFORMATION

                                  June 30, 2000

Item 4.  Submission of Matters to a Vote of Security Holders

      (a)      On June 21, 2000, the Company held its Annual General Meeting of
               Shareholders.

      (b)      M. Anthony Ashton was reelected a director of the Company. The
               vote was as follows:

               For                         379,226
               Withheld                     23,910

      (c)      The firm of Ernst & Young  LLP was  appointed  as the
               Company's  independent  auditors  for the year ending
               December 31, 2000. The vote was as follows:

               For                         387,909
               Against                       5,571
               Abstain                       9,656

Item 5.  Other Information

     Effective July 31, 2000, Mr. Kelly B. Johnson has resigned as
Secretary, Treasurer and Chief Financial and Accounting Officer of the Company.

     Mr. David Blain, age 55, a Canadian Chartered Accountant,  has been elected
Secretary,  Treasurer and Chief Financial and Accounting  Officer of the Company
effective  August 1, 2000. Mr. Blain has been involved with  accounting,  income
taxes,  corporate planning and finance matters in Western Canada for the past 30
years.  Mr. Blain is an  independent  consultant to oil and gas companies in the
Calgary  area and will  serve the  Company  on a  part-time  basis.  He has been
associated  with Clarkson Gordon & Co. and Hudson's Bay Oil & Gas Ltd. He served
with  Star Oil & Gas Ltd.,  a Calgary  based  oil and gas  company,  in  various
capacities  from 1979 to 1997 and most recently was Vice  President,  Finance of
that company.


<PAGE>


Item 6.  Exhibits and Reports on Form 8-K

          (a)     Exhibits

                  None.

          (b)     Reports on Form 8-K

                  On April 24, 2000 the Company  filed a Current  Report on Form
         8-K to  report  that on April  10,  2000 the  Court of  Queen's  Beach,
         Calgary, Canada dismissed the Company's motion to direct the defendants
         in the Kotaneelee gas field  litigation to make timely  payments of all
         current and future amounts due from its share of field revenues.



<PAGE>



                         CANADA SOUTHERN PETROLEUM LTD.

                                    FORM 10-Q

                                  June 30, 2000



                                   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:  August 10, 2000                   By  /s/  David Blain
                                                ----------------
                                                  David Blain
                                                  Treasurer and Chief Financial
                                                  and Accounting Officer